MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Benchmarks
have included Turkey for both our existing funds from inception. The next phase of our
expansion is in two directions. The first, having established the track record in the two
existing innovative and differentiated products, is to actively market our existing funds to
institutional clients regionally and internationally. In parallel with this, we are seeking to
grow our product range in several ways. The first is to launch one or two more valueadded,
differentiated and limited capacity offerings (similar to the existing funds) aimed
at a select group of investors, which are likely to cover a wider geographic scope and/or
other asset classes. The second is to offer better priced and better managed
conventional products where we see the market is still lacking depth and quality in this
type of offering, to be aimed at the retail client in collaboration with partners who can
access and service this type of client base. Finally, we are in the process of designing
and launching a discretionary managed portfolio/managed account service aimed at
HNWI/UHNWI and institutions. Expansion plans could also include strategic initiatives
which would allow for any or all of the following; expanding to a wider geographic region
for attractive investments, obtaining seeding for new funds and securing a steady flow of
future AUMs.
Q/ What is your investment outlook ?
A/ We are more positive on the outlook for the Middle East and North Africa than we
have been for at least two years. Accommodative monetary policy, oil prices at good
levels, fiscal stimulus and, finally, some evidence of political stabilisation in key markets
is seeing regional growth regain speed. This comes at a time when the rest of the world
seems to be slowing down. We believe MENA is set for another period of
outperformance relative to emerging markets as the recent ‘risk-on’ trade in global
markets loses steam. We believe that concerns over growth in the US and China will
impact corporate earnings and weigh on risk assets in Q4. MENA markets typically
outperform in such periods, notwithstanding the importance of materials to MENA
earnings. Higher dividend yields will provide further support to MENA markets.
It is important to note though that this is unlikely to be a ‘wave’ similar to what we have
witnessed in the past (2005, 2007) where all fund and managers do well with the rising
tide. Being selective will be the key to performance. As evidence of this, we highlight the
fact that while the S&P Arabian Capped Index is up 3% YTD to end of October 2012, the
Value Fund is up over 22% for the same period.
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