Innovation a key to strong performance by Kuwait's Markaz funds

In the six months to June 2005, Mumtaz Fund (Kuwait's first established equity fund), Midaf Fund (Kuwait's largest equity fund), Forsa Fund, which issues and sells derivatives for the first time on the Middle-East , and other Markaz funds including the money market fund, Idikhar Savings Fund, all performed strongly.

Markaz Executive Vice President (Local & GCC Investments), Mr Sami Alhasawi, said "Markaz was the first company to offer a number of different types of funds to Kuwaiti and Gulf Cooperation Council (GCC) investors and this innovative approach supported by rigorous investment analysis and a commitment to transparency were critical factors in its success."

Mumtaz Fund, which invests in blue chip companies listed on the Kuwait Stock Exchange (KSE), rose in value during the period by 51.4 per cent compared with 31.8 percent for the market benchmark, the KIC Index. Idikhar Savings Fund was ranked the top performing Kuwait money market fund with an annualised quarterly yield of 4.53 per cent compared with the KIBOR (Kuwait Inter-Bank Offering rate) rate of 2.5 per cent.

Mr Alhasawi said "diversification across a range of asset classes allowed Markaz clients to manage risk while achieving returns that met their investment objectives. Forsa Fund, which was the first fund in Kuwait to write call options on listed Kuwaiti companies, provided a conservative, low-risk investment while other funds took more investment risk but had the potential to provide higher returns. In this context, Forsa Fund could be used as a hedge against higher-risk funds.

Midaf Fund, Kuwait's largest fund, posted a 41.2 per cent return compared with 31.8 percent for the KIC market index. Markaz Islamic Fund, a conservatively managed Sharia-compliant fund that invests in listed and unlisted companies, achieved a 43.2 per cent return on investment compared with 37.7 per cent registered by the market benchmark, the Al Mal Sharia Index.

"Approaches taken by fund managers are designed to meet investment objectives and Markaz offers clients global asset allocation across five asset classes: equities, fixed income, private equities, real estate and alternative investment," Mr Alhasawi said.