emiratesnbd assetmanagement newsletter...emiratesnbd assetmanagement newsletter quarter4-2011...

Emirates NBDAsset ManagementNewsletter

Quarter 4 - 2011

Contents> Letter to investors page 1

> Market performance page 2

> Investment ideas for volatile markets page 3

> MENA markets - defensive page 4

> Emirates NBD fund performance pages 5 & 6

> Emirates Islamic Alternative Strategies Fund page 7

> Equity manager of the year award page 8

> Product performance page 9

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Dear investor

The third quarter of 2011 brought unprecedented volatility toworld markets. Using the S&P 500 as an example, the third quartersaw 19 trading days where the index moved more than 2% in asingle day. This represents almost 30% of the trading days in thequarter. Many investors, driven by concerns about governmentdebt in Europe as well as fears of a global slowdown, rushed intosafe haven investments such as US treasuries. Although aninvestment in treasuries may provide some respite from the storm,a ten year yield of 1.9% is unlikely to provide investors with thelong term returns they require to fund their needs.

The world equity markets declined 17% as gauged by the MSCIWorld index. Emerging markets fared worse with an overall dropof 22% as many investors lowered their estimates for futuregrowth due to a slowdown in the developed world. Despite thegloomy outlook, there were some bright spots in the quarter.Among investments that had a positive third quarter were goldwhich rallied 8%, as well as our Emirates MENA Fixed IncomeFund, which notched a gain of 0.5% for the 3 month period.Our Emirates Islamic Money Market Fund also continues its solidperformance with a gain of 0.2% for the quarter, bringing itsyear to date gain to 1.3%.

It is worth highlighting that MENA equity markets performedquite well in the quarter when compared with global equitymarkets. Many regional companies are starting to lookattractive relative to their international peers based on

As world governments and central banks continue to be pushed by markets towards rapid policyresponses, the pace and frequency of market gyrations seems to be approaching a frenetic speed.This has meant that many investors have struggled to keep up with changing market views.

valuations, dividend yields, and future growth prospects. Inaddition, the prospect of an MSCI upgrade to emergingmarkets status is a potential catalyst for the UAE and Qatarmarkets in the fourth quarter.

As promised in our previous Newsletter, we have been workinghard to bring you new investment opportunities. One of theprofiled ideas that is featured in this Newsletter is the re-launchedEmirates Islamic Alternative Strategies Fund. Also included in thisNewsletter is a topical article about investment ideas for today’svolatile markets. I trust that these articles will provide you withsome new investing insights. While it may be difficult to copewith market volatility, the current period creates significantopportunities for investors who are willing to look beyond theshort term horizon.

As we are in the final quarter of the year, our investment teamscontinue to work diligently to deliver superior returns forinvestors.

Regards

Deon VernooyHead of Emirates NBD Asset Management

Frederic de MelkerHead of Priority Banking

Newsletter Q4 2011 > Page 1

For access to our quarterly newsletter or fact sheets for theinvestment products, please follow the link indicated here:

http://www.emiratesnbd.com/assetmanagement

You are welcome to contactEmirates NBD Asset Management on:

Tel: 04 370 0022 Fax: 04 370 0035

Email: [email protected]

Emirates NBD Asset Management Limited (“Emirates NBD AM”) is regulated by the Dubai Financial Services Authority (“DFSA”) and is licensedto distribute and market investment products to Professional Clients only (as defined in the DFSA’s Conduct of Business Rulebook clause 2.3.2)

Market performanceDoom, Gloom… Boom?Marc Faber is a contrarian investor who has long been bearish about theUS economy. Nicknamed “Doctor Doom”, he is best known for his GloomBoom & Doom Report, a financial publication that outlines investmentopportunities that exist on Horace’s guiding philosophy that ‘many shallbe restored that are now fallen and many shall fall that are now in honour.’At the risk of using his wisely selected words, albeit in a different order,we report on this quarter’s gloomy markets, data and events that could bethe doom of the anticipated euphoric boom.

Global manufacturing data in the first week of July set off a tumultuousstart to the 3rd quarter as it continued the weak trend of the past fewmonths which dampened the excitement over the Greek Parliamentaryacceptance of a second round of austerity cuts at the end of June. Thepositive momentum that built up in the run up to the EU Summit in the 2ndhalf of the month, where the Greek bailout, worth “up to €159b”,combined with expanded powers for the European Stability Fund (EFSF)was short-lived as Italian and Spanish markets fell under the pressure thattheir own debt burdens may prove too heavy. July saw investors taking verymuch the “risk-off” approach to their investment profiles as global equitymarkets were sold off and US Treasuries reprieved their safe-haven statusdespite the threat of a potential US default at the beginning of August, asthe politicians in the US could not agree on extending their own debtceiling which risked the Government running out of funds. Poor GDP dataon the final day of July also then surprised sharply on the downsiderevealing a gloomier economic picture than had previously been feared.

Index / Market Value at 3 Mths 6 Mths 1 Yr 3 Yrs 5 Yrs30.09.2011 % % % % %


EQUITY INDICESFTSE 100 5,128.48 -13.74 -13.78 -7.57 4.61 -13.96Dow Jones 10,913.38 -12.09 -11.64 1.16 0.58 -6.56S&P 500 1,131.42 -14.33 -14.82 -0.86 -3.00 -15.30Nikkei 225 8,700.29 -11.37 -10.39 -7.14 -22.73 -46.05Dax 5,502.02 -25.41 -22.04 -11.67 -5.64 -8.37MSCI India 643.52 -12.68 -15.29 -19.50 26.47 28.35MSCI Arabian Markets 631.87 -7.69 -9.11 -9.57 -31.17 -38.94MSCI Emerging Markets 880.43 -23.19 -24.07 -18.14 11.88 13.14MSCI Europe 78.36 -16.80 -18.71 -12.94 -12.44 -34.32MSCI World 1,104.06 -17.06 -17.36 -6.37 -6.63 -19.61Dubai 1,431.71 -5.62 -7.21 -14.97 -65.31 -70.29Abu Dhabi 2,533.41 -6.32 -3.78 -5.23 -35.97 -28.52Jordan 1,991.60 -4.87 -8.28 -13.65 -51.03 -39.27Bahrain 1,165.75 -11.67 -18.64 -19.31 -52.66 -47.83Egypt 4,137.35 -23.00 -24.51 -37.64 -41.39 -35.80Morocco 23,644.19 0.14 -7.81 -4.17 -7.40 28.21Qatar 8,393.92 0.39 0.08 9.08 -9.88 11.64Kuwait 5,833.10 -6.09 -7.33 -16.49 -54.57 -42.66Oman 5,602.29 -5.31 -10.01 -13.45 -34.04 2.87Saudi Arabia 6,112.37 -7.05 -6.86 -4.38 -18.05 -46.43

FIXED INCOME2 Year US Treasury Yield 0.24 -46.90 -68.91 -42.44 -87.60 -94.8110 Year US Treasury Yield 1.92 -39.39 -44.24 -23.68 -49.90 -58.6110 Year UK Gilt Yield 2.43 -28.11 -33.75 -17.63 -45.38 -46.27JPMorgan Global Govt Bond Index 518.50 3.06 6.69 5.16 27.41 46.47BarCap Global Emerging Mkt Yield 6.54 17.84 13.74 24.57 -23.15 6.86BarCap Inv Grade Yield 4.29 12.60 4.63 -2.05 -47.62 -19.51BarCap Global High Yield 9.65 30.41 34.40 22.31 -27.22 24.68

CURRENCYUSD Per GBP 1.558 -2.92 -3.04 -0.84 -12.47 -16.76USD Per Euro 1.339 -7.69 -5.24 -1.81 -5.00 5.63Yen Per USD 77.06 -4.34 -7.03 -7.75 -27.38 -34.79

COMMODITIESGold Spot 1,624.0 8.24 14.12 24.12 86.46 171.43Brent Crude 106.3 -4.60 -8.65 28.93 9.00 73.15S&P GSCI Commodity Index 591.0 -11.64 -16.90 8.23 -5.02 38.07

Data source: Bloomberg

Helen HolmesFund Manager

The downtrend continued into August where risk assets once again did notfare well at all. Global equities closed the month 7.3% lower, whilst theperceived “safe-haven” assets such as US Treasuries and gold recordedfurther gains. Having left it to the 11th hour, the extension of the US debtceiling eventually came through at the beginning of the month, andsubsequently the S&P credit rating agency downgraded the US sovereignrating from AAA to AA+. This combined with the continued barrage of poormacro-economic data, resulted in the high-risk markets being sold of heavily,although there was a degree of damage control done in the build up to andthe aftermath of the US Federal Reserve conference at Jackson Holeremembered fondly for the launching of the second round of quantitativeeasing in 2010. Very little came out of the conference this time, apart fromvague suggestions that the Fed still had various policy tools hidden up theirsleeves should they be required. Given that macroeconomic leadingindicators did not look healthy, corporate earnings revisions’ had turnednegative and that Greece remains poised on the point of implosion, volatilityremained high, and positive returns for 2011 appeared to be doomed.

Three main recurring concerns drove the market lower in the final monthof the quarter: escalating problems in the Eurozone, slowing economicglobal data and data out of China raising the likelihood of a potentiallyvery hard landing. The Eurozone was the main driver of the weakness withinvestors becoming increasingly worried about a Greek default and whatimpact this would have on European banks and the borrowing costs forother struggling Eurozone countries such as Spain and Italy. Global

economic data continued to disappoint with PMInumbers showing deterioration, and unemployment(particularly in the US) remaining high. Counter-intuitively the USD strengthened significantly withthe concerns over the US debt impasse andfurther high-profile rating downgrades; howeverthe risk aversion in the markets drove investors toseek out fairly valued traditional safety nets.Emerging market and commodity relatedcurrencies were the worst affected by the sell-off.The MSCI World index fell by almost 9% inSeptember as emerging market equities,commodities and even gold and silver which werepreviously safe havens were sold off. Treasurieswere the beneficiary of the uncertainty, despitethe ratings agency concerns, with yields droppingto record lows.

The downward trajectory in macro data remains aconcern for the markets as they search for aglimmer of good news to tide them over whilepoliticians the world over try to resolve internaleconomic issues. The lack of resolution of theEurozone sovereign debt crisis continues to be thecause the main concern the world over, as thelonger the delay, the more inevitable a double-dipas delay breeds further economic deterioration.Having been so oversold in the past 3 months, asmall sample of good news injected into themarkets could project them sharply higher in adisplay of sheer willingness to evade a bearmarket and get the world economy back on track.Unfortunately, considering the state of theeconomic environment, the “boom days” are stillvery far off, and perhaps the only “boom” weexperience in the short-term is the sound a bombmakes when it goes off.

http://new.gloomboomdoom.com/public/pSTD.cfm?pageSPS_ID=1000

Investment ideas forvolatile markets


Sean DaykinSenior Fund Manager

As Mark Twain once said, “history doesn’t repeat itself, but it doesrhyme” and many investors get the strange feeling that we arerepeating the terrible credit crunch of 2008.

Of course the credit crunch of 2008 was primarily caused by sub-prime losses and made much worse by the bankruptcy of LehmanBrothers while this crisis is much more about sovereign debts andthe fiscal problems in Europe and the US.

However, the effects have so far been similar with the globaleconomy beginning to slow and increasing concerns over banksand their liquidity and solvency.

Unfortunately, this time around, Central Banks and Governmentsare less able to provide the boosts that previously helped therecovery get back on its feet as they did in 2009. Interest ratesaround the world in Developed markets remain at or close to zeroand Governments are constrained by the fiscal positions fromincreasing spending.

On the plus side, companies remain in good shape however thereappears to be a lack of confidence which is preventing a hiring surge.

So in this uncertain environment what can investor do?We believe that, despite the uncertainty, declines in many assetprices have created some decent opportunities for investors whoare willing to take on some risk. Specifically;

> High dividend stocks.With the declines in equity prices manycompanies now offer dividend yields that are significant withseveral in excess of 6%, well above the poor yields offered onUS, German or UK Government bonds; GlaxoSmithKline (6.2%),AT&T (6.1%) and AstraZeneca (6%) being just a few examples.The high yield at least offers investors some cushion from furtherequity declines.

> Emerging market bonds. Many emerging markets now havemuch better fiscal situations than the developed markets andare more likely to be upgraded by rating agencies thandowngraded. For example, Qatar or Abu Dhabi Sovereign bondsoffer significantly higher yields than “safe” US Treasuries buthave the same credit rating.

> High Yield bonds. As stated previously corporate balancesheets are quite strong and the risk of default is reasonably low.High yield bonds now offer yields of around 7%.

September is historically a very difficult month for stocks. The Stock Trader’s almanac refers toSeptember as the month when “leaves and stocks tend to fall; on Wall Street it’s the worst month ofall”. Certainly judging by the performance of global stock markets during August and thus far inSeptember, the trend for poor performance seems to be continuing.

In summary, the economic situation remains difficult andthe outlookmurky however we believe that there are stillsome good opportunities for investors (with some riskappetite) to find assets with potentially decent returns.

MENA Markets –defensive over the quarter


Yong Wei LeeSenior Fund Manager

The third quarter of 2011 has been plagued with tumultuous movements in equity markets with theMSCI Emerging Markets and World Equity indices falling by 22% and 17% respectively over thequarter. Fears of a possible recession in the US and Europe, US credit rating downgrade by S&P as wellas sovereign credit risks in Europe were foremost on investors’ minds that culminated in a panic selloff in global equity markets. While MENA equity markets were not spared the malice in global markets,the impact was far more muted with the S&P Pan Arab index declining by just 8% over the quarter.Egypt and Saudi Arabia declined the most for the quarter, down 23% and 7% respectively whileQatar and Morocco proved more defensive, holding flat over the period.

It would seem counter-intuitive for a region that is dependent onoil revenues to hold up so well in light of the global economicconcerns. We’ve examined several possible reasons behind thisand have highlighted them below.

1. The MENA region has been trading at low valuations relativeto its global peers. The occurrence of ‘Arab Spring’ earlierthis year held back performance of the regional markets whileoil prices and global markets continued to perform well. Forexample, for the first half of the year, the S&P Pan Arab Indexwas down by 7% while both the oil price and the MSCIWorld Index were up by 4%. This has resulted in the regioncurrently trading at only 9x 2011 PER compared to 11x forthe MSCI World.

In addition, significant de-leveraging of corporate balance sheetsand business restructuring post the financial crisis in 2008 heldback the performance of regional markets in comparison to itspeers. Since the lowest point of 2009, the S&P Pan Arab Indexhas appreciated by 29%. In comparison, the MSCI EmergingMarkets and World Indices are currently still 88% and 56%higher than the lows of 2009. Hence, in an environment wherethere is uncertainty over future growth, these markets areexperiencing significant weakness, having achieved strong gainsin the last 2 years.

2. High oil price levels continue to support governmentspending. In recent months, GCC governments have placedgreater emphasis on alleviating social concerns such asemployment and housing through increased investment intoinfrastructure and job creation. One such country being SaudiArabia, which recently announced a social expenditureprogramme worth $130bn to be spent over the next fewyears. This is well affordable for a country that has amassedforex reserves of $500bn, about the size of its GDP.

We estimate that the breakeven oil price for GCC fiscal budgetsis $90/b. The average oil price for this year is $107/b, suggestingthat despite the increased spending, the GCC economies arelikely to report a fiscal surplus in their aggregate budget for 2011.Even if the oil price was to fall below $90/b momentarily, thehuge fiscal reserves accumulated should help sustain investmentstowards key initiatives.

3. Macro growth remains relatively robust for GCC. In recentmonths, many economists have downgraded the growthexpectations for developed markets. The IMF now expects GDPgrowth for developed economies to expand by 1.6% for 2011,down from 2.4% previously. In comparison, the GDP growthfor MENA has been lowered marginally to 4.0% from 4.1%.At the corporate level, earnings growth of 15% year-on-yearfor 1H11 supports the view that companies are continuing toreport healthy growth in excess of macro level growth.

ConclusionWith the exception of Egypt, where political uncertainty has taken center stage and is affecting investorsentiment, macro fundamentals for GCC continue to remain supportive of economic growth despite theturmoil affecting developed economies. The key risk lies in a sharp and sustained decline in oil price. However,it is worth highlighting that OPEC, where GCC countries hold majority membership, has a global oil productionmarket share of about 30%. If global oil demand declines due to weakness in the global economy, OPEC isvery likely to act swiftly to reduce supply in order to keep oil prices from declining too sharply.

With this in mind, we remain cautiously optimistic on regional equities. In recent weeks, many attractiveinvestment opportunities have surfaced prominently. These represent companies that have reportedconsistent growth in profits, with good earnings visibility, strong balance sheets and pay an attractivedividend. We continue to seek out such investments for our MENA portfolios. We believe that investinginto robust companies at attractive valuations will yield promising returns over the medium to long term.

Product performance


Source: FactSet Systems, USD, Bid to Bid, periods as stated.

Scott SamuelPerformance analyst

Emirates Real Estate FundObjective: The Emirates Real Estate Fund is a Shari'a compliant investment that aims to achieve high-yielding rental incomeand medium to long term capital growth by investing in a diversified portfolio of residential and commercial properties. TheFund will focus predominantly on real property assets throughout the UAE, whilst retaining the flexibility to invest in marketsoutside of the UAE.

Performance: Since its launch in mid 2005, the Emirates Real Estate Fund has returned a total -15.0% which equates to acompounded annual growth rate of -2.6%. The Real Estate Fund has been temporarily suspended for dealing in and outof the fund so returns stated here are as of the latest available price date of 30 June 2011.

Emirates Islamic Money Market FundObjective: The Emirates Islamic Money Market Fund is a Shari’a compliant investment that aims to achieve a higher profitreturn than traditional Shari’a compliant bank deposits of similar liquidity. The Fund will primarily invest in diversifiedportfolio of Shari’a compliant money market instruments including collectives investing in such instruments.

Performance: The Emirates Islamic Money Market Fund rose by 0.2% for the 3 months ended September 2011. Thiscompares with a benchmark (3 Month Libor + 0.5%) of 0.19%. The Fund launch was 14 April 2010. Since this inceptionperiod, the fund has returned 2.3% on an annualized basis.

Emirates Global Sukuk FundObjective: The Emirates Global Sukuk Fund is a US Dollar denominated, Shari’a compliant open ended fund that will investin a diversified portfolio of Sukuk issues by companies locally and globally. The primary investment objective of the Fundis to achieve high income as well as capital growth. Certain share classes of the Fund will make income as well as capitalgrowth. Certain share classes of the Fund will make income distributions on a semi-annual basis, derived from incomegenerated by the underlying sukuk or maturity proceeds of sukuk.

Performance: The Emirates Global Sukuk Fund fell by 0.6% in the 3 months ended September 2011. Since inception theFund’s return is 8.0% with a volatility of 3.3% (annualized). The Fund launch was 21 April 2010.

Emirates MENA Fixed Income FundObjective: The Emirates MENA Fixed Income Fund is a US Dollar denominated open ended fund, which aims to achieve ahigh level of income as well as capital growth, predominantly through a diversified portfolio of MENA debt securities ofvarying maturities along with cash and other ancillary instruments, such as Wakala. The Fund may also take on exposureto issuers outside the MENA region provided a significant part of their business activity is derived from the region. The Fundmay take exposure to non-MENA securities up to a limit of 20%.

Performance: The Emirates MENA Fixed Income Fund rose by 0.5% in the 3 months ended September 2011. This compareswith a benchmark (HSBC Middle East Total Return Index, weighted with 5% cash) that was up 1.1%. Since Fund launchon 10 March 2010 the Fund is up 12.0% with a volatility of 4.6%.

Emirates Islamic Global Balanced FundObjective: The primary investment objective of the Emirates Islamic Global Balanced Fund is to achieve medium to long termcapital growth while minimising risk through diversification across asset classes. The Emirates Islamic Global Balanced Fundwill invest in a diversified portfolio of collective investment schemes and direct investments, including but not limited to,investments in Murabaha, Sukuk, Real Estate and Equity.

Performance: The Islamic Global Balanced Fund fell by 9.7% over the 3 months ending 30 September 2011. The Fundmanaged to outperform the benchmark by 3.0% over this same period. The fund’s volatility of 7.7% remains well belowthe benchmark’s volatility of 9.5%.

Emirates MENA Opportunities FundObjective: The objective of the Fund is to provide investors with a professionally managed means of participating in Shari’acompliant growth investments across a range of MENA markets. The Fund aims to achieve long-term capital growth froma diversified portfolio of Shari’a compliant equity securities, although it can take on exposure to other assets from time totime if the Investment Manager believes it would be appropriate to do so. These assets include, but are not limited to,Murabaha and fixed deposits, Sukuk, trade finance, real estate, alternative strategies and cash equivalent assets.

Performance: The MENA Opportunities Fund returned -4.8% for the third quarter while its benchmark index return was -4.1%. This performance results in a total return of -11.8% (vs -20.3% for the benchmark) since the fund’s inception at theend of April 2006. The annualised return (2.3%) remains well ahead of the benchmark’s annualised return of -4.0%. TheFund has been able to outperform the benchmark over the long term while also maintaining a similar volatility level to thebenchmark, 14.9% versus 14.5%.

406080

100120140160

Dec-05

Ap

r-06

Au

g-06

Dec-06

Ap

r-07

Au

g-07

Dec-07

Ap

r-08

Au

g-08

Dec-08

Ap

r-09

Au

g-09

Dec-09

Ap

r-10

Au

g-10

Dec-10

Ap

r-11

Au

g-11

Fund

100

101

102

103

104

Mar-10

Ap

r-10M

ay-10

Jun

-10Ju

l-10

Au

g-10

Sep-10

Oct-10

No

v-10D

ec-10

Jan-11

Feb-11

Mar-11

Ap

r-11M

ay-11

Jun

-11Ju

l-11

Au

g-11

Sep-11

Fund Benchmark

95

100

105

110

Mar-10

Ap

r-10M

ay-10

Jun

-10Ju

l-10

Au

g-10

Sep-10

Oct-10

No

v-10D

ec-10

Jan-11

Feb-11

Mar-11

Ap

r-11M

ay-11

Jun

-11Ju

l-11

Au

g-11

Sep-11

Fund Benchmark

95

100

105

110

115

Feb-10

Mar-10

Ap

r-10M

ay-10Ju

n-10

Jul-10

Au

g-10

Sep-10

Oct-10

No

v-10D

ec-10Jan

-11Feb

-11M

ar-11A

pr-11

May-11

Jun

-11Ju

l-11A

ug

-11Sep

-11

Fund Benchmark

80

90

100

110

120

Ap

r-06

Au

g-06

Dec-06

Ap

r-07

Au

g-07

Dec-07

Ap

r-08

Au

g-08

Dec-08

Ap

r-09

Au

g-09

Dec-09

Ap

r-10

Au

g-10

Dec-10

Ap

r-11

Au

g-11

Fund Benchmark

30507090

110130150

Ap

r-06

Au

g-06

Dec-06

Ap

r-07

Au

g-07

Dec-07

Ap

r-08

Au

g-08

Dec-08

Ap

r-09

Au

g-09

Dec-09

Ap

r-10

Au

g-10

Dec-10

Ap

r-11

Au

g-11

Fund Benchmark MSCI Arabian Mkts

Product performance


Source: FactSet Systems, USD, Bid to Bid, periods as stated.

Emirates Islamic Alternative Strategies FundObjective: The Fund is seeking to generate positive absolute returns through all market cycles by investing in Shari’acompliant investment vehicles employing investment strategies that, in the opinion of the Manager, offer the prospect ofhigh risk-adjusted returns. The Fund will aim to generate returns that are independent of wider market movements andtherefore will aim to provide protection from volatility normally associated with investment in traditional securities markets.

Performance: The Emirates Islamic Alternative Strategies Fund has been re-launched to track the MAN GLG Multi-StrategyFund through the existing Islamic wrapper. The historical performance since December 2002 of the MAN GLGMulti-StrategyFund is 48.3% compared to 22.1% for the HFRX Global Hedge Fund Index. This was accomplished with volatility levels thatwere slightly higher (8.2%) relative to the HFRX Index (6.3%) translating to a higher sharpe ratio (risk adjusted) for the Fund.

Emirates MENA Top Companies FundObjective: The Emirates MENA Top Companies Fund is a conventional fund that aims to achieve medium to long termcapital growth through investments in a portfolio of GCC and MENA listed equities. The Fund will invest primarily in theGCC and MENA region, but may also invest in other jurisdictions if suitable investment opportunities arise. The Fund mayalso invest in recognised collective investment schemes, and may hold other instruments and deposits in order to preservecapital value and reduce overall portfolio risk.

Performance: Over the third quarter, Emirates MENA Top Companies has produced a total return of -5.0%,outperforming its benchmark index, which returned -6.1% over the same period. Since inception, the fund outperformsits benchmark by 10.4%.

Emirates MENA High Income FundObjective: The Emirates MENA High Income Fund is an open ended fund which aims to provide a high level of income froma managed portfolio of MENA assets. The fund will invest primarily in equities, but also take exposure to other suitable assetclasses such as fixed income instruments, deposits and ancillary assets. Income will be distributed on a semi-annual basiswith a target rate of USD 3 month LIBOR plus 300 to 500 basis points. Additionally, through its mix of underlyinginvestments, the fund offers potential for capital growth.

Performance: The inception date of the MENA High Income Fund was 20 January 2009. Over the third quarter, the Fundhas produced a total return of -3.8% versus a benchmark return of -5.4%. Since inception, the Fund’s return is 35.3% versusa benchmark return of 27.2%. The out performance of the fund has been generated with lower levels of volatility. TheFund’s volatility is at 15.3% versus 16.8% for the benchmark.

Emirates Active Managed PortfolioObjective: The portfolio may invest globally through collective investment schemes in a range of asset classes includingcash/near cash, fixed income, equity, property and alternative strategy funds, with the aim of providing long-term capitalgrowth. The portfolio restrictions and investment strategies that will be followed are such as to characterise this portfolioas medium high risk.

Performance: The Emirates Active Managed Portfolio fell by 10.1% in the third quarter while the composite benchmarkwas down 13.6% over the same period. The Fund manager tenure began in March 2008. Fund performance since thecurrent manager’s inception is -15.2%. This compares to a benchmark return of -18.3%.

Emirates Balanced Managed PortfolioObjective: The portfolio may invest globally through collective investment schemes in a range of asset classes includingcash/near cash, fixed income, equity, property and alternative strategy funds, with the aim of providing long-term capitalgrowth through a balanced investment strategy. The portfolio restrictions and investment strategies that will be followedare such as to characterise this portfolio as medium risk.

Performance: The Emirates Balanced Managed portfolio fell by 7.4% for the quarter ending 30 September 2011. Thecomposite benchmark had a return of -9.5% over the same period. The Fund manager tenure began in March 2008. Fundperformance since the current manager’s inception is -11.3%. This compares to a benchmark return of -12.4%.

Emirates Conservative Managed Portfolio:Objective: The portfolio may invest globally through collective investment schemes in a range of asset classes includingcash/near cash, fixed income, equity, property and alternative strategy funds. The portfolio aims to provide long-termcapital growth through price appreciation through investments in collective investment schemes investing in securities andinstruments in markets worldwide. The portfolio restrictions and investment strategies that will be followed are such as tocharacterise this portfolio as low to medium risk.

Performance: The Emirates Conservative Managed Portfolio fell 2.8% over the quarter ending 30 September 2011, whilethe composite benchmark return was down 4.1% over the same period. The Fund manager tenure began in March 2008.Fund performance since the current manager’s inception is 5.8%. This compares to a benchmark return of 12.2%.

70

80

90

100

110

May-07

Sep-07

Jan-08

May-08

Sep-08

Jan-09

May-09

Sep-09

Jan-10

May-10

Sep-10

Jan-11

May-11

Sep-11

Fund Benchmark

40

60

80

100

120

140

Au

g-07

Dec-07

Ap

r-08

Au

g-08

Dec-08

Ap

r-09

Au

g-09

Dec-09

Ap

r-10

Au

g-10

Dec-10

Ap

r-11

Au

g-11

Fund Benchmark MSCI Arabian Mkts

90100110120130140150

Jan-09

Mar-09

May-09

Jul-09

Sep-09

No

v-09

Jan-10

Mar-10

May-10

Jul-10

Sep-10

No

v-10

Jan-11

Mar-11

May-11

Jul-11

Sep-11

Fund Benchmark

60

80

100

120

140

No

v-05Feb

-06M

ay-06A

ug

-06N

ov-06

Feb-07

May-07

Au

g-07

No

v-07Feb

-08M

ay-08A

ug

-08N

ov-08

Feb-09

May-09

Au

g-09

No

v-09Feb

-10M

ay-10A

ug

-10N

ov-10

Feb-11

May-11

Au

g-11

Fund Benchmark

60

80

100

120

140

No

v-05Feb

-06M

ay-06A

ug

-06N

ov-06

Feb-07

May-07

Au

g-07

No

v-07Feb

-08M

ay-08A

ug

-08N

ov-08

Feb-09

May-09

Au

g-09

No

v-09Feb

-10M

ay-10A

ug

-10N

ov-10

Feb-11

May-11

Au

g-11

Fund Benchmark

80

100

120

140

No

v-05Feb

-06M

ay-06A

ug

-06N

ov-06

Feb-07

May-07

Au

g-07

No

v-07Feb

-08M

ay-08A

ug

-08N

ov-08

Feb-09

May-09

Au

g-09

No

v-09Feb

-10M

ay-10A

ug

-10N

ov-10

Feb-11

May-11

Au

g-11

Fund Benchmark

Scott SamuelPerformance analyst


Salman BajwaSenior Manager

Publication source: 27 September 2011 – http://www.cpifinancial.net, http://www.bloomberg.com, 28 September 2011 – Gulf News, The National-Business, Khaleej Times, Al Khaleej-Business, Al Bayan-Business, Al Ittihad, Emarat Al Youm

Emirates Islamic Alternative Strategies Fund:tie up with a member of the Man Group

The fund will allocate assets to the Man GLG Multi Strategy Fundwhich is managed by Man Investments, a member of the MANGroup. This allocation of assets will take place through the fund’sexisting Shari’a compliant structure. In addition to this, Emirates NBDAsset Management has waived the fund’s performance fee andreduced the notice period on redemption to 20 business dayseffective from the end of July 2011.

Benefits to investors from this collaborationThe fund is one of the very few Shari’a compliant alternative strategyproducts available in the market today. Through this partnership withMan Group investors will further benefit in the following way:

Emirates NBD Asset Management Limited is collaborating with the world’s largest independentalternative asset manager, Man Group, to build on the success of the Emirates Islamic AlternativeStrategies Fund, which has outperformed its inception since benchmark nearly four years ago.

> The Man GLG Multi Strategy fund offers access to the completerange of MAN Group products

> As a multi strategy solution, the Man GLG Multi Strategy Fundactively allocates assets to the most appropriate alterative strategysolutions

> Investors will be able to share in the performance of the Man GLGMulti Strategy Fund

> Waiver of the fund’s performance fee reduces the cost toinvestors


Salman BajwaSenior Manager

The information and opinions expressed herein are made in good faith and are based on sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. Theseopinions are not intended to serve as authoritative investment advice and should not be used in substitution for the exercise of own judgement. This information, including any expression of opinion, has been obtained from or is based uponsources believed to be reliable, and is believed to be fair and not misleading. Any opinion or estimate contained in this presentation is subject to change without notice. Neither Emirates NBD Group nor any of its directors or employees giveany representation or warranty as to the reliability, accuracy or completeness of the information, nor do they accept any responsibility arising in any way (including by negligence) for errors in, or omissions from the information. For furtherdetails of the investment products available from the Emirates NBD Group please contact your local Emirates NBD/Emirates Islamic Bank Branch. This document is provided for information and illustration purposes only. It does not constitutea solicitation, recommendation or offer to buy or sell any specific investment product or subscribe to any specific investment management or advisory service. Prospective investors in a Fund must obtain and carefully read the Fund’s mostrecent Private Placement Memorandum and Supplement as well as seek separate, independant financial advice if required prior to making an investment in the Fund to assess the suitability, lawfulness and risks involved.

This information is not for distribution to the general public but for intended recipients only and may not be published, circulated, reproduced or distributed in whole or part to any other person without the written consent of Emirates NBDAsset Management Ltd (“Emirates NBD AM”). Where this presentation relates to a Fund or an investment product licensed to be marketed, it is directed to persons authorized to invest in the Fund / investment product as applicable, andresiding in jurisdictions where the Fund / investment product is authorized for distribution or where no such authorization is required. The Fund / investment product is intended for sophisticated investors only who understand the risks involvedin investing in the Fund / investment product and can withstand any potential loss there from. The Fund / investment product may not be guaranteed and historical performances are not indicative of the future or likely performance and shouldnot be construed as being indicative of or otherwise used as a proxy for the future or likely performance of the funds / investment products. The value of the investment and the income from it can fall as well as rise as the Funds / investmentproducts are subject to investment risks, including the possible loss of the principal amount invested. The information contained herein does not have any regard to the specific investment objectives, financial situation or the particular needsof any person. This information has been distributed by Emirates NBD AM for and on its own behalf . Emirates NBD AM is regulated by the Dubai Financial Services Authority.

Emirates NBD Asset Management:equity manager of the year award

Emirates NBD Asset Management, a wholly owned subsidiary ofthe major UAE-bank Emirates NBD, has been presented the firstever Equity Manager of the Year award in Global Investor/isf’sMiddle East awards.

Equity fund managers have had a tough time of it of late. Localunrest and global financial market volatility means that almostall GCC stock market indices have fallen this year, so much sothat in the first quarter of 2011, the majority of GCC Equity fundsgave negative returns.

However, for Emirates NBD Asset Management, a focus on highquality companies has contributed to relative outperformance ofits funds in the year. For example, the Emirates MENA TopCompanies Fund had a one year return of 3.27% compared withthe S&P Pan Arab Index, which provided returns of 0.16%.

Furthermore, in August 2011, Emirates NBD Asset Managementannounced high dividend payouts on its funds for the first halfof 2011. The Jersey-domiciled funds, which cover Islamic andregional debt instruments, as well as a high yielding equity-based product, delivered annualised income distributions of4.5% to 5%.

Emirates NBD’s equity specific funds comprised of stocks linkedto domestic consumption and business investment in SaudiArabia, Qatar and the UAE. They focus on stocks paying highdividends, high quality companies mispriced by the market, andlow valuation multiples compared to other markets.

While recent economic disruption has affected the performanceof regional equity markets, Emirates NBD Asset Management isconfident that this is just a phase.

With a strong performance in testing markets, Emirates NBD Asset Management wins the equitymanager of the year award.

For access to our quarterly newsletter or factsheets for the investment products, please

follow the link indicated here:

http://www.emiratesnbd.com/assetmanagement


Scott SamuelPerformance Analyst

Product performance

Pricing Description Performance3

Mths%

6Mths%

1Year%

3Year%

5Year%

TypeRiskRatingSharia

PrevPrice

LatestPriceProduct Name

Global Fund Range performance summary as at September 2011

1 Islamic Money Mkt 0.21 0.60 2.00 – –

2 USD Fixed Income -7.98 -5.97 -2.94 34.02 59.14

2 Global Multi Asset -2.75 -2.91 -3.59 -4.99 -8.40

2 Global Property 2.12 3.90 5.63 18.42 34.26

2 MENA Fixed Income 0.47 3.69 5.08 – –

2 USD Fixed Income -1.65 0.04 -0.66 24.64 –

3 Global Multi Asset -7.35 -7.28 -4.82 2.06 -7.03



3 Regional Property – -0.82 -14.83 -47.92 -30.56

3 Alternative Strategy -4.14 -4.44 -1.66 -6.49 -5.05

3 USD Fixed Income -2.13 -0.69 -0.46 – –

3 Global Sukuk -0.56 2.12 4.52 – –

4 Global Equity – – – – –

4 Global Equity -22.34 -22.56 -13.83 -12.52 -18.65

4 Specialist Equity -11.75 -11.50 -7.57 -1.50 -27.22

4 Specialist Equity -21.19 -23.74 -24.85 -0.87 -9.18

4 Regional Equity -16.58 -16.31 -5.28 -6.10 -19.68

4 Regional Equity -23.38 -23.34 -15.60 -14.67 -35.05

4 Regional Equity -12.63 -15.14 -7.96 -18.65 -38.87

5 Emgng Mkt Equity -23.00 -24.27 -16.46 17.11 17.76

5 Emgng Mkt Equity -20.74 -21.93 -14.22 49.66 57.16

5 Emgng Mkt Equity -26.90 -29.48 -21.93 -2.38 7.17

5 Emgng Mkt Equity -22.15 -21.77 -19.45 31.89 44.74

5 Emgng Mkt Equity -17.71 -18.82 -20.33 35.98 56.43

5 Regional Multi Asset -4.76 -6.50 -5.64 -24.02 -15.18

5 Commodities – – – – –

5 Alternative Strategy -4.24 -6.44 -4.56 -6.60 –

5 Regional Equity -5.01 -5.47 -3.38 -24.35 –

5 Regional Multi Asset -3.84 -3.70 -3.34 – –

5 Emgng Mkt Debt -1.16 -0.70 -2.41 17.67 26.60

5 Emgng Mkt Equity -22.55 -26.47 -24.35 23.86 –

5 Energy -28.79 -36.13 -17.06 -13.31 –

5 Emgng Mkt Equity – – – – –

Notes:

1. Performance in LOC on a Bid-Bid basis, source: Bloomberg

2. Sharia compliant funds have been approved by the Fatwa and Shari’a Supervisory Board of Emirates Islamic Bank

* The Emirates Real Estate Fund is temporarily suspended for dealing in and out of the funds. Valuations stated here are the latest available prices. There is expected to be an indicative valuationfor the Emirates Real Estate Fund early in Q4.

Emirates Islamic Money Market 10.33 10.33 •

Templeton Global Fixed Income 24.11 26.21

Emirates Conservative Managed 1.03 1.05

Close Freehold Income Trust 3.81 3.8

Emirates MENA Fixed Income 11.2 11.33

PIMCO GIS Total Return Bond Fund 22.61 23.02

Emirates Balanced Managed 1.11 1.15

Emirates Active Managed 1.08 1.13

Emirates Islamic Global Balanced 9.54 10.05 •

Emirates Real Estate Fund* 8.5 8.5 •

GAM Diversity Fund 641.79 654.36

PIMCO Global Investment Grade Credit 12.86 13.14

Emirates Global Sukuk 11.71 11.85 •

Crescent Global Equity •

GAM Worldwide 1908.08 2150.54

Jupiter Income Fund 376.22 383.27

Jupiter Financial Opportunities 282.59 308.29

Franklin Mutual North America 41.27 44.72

Schroder European Fund 16.29 17.73

GAM Japan 980 1004.07

Schroder Emerging Markets 10.61 12.39

Templeton Asian Growth 26.67 31.34

Templeton BRIC 14.35 17.21

Schroder Greater China 35.07 41.4

Franklin India Fund 22.26 24.2

Emirates MENA Opportunities 8.82 8.99 •

Schroder Commodities

Emirates Islamic Alternative Strategies 8.6 8.77 •

Emirates MENA Top Companies 7.89 8

Emirates MENA High Income Fund 1.34 1.35

Schroder ISF Emerging Market Debt AR 25.51 25.82

Prudential IOF Dragon Peacock Fund 15.82 18.01

Schroder ISF Global Energy Fund 28.34 34.43

Emirates Emerging Markets Equity Fund 6.58 7.63 •

Deira BranchBaniyas Road,PO Box 2923 DubaiTel: +971 4 225 0077Fax: +971 4 226 4302

Al Souk BranchAl Falah Road,PO Box 11954 DubaiTel: +971 4 309 3490Fax: +971 4 353 0630

Al Maktoum Road BranchAl Maktoum Road,PO Box 52088 DubaiTel: +971 4 603 6004Fax: +971 4 227 6987

Jumeirah BranchAlWasl Road,PO Box 11909 DubaiTel: +971 4 349 5969Fax: +971 4 349 5453

Jebel Ali BranchNear Gate No. 3PO Box 777 DubaiTel: +971 4 8085800Fax: +971 4 8815545

Green Community BranchPO Box 2923 DubaiTel: +971 4 885 3000Fax: +971 4 885 3639

Dubai Festival City BranchPO Box 2923 DubaiTel: +971 4 232 5568Fax: +971 4 232 5623

Mirdiff BranchPO Box 2923 DubaiTel: +971 4 288 3774Fax: +971 4 288 4695

Mankhool Road BranchNashwan Building, Next to EPPCOMankhool Road,PO Box 2923 DubaiTel: +971 4 398 5848Fax: +971 4 398 6242

Tower Branch (The Tower)Sheikh Zayed Road,PO Box 2923 DubaiTel: +971 4 329 0009Fax: +971 4 332 0990

Al Qusais BranchShowroom 4,Almaidoor ComplexPO Box 2923 DubaiTel: +971 4 263 8777Fax: +971 4 261 1813

Burj Al Arab BranchUmm Suqeim 3, Opposite Burj Al ArabParcel ID 366-104, DubaiTel: +971 4 348 2112Fax: +971 4 348 8494

Galleria BranchHyatt Regency, Corniche Road, DeiraPO Box 2923 DubaiTel: +9714 2738888Fax: +9714 2722086

Barsha BranchPlot no. 376-2378,Near Al Mawakeb School,Road No. 316 & 23,PO Box 2923 DubaiTel: +971 4 3234455Fax: +971 4 3234458

Jumeirah Beach Walk BranchDubai Marina,PO Box 2923 DubaiTel: +971 4 427 0353Fax: +971 4 427 0350

Dubai Mall BranchDubai Mall,PO Box 2923 DubaiTel: +971 4 434 4100Fax: +971 4 434 4133

World Trade Center BranchExhibition Hall No 4. DubaiTel: +971 4 332 3636Fax: +971 4 331 0387

Umm Suqeim BranchSpinneys Centre, Ground Floor,DubaiFax: +971 4 394 0010

Sheikh Zayed Road BranchSaeed Tower,DubaiTel: +971 4 332 2534Fax: +971 4 331 4591

Group Head Office BranchBaniyas Road, Deira,DubaiTel: +971 4 201 2090Fax +971 4 221 8777

Oud Metha BranchGulf Residence Building,DubaiTel: +971 4 336 0015Fax: +971 4 336 6145

Bank Street BranchBurJuman Centre, DubaiTel: +971 4 434 4111Fax: +971 4 434 4139

Emirates Airline HQ BranchAirport Road, DubaiTel: +971 4 286 4461Fax: +971 4 286 4322

Burj Khalifa Residence BranchBurj Khalifa,DubaiTel: +971 4 432 8622Fax: +971 4 432 8621

Jumeriah Beach Road BranchOpposite Marcato Mall, DubaiTel: +971 4 340 0020Fax: +971 4 349 7797

IBN Battuta BranchIBN Battuta Mall, Andalusia Court,DubaiTel: +971 4 429 7917Fax: +971 4 368 5501

Satwa BranchBehind Old Satwa Government Clinic,DubaiTel: +971 4 349 2690Fax: +971 4 349 9030

Nad Al Shiba BranchAl Ain Road, DubaiTel: +971 4 336 3693Fax: +971 4 336 3788

Muraqabat BranchAl Riqqa Street, Near MuraqabatPolice StationDeira, DubaiTel: +971 4 254 6320Fax: +971 4 254 6594

Al Qiyadah BranchOpposite Al Ahli Club & Lulu HypermarketAl Nahda Road, Dubai, UAETel: +971 4 238 8440Fax: +971 4 250 7957

Sharjah Industrial BranchPO Box 44470 SharjahTel: +971 6 534 5577Fax: +971 6 534 6006

Sharjah Main BranchKing Abdul Aziz Rd, Al Qassimia Area, SharjahTel: +971 6 572 8898Fax: +971 6 572 8810

Al Taawun BranchAl Taawun street, Al Taawun 2 Building, SharjahTel: +971 6 545 4666

Abu Dhabi Branch (Najdah)Najdah Road, PO Box 40355, Abu DhabiTel: +971 2 674 5588Fax: +971 2 677 1978

Al Muhairy Center BranchZayed Street, PO Box 34543 Abu DhabiTel: +971 2 631 9696Fax: +971 2 631 8040

Abu Dhabi Main BranchSheikh Khalifa St, PO Box 110811, Abu DhabiTel: +971 2 627 5554Fax: +971 2 626 9398

Muroor BranchAl Muroor Street, Abu DhabiTel: +971 2 449 0404Fax: +971 2 449 4824

Qaryat Al Beri BranchQaryat Al Beri Souq, Level 2, Abu DhabiTel: +971 2 558 7227Fax: +971 2558 1705

Tourist Club BranchElectra St, Tourist Club Area,PO Box 47676 Abu DhabiTel: +971 2 645 1572Fax: +971 264 50384

Al Ain BranchSheikh Khalifa Bin Zayed, Street PlanningRoundabout, PO Box 15095 Al AinTel: +971 3 751 0055Fax: +971 3 751 1300

Fujairah Main BranchHamad Bin Abdullah St, PO Box 1472FujairahTel: +971 9 222 2116Fax: +971 9 222 2115

Ras Al Khaimah BranchAl Muntasir Road, Sheikh Omar bin SaqrAl Qasmi Building, PO Box 12132 Ras Al KhaimahTel: +971 7 227 2800Fax: +971 7 227 3395

Ras Al Khaimah Corniche BranchYousef Obaid Al Neaimi Building, Ras Al KhaimahTel: +971 7 233 3077Fax: +971 7 233 4197

Ajman Main BranchSheikh Rashid Bin Humaid Street, AjmanTel: +971 6 742 4721Fax: +971 6 742 7479

Mushrif Mall BranchUnit 264 & 265, 2nd Floor, Mushrif MallAirport Road, Abu Dhabi, UAETel: +971 2 673 7585Fax: +971 5 673 7238

Branch contact details

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