2 Sharia-compliant global asset allocation Riyadh, Saudi ArabiaIn technical cooperation withIslamic Wealth & Asset Management S.A.Geneva, SwitzerlandApril 2013
3 About Safa Investment Services The Investor for Securities Co. (“The Investor”), founded 2007, licensed by Saudi Capital Market AuthoritySAR 7 billion AUM (about CHF 1.8 billion), mostly local real estate fundsOver 800 domestic Saudi clientsLeading Saudi investment company, over 40 staff, Riyadh basedJust bought position in Islamic Wealth & Asset Management S.A.IWAMSA owns the Safa brand, franchised to The InvestorThe Investor expanding into liquid asset management, Safa Investment ServicesTarget market is awqaf (Islamic endowments), takaful (Islamic insurance), private clientsLarge potential marketEntirely sharia compliant, bottom-up fatwa
4 Islamic asset management Same professional rules as conventional asset management industryStrict filtering, sorting and qualification of all assetsOnly “best of class” assets allowedAsset allocations fully optimized using advanced asset allocation softwareSuperior results from professional asset management
5 The Islamic investment universe There are more than 800 sharia-compliant funds and ETFs in the world today with over $100 billion Assets Under Management (AUM).Must filter & sort these >800 funds and ETFs, then means-variance test to create a proprietary Buy List:More than $50 million AUMMore than 2-year track recordLess than 30-day liquidityAcceptable legal jurisdictionTransparent, timely reportingDirect access to managersFatwa from one or more of the major sharia scholarsQualifying Islamic sub-universe has over$50 billion Assets Under Management.SHARIA-COMPLIANT FUND BUY LISTAsset ClassCountAUMMoney Market17$4.7 billionSukuk60$2.4 billionTrade Finance15$9.6 billionEquities209$14.3 billionPrecious Metals12$18.2 billionReal Estate9$2.5 billionSpecial Strategy59$1.3 billionTotal381$53.1 billionConstruct portfolio allocations among the“best of class” funds on a proprietary Buy List.
6 Asset allocation, hypothetical Balanced strategy ASSET CLASS% OF TOTALMurabaha & trade finance5%Sukuk & trade finance45%Global equities35%Alternative Investments15%1. Above is identical to conventional, but entirely sharia-compliant Balanced allocationMuslims require performance equal or superior to conventional allocations, but with full respect for shariaAll investible assets must be from professional Buy ListAllocations must meet global professional asset management standards, but also strict sharia standards
7 Historic performance Balanced Islamic Portfolio USD 4.39% 24.42% 0.81% Performance measured 1/1/08 to 31/1/13Portfolio Performancevs. 50% ML Bonds/50% MSCI EquitiesUSD global balanced investing comparablesAnnualized ReturnCumulative ReturnAnnualized Excess ReturnCumulative Excess ReturnBalanced Islamic Portfolio USD4.39%24.42%0.81%4.82%Julius Baer Strategy Balanced USD B0.63%3.22%-2.96%-16.37%BlackRock Global Allocation A2 USD0.86%4.43%-2.73%-15.17%Credit Suisse Portfolio Fund Balanced USD B0.49%2.54%-3.09%-17.06%
8 Risk & return Balanced Islamic Portfolio USD 7.03% 0.56 Risk & return variables measured 1/1/08 to 31/1/13Standard DeviationSharpe RatioBalanced Islamic Portfolio USD7.03%0.56Julius Baer Strategy Balanced USD B9.18%0.02BlackRock Global Allocation A2 USD11.84%0.04Credit Suisse Portfolio Fund Balanced USD B11.49%0.0050% Merrill Lynch Global Bonds/50% MSCI Global Equities12.18%0.26
9 Max. Drawdown Begin Date Max Drawdown Recovery Length Drawdown measured 1/1/08 to 31/1/13Max. DrawdownMax. Drawdown Begin DateMax Drawdown Recovery LengthPain IndexGain-to-Loss RatioBalanced Islamic Portfolio USD-16.29%May-08163.56%0.99Julius Baer Strategy Balanced USD B-26.19%Jan-08267.62%0.87BlackRock Global Allocation A2 USD-27.10%Jun-08238.46%0.77Credit Suisse Portfolio Fund Balanced USD B-28.27%248.84%0.9150% Merrill Lynch Global Bonds/50% MSCI Global Equities-29.04%195.90%
10 Return distribution Balanced Islamic Portfolio USD 1.63 0.98% 0.60% Measured 1/1/08 to 31/1/13OmegaMAR = 0%Upside OmegaDownside OmegaZephyr-K RatioBalanced Islamic Portfolio USD1.630.98%0.60%13.4Julius Baer Strategy Balanced USD B1.091.02%0.93%5.30BlackRock Global Allocation A2 USD1.11.39%1.26%5.08Credit Suisse Portfolio Fund Balanced USD B1.081.33%1.23%4.2750% Merrill Lynch Global Bonds/50% MSCI Global Equities1.311.52%1.16%8.59
13 Contacts For more information, Saudi Arabia: Safa Investment Services Safa Investment ServicesThe Investor for SecuritiesAljomaiah Towers, King Fahd RoadP.O. Box 67838Riyadh 11517, Saudi ArabiaTelephone: (1) x 182For more information, Switzerland:Islamic Wealth & Asset Management S.A.1204 GenevaSwitzerlandTelephone: +41 (79)
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