Rasmala Global Sukuk Fund Report - May 2017

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1. Rasmala Global Sukuk Fund May 2017 % at the start of the month- Investment Objective Fund Information The Rasmala Global Sukuk Fund ("Fund") is a UCITS sub-fund of an open-ended, Luxembourg incorporated, umbrella investment company. The Fund invests in a diversified portfolio of Shari’a compliant assets comprised primarily of investment grade government, government related and corporate sukuk. The Fund is dynamically managed and targets both income and capital appreciation. The Fund targets the distribution of dividends in July and January. Asset Type Fixed Income Fund USD Fund Size USD 22.5 million Domicile* Luxembourg Market Performance Custodian KBL European Bankers GCC spreads tightened in May with cash flush investors continuing their relentless yield pursuit. The bullish sentiment was supported by a steadily declining interest rate environment and OPEC / Non-Opec members agreeing to extend production cuts for another 9 months. In the primary market USD 5.2 billion was issued in May. ACWA Power (USD 814m), Oman Electricity Transmission Co (USD 500m), Qatar Islamic Bank (USD 750m), National Bank of Kuwait (USD 750m), Oman Government (USD 2b) and Al Baraka Bank Group (USD 400m) all successfully issued bonds/sukuk which traded well at the break. The Tier 1 perpetual issuance by Albaraka Banking Group ("ABG") performed surprisingly well considering the deeply subordinated holding company structure of the instrument. Pricing of 7 ⅞% does not, in our view, compensate for quasi-equity exposure however it appears to have been popular with yield hungry private bank investors. On a relative value basis we find the shorter duration senior unsecured Albaraka Turk 2019 sukuk a more compelling investment proposition. Administrator Kredietrust Luxembourg The Fund returned 0.46% (Benchmark 0.51%) with the performance primarily driven by longer duration sukuk (SECO 43s & 44s, Malaysia 26s, Rak 25s) as the US Treasury market overlooked low unemployment numbers and rather focussed on mixed economic data, weak wage growth and benign inflation numbers. South Africa's 2020 sukuk recovered some of April's losses which were caused by political uncertainty and negative credit rating action. Duration and the average profit rate declined to 4.04 years (Benchmark 4.92 years) and 3.56% (April 3.80%) respectively due to higher month end cash holdings. The weighted average credit rating remained unchanged at Baa2. Min. Add. Subscription Market Outlook The focus in the coming weeks will be on the resolution of political tensions between Qatar and Saudi Arabia, UAE and Bahrain. Whilst we believe that these will ultimately be amicably resolved due to their longstanding relationship and substantial stakes at play, the timing of such resolution remains unpredictable. Should no tangible progress be made in the coming weeks, the current Qatari political risk premium is likely to increase and pressure prices across the broader GCC. Fund Performance (%) May 2017 2016 2015 2014 Open-Ended Number of Holdings 41 Subscription Frequency Daily Redemption Frequency Daily Lock Up None Official NAV/unit 104.02 Management Fee 0.85% Min.Initial Subscription ISIN Number USD 500 USD 100 LU1039506784 Valor Number CH23768376 Bloomberg Ticker RASGLIULX *Prior to 24th February 2014, this Fund was domiciled in the Cayman Islands and followed a similar investment strategy. The performance figures contained herein therefore reflect those of the Cayman Fund prior to 24th February 2014.The inception date of the Cayman Fund is 30th April 2012. Portfolio Manager Doug Bitcon Morningstar Ratings* 2013 *Source: Morningstar Direct - 05/31/2017. Risk Metrics** 0.46 3.02 4.97 2.18 3.85 0.33 Citigroup Sukuk Index 0.51 2.95 4.01 1.59 6.33 0.43 0.59 -2.48 -0.11 -0.05 April 30, 2012 Structure Morningstar Rating Overall YTD Rasmala Global Sukuk Fund1 Relative Performance Inception Date 0.07 0.96 Modified Duration 4.049 Weighted Average Profit % 3.565 Weighted Average Rating Baa22 Annualized Performance (%) 1Y 3Y 5Y 10Y Since Inception2 Rasmala Global Sukuk Fund1 4.70 3.55 3.94 NA 3.85 USD/Unit Jan July 2013 3.00 1.50 2014 1.50 2.00 2015 Source: Rasmala’s internal performance measurement team, Bloomberg. 1 Performance is net of fees based on Distribution Share Class in USD as of 31st May 2017. 2 Inception date of performance measurement period is 30th April 2012. 1.50 1.50 2016 1.50 1.50 2017 1.50 -- Performance Graph **Based on performance data since inception date. Citigroup Sukuk Index 3.99 3.61 4.02 N.A 3.93 Relative Performance 0.71 -0.05 -.0.08 N.A -0.09 $130 Standard Deviation 2.07 Income Distribution History $121.05 $120 $120.58 $110 $100 $90 Rasmala Global Sukuk Fund www.rasmala.com Citigroup Sukuk Index
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Rasmala Global Sukuk Fund May 2017 Geographic Allocation Country Dubai Malaysia Turkey Indonesia Qatar Saudi Arabia Supranationals Luxemborg South Africa Bahrain Ras Al Khaimah Kuwait UK Pakistan Cash Geographic Allocation (%) Sector Allocation Fund 28% 12% 10% 9% 8% 7% 6% 4% 2% 2% 2% 2% 2% 1% 5% Holdings 11 4 4 3 4 4 2 1 1 1 1 2 1 1 1 Dubai Sector Bank Sovereign Real Estate Developer Utility Supranationals Airlines Telecoms Ports Insurance Retail Real Estate Leasing Real Estate Logistics Oil Production Investment Education Petrochemical Cash Sector Allocation (%) Credit Rating Fund 23% 19% 9% 6% 6% 5% 5% 5% 4% 3% 3% 2% 2% 2% 1% 1% 5% Holdings 11 8 3 3 2 2 1 1 1 1 2 1 1 1 1 1 1 Credit Rating Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 B2 B3 Weight 2% 2% 3% 9% 8% 10% 6% 14% 22% 10% 5% 6% 2% 1% 1% Bank Malaysia Sovereign Turkey Real Estate Developer Utility Indonesia Supranationals Qatar Airlines Saudi Arabia Telecoms Supranationals Ports Luxemborg Insurance South Africa Retail Bahrain Real Estate Leasing Real Estate Logistics Ras Al Khaimah Oil Production Kuwait Investment UK Education Pakistan Petrochemical Cash Cash Contact Information Rasmala Investment Bank Ltd. Dubai International Financial Centre The Gate Village Building 10, Level 01 P.O. Box 31145 Dubai, United Arab Emirates Tel: +971 (4) 363 5600 Fax: +971 (4) 363 5635 Eric Swats, CFA Head of Asset Management Email: eric.swats@rasmala.com Rasmala Client Service Email: clientservice@rasmala.com Important Notice This report is prepared by Rasmala Investment Bank Limited ("RIBL"). RIBL is regulated by the Dubai Financial Services Authority ("DFSA"). RIBL products or services are only made available to customers who RIBL is satisfied meet the regulatory criteria to be a " Professional Client", as defined under the Rules and Regulations of the Dubai Financial Services Authority (“DFSA”). Investment recommendations take into account both risk and expected return. We base our long-term fair value estimates on a fundamental analysis, after having taken perceived risks into consideration. We have conducted reasonable research to arrive at our investment recommendations and fair value estimates for a product mentioned in this report. Although the information in this report has been obtained from sources that RIBL believes to be reliable, we have not independently verified such information thus it may not be accurate or complete. RIBL does not represent or warrant, either expressly or impliedly, the accuracy or completeness of the information or opinions contained within this report and no liability whatsoever is accepted by RIBL or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. Matters of past performance in this document should not be taken as an indication or guarantee of future performance and RIBL makes no representation or warranty, express, implied or otherwise, regarding future performance. 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The research analyst or analysts responsible for the content of this report certify that: (1) the views expressed and attributed to the research analyst or analysts in the report accurately reflect their personal opinion(s) about the subject securities and issuers and/or other subject matter as appropriate; and, (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views contained in this report. Certain information contained in this report constitutes “forward-looking statements”, which can be identified by the use of forward-looking terminology such as “projected” or “estimated” or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the Market may differ materially from those reflected or contemplated in such forward-looking statements. RGSF/FF/RIBL/MAY2017