Dubai: Last year saw Emirates NBD Asset Management deliver another year of strong results across its suite of funds and mandates. Consistent performance and continuation of a strong track record saw the firm grow its Assets under Management (AuM) by 29 per cent from $2.99 billion (Dh10 billion) to $3.85 billion.
“In 2016 we maintained our track record for generating strong and consistent returns for clients. The success we enjoyed is particularly pleasing given the adverse market conditions experienced by the region, particularly as a result of low oil prices. Our extensive experience in emerging markets will be of importance as we seek fresh opportunities to deliver positive results in 2017,” Tariq Bin Hendi, CEO, Emirates NBD Asset Management, said in a statement.
The Emirates MENA Fixed Income Fund demonstrated a solid absolute, and one of the strongest relative performances among the product suite. The fund, which closed 2016 with an AuM of $149 million, generated a net return of 7.7 per cent for the year. It also outperformed its benchmark by a margin of 2.8 per cent. These results were achieved primarily by a combination of strong bond selection in the UAE and an underweight country allocation to Qatar. Additionally, the fund deployed short US Treasury positions, as a hedge against rising interest rates. The fund paid a semi-annual dividend of 2.5 per cent in December 2016, which translated into a total dividend of 5 per cent for the year.
The Emirates Emerging Market Corporate Bond Absolute Return Fund delivered one of the highest absolute returns in 2016, generating 14.5 per cent for the year. The peer-group average for the same period was only 12.4 per cent, meaning that EMCAR was ranked 1st of 275 funds in the Morningstar EM Corporate Bond Universe for 2016. The fund owns CDS positions in the Philippines, Indonesia, Brazil, South Africa and Hungary, as a hedge against wider credit spreads. The main contributors to its performance were Brazil and Indonesia, which have become more attractive in light of lower yields in developed markets and stabilising currencies. The fund paid a semi-annual dividend of 2.5 per cent in December 2016 and a total dividend of 5 per cent equivalent for the year.
Having benefited from successful stock selection in the UAE and Saudi Arabia, the Emirates MENA Top Companies Fund was up 6.5 per cent for the year, 1.6 per cent ahead of its benchmark. Despite concerns in Q3 about the Saudi economy, a successful Eurobond launch and payment of government arrears resulted in the Saudi equity market rallying almost 30 per cent in the final quarter of the year. The portfolio manager was able to generate alpha during this upturn by active stock selection. The fund also ranked in the top quartile in the Morningstar Middle East & Africa annual ranking.