Global Arab Network | Vision Real Economy Fund - S&P Fund Services assigns A ratings to Vision Emerging Oman Fund

Translate this article to your language:

GANPublications

e-Publications

Add Site to Favorites

Add Page to Favorites

Make Homepage

Share This Page

RSS Feed

--------------------------------------------------------------------------------------------------------------------
| |

Vision Real Economy Fund - S&P Fund Services assigns A ratings to Vision Emerging Oman Fund

Global Arab Network - - Mohammed Almasri

Thursday, 13 May 2010 11:53

Standard & Poor’s Fund Services, the Middle East’s leading provider of qualitative fund management research and ratings, today announced that it has assigned A (New) fund management ratings to two Oman domiciled open-ended investment funds managed by Vision Investment Services Co.: Vision Emerging Oman Fund and Vision Real Economy Fund..

Launched in August 2007 to meet demand from domestic institutional and retail investors in Oman, the Vision Emerging Oman Fund is run in a benchmark-aware fashion, unlike its S&P A rated Emerging GCC sister fund. Since assuming control in October 2008, lead manager Rajesh Venkiteswaran has maintained the fund's strong performance. It has outpaced its benchmark by around 5% since October 2008 and has also delivered superior returns compared to several key competitors.

The Vision Emerging Oman Fund aims to outperform the MSM 30 index on an annual basis and the portfolio was invested across 31 holdings at the start of 2010. A universe of around 150 stocks is filtered down to 40-50 investable names for which the team maintains their own detailed valuation models and earnings estimates. Top-down factors drive the research effort, with considerable emphasis placed on analysing the government budget, allowing the team to weight the portfolio towards industries that are likely to be winners/losers over the medium and long-term. The team of three, which are responsible for two GCC and one Omani equities mandate totalling around $55m, is smaller than some regional peers, however, resources appear to be used effectively, allowing the fund to achieve an S&P A (New) rating.

“While there has been some change in the management team in the past, we are pleased to see that the investment team of three has been stable for the last 18 months,” said Roberto Demartini, lead analyst at Standard & Poor’s Fund Services. “More importantly, fund advisor and Vision Investment Services co-founder Mustafa Ahmed Jaffer continues to play a key role in providing the macro background that drives the team's research effort.”

Mr Venkiteswaran, who has gained considerable portfolio management experience on both sides of the Arabian Sea since, will also manage the recently launched Vision Real Economy Fund, which aims to capitalise on the growth prospects of the GCC economies.

“While most funds investing in this area of the world will typically have a strong bias to financials, as the name of this fund suggests, it will only focus on the sectors of the market that are closely related to the real economy,” Mr Demartini added. “This product is a play on the region's long-term need for infrastructure, which in turn is a result of its young and growing population. The narrower investable universe nevertheless leaves sufficient room for Venkiteswaran and his team to manoeuvre.”

Although a benchmark for the Vision Real Economy Fund is not available, the team aims to deliver returns above their mainstream Emerging GCC fund and outperform a broader GCC benchmark over at least a three-year period. The fund may, when the market becomes more developed, invest in sukuks, and cash can be used to a greater extent than is the case for the team's mainstream fund. The investable universe includes all non-financials stocks listed in the GCC markets, and the approach blends top-down and bottom-up inputs. Macro analysis tends to focus on inflation, government budgets and commodity prices, which sets the tone for the country allocation.

Holding 30-35 names, the mandate allows for investments in the broader MENA region (up to 15%) but this is unlikely at this stage. The proposed allocation is likely to have 35-40% in commodities related names, in particular petrochemicals and, to a lesser extent, downstream and oil & gas. About 20% will be invested in infrastructure development, such as pipes or cement companies. A further 20% should be in services, the likes of telecom companies, logistics or transport services.

Global Arab Network

< Prev		Next >

Add comment

The opinions of the authors in articles published are theirs alone and do not necessarily reflect the views of Global Arab Network
------------------------------------------------------------------------------
Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network