Markaz launches first of its kind ‘GCC Momentum Fund’
KUWAIT: Kuwait Financial Centre (Markaz) announced the launch of its newest ‘GCC Momentum Fund,’ the first fund of its kind to invest in the GCC markets. The Fund’s strategy is to invest in shares with high momentum score and tracks the S&P Momentum GCC Composite Index.
The fund is the first in the GCC to implement factor-investing, whereby the index provider follows a transparent process to select stocks in line with best international practices, considering the level of liquidity and market depth. The GCC Momentum Fund offers our individual and institutional investors exposure to stocks with the best risk-adjusted returns.
The “GCC Momentum Fund” launch reflects Markaz’s ongoing effort to offer its clients innovative investment tools and solutions to improve risk-adjusted returns to its investors. The Fund’s methodology has been developed internally by Markaz’s MENA Equities technical team, who spent over two years analyzing and doing due diligence to test and prove the concept’s validity in collaboration with the index provider S&P.
Commenting on the Fund, Senior Vice President Fund & Portfolio Management, MENA Equities, Mohammed A Al-Ghannam, said: “We are pleased to launch the “GCC Momentum Fund”, as the first passive Fund in the GCC that adopts earning momentum methodology. The process was developed by conducting a thorough historical analysis and comparing several investment methodologies factoring in stock performance and risk. The momentum strategy has increasingly attracted the demand of investors. In the past ten years, the S&P GCC Momentum Index outperformed S&P GCC Composite Index by 1.7 percent per annum. The Fund is catered to investors seeking to invest in the GCC markets and with an investment objective to achieve a long-term favorable risk-adjusted return. The Fund’s investors will benefit from the compounding effect by investing long-term. The Fund is a gateway to Markaz’s “factor strategies.”
Also commenting on the Fund, Vice President MENA Equities at Markaz, Fahad S Al-Rushaid, said: “The Markaz’s momentum methodology selects stocks according to factors and foundations that are in line with the global markets’ practices. To enhance liquidity and volatility, the stocks are selected from those that collectively compose 50 percent of the market capitalization of the GCC markets. The constituents of the index are reviewed every six months. Markaz GCC Momentum Fund offers a lower expense ratio than other GCC equities funds.”
Markaz has continuously and effectively innovated investment products and financial services, and this is evident through the development of unique investments to cater to the various investor needs. Amongst these products are “Mumtaz,” the first domestic mutual fund, and “MREF”, the first real estate investment fund in Kuwait, as well as “Forsa Financial Fund”, the first options market maker in the GCC since 2005.