On the back of increased risk appetite that led to a strong stock market rally in the first three months of 2012, Gulf equity funds, led by Saudi Arabia and the UAE, performed notably well during the period, according to Lipper, a Thomson Reuters unit.
The positive feeling about the market in the first quarter, however, did not fully compensate the negative sentiment in the first quarter of 2011. Overall, according to the latest data obtained by Gulf News, funds flows in the first quarter totalled $877.3 million (Dh3.22 billion), only half of the outflows of $1,685.9 million during the same period last year.
This year’s relatively strong start can be seen in the average performance gain of 11.02 per cent against a negative return of 1.72 per cent in the first quarter of 2011. Equity funds, in particular, averaged a gain of 11.64 per cent, in stark contrast to a decline of 1.85 per cent, during the same period in 2011. All categories experienced double-digit performances, except for Equity Kuwait funds.
The fund sector allocations along with higher exposure to Dubai index as against Abu Dhabi have been the main combination behind the outstanding performance of Al Mal UAE Equity Fund since the beginning of 2012, says Tariq Qaqish, manager of the fund, which topped the UAE funds list for the quarter, beating the S&P GCC Index (see table).