Removing a key hurdle for retail investors, the SNB Capital Saudi Nomu Market Fund provides access to the Nomu parallel stock market without individuals having to meet the “Qualified Investor” criteria – which includes having at least SAR5 million (US$1.33 million) worth in assets.
SNB Capital Asset Management Head Khaled Al Braikan explained to IFN Investor this open-ended Shariah compliant fund is aimed at “investors seeking diversification beyond main market. Parallel markets can provide opportunities for high returns compared to the main market”.
Saudi Arabia’s Nomu market has seen listings of over 80 new companies during the previous three years and “delivering a more than 48% compound annual growth rate over 2019-2024, outperforming the main market (Tadawul All Share Index) by almost 40% over the same period”.
Within Nomu market offerings, which include SMEs that are wishing to expand without yet meeting the main market requirements, the investments aim is to achieve long-term capital growth via Shariah compliant stocks – incorporating IPOs, rights issues and real estate investment trusts.
As fund manager Al Ahli Financial Company (SNB Capital) adopts an actively-managed strategy, this high-risk fund “has the flexibility to invest partially in small and mid-capitalized stocks listed on the main market”, exchange-traded funds plus counters transferred from Nomu to the main market within the previous five years.
With at least 50% of the net asset value (NAV) invested in Nomu instruments, up to 40% of the NAV can go towards main market stocks while a cap of 30% applies on assets that can be invested in other public Saudi equities investment funds.
Up to 35% of the NAV can be invested in money market funds, Sukuk funds and public fixed income instruments that are Shariah compliant. Further, a cap of 15% NAV applies for investments in derivatives contracts for hedging purposes.
Launched on the 8th October 2024, with minimum SAR5,000 (US$1,333) subscription entry and SAR2,000 (US$533.33) in subsequent multiples, the 60-day initial offer period ended early on the 30th November 2024 with SAR79.34 million (US$21.16 million) received.
Having its performance benchmarked against the AlAhli Capital Shariah Compliant Total Return Growth Index, full fund operations began on the 2nd December 2024. To cover cashflow issues, the fund can obtain Shariah compliant financing capped at 15% of NAV and for a period less than a year.
There will be no distributions to unitholders as capital gains and cash dividends will be automatically reinvested.
*Disclaimer: The opinions and viewpoints expressed in the Fund Profile do not constitute as a recommendation for any funds highlighted. The information presented is not investment advice and should not be treated as such.
| SNB Capital Saudi Nomu Market Fund (AlAhli Saudi Growth Market Equity Fund) | |
| Fund manager | Al Ahli Financial Company (SNB Capital) |
| Launch date | 8th October 2024 |
| Asset class | Public equities and Shariah compliant securities |
| Base currency | SAR |
| Initial investment | SAR5,000 (US$1,333), subsequent multiples of SAR2,000 (US$533.33) |
| Investment objective | To achieve long-term capital growth by investing in public equities compatible with Shariah guidelines |
| Benchmark | Al Ahli Capital Shariah Compliant Total Return Growth Index |
| Risk profile | High risk |
| Distribution | Profits reinvested, not distributed, to optimize capital gains |
Source: SNB Capital
