The Global Saudi Equity Fund invests in stocks listed on the Saudi stock exchange and seeks to achieve long-term capital growth with predefined and controlled levels of risk, Global Saudia said in a statement.

It aims to realize returns that exceed the average by benefiting from the expected economic growth in Saudi Arabia while maintaining a suitable level of diversification for fund assets and reduction of total risk by investing in different market sectors.

The fund was awarded an S&P “A” Fund Management rating after demonstrating high standards of quality based on its investment process and consistency of performance compared to its peers due to the Fund managers’ sensible approach to portfolio construction, driven from the bottom up and incorporating a top-down/thematic overlay.

Value screens, fundamental analysis and asset management research all help construct a focused portfolio of stocks where the managers feel intrinsic value is not recognized by the market.

The managers are aware of the fund’s benchmark when constructing the portfolio, but are not constrained to it, leaving plenty of scope to add value through stock selection and asset allocation.

Since its launch, the Global Saudi Equity Fund has consistently outperformed its benchmark and peers, with stock selection being the main driver.

In 2010, the fund achieved 15.2 percent returns compared to the benchmark return of 8.2 percent, outperforming the benchmark by more than seven percent.

The fund has achieved a return of 56.1 percent since its inception in February 2009, compared to the benchmark return of 38.2 percent outperforming the benchmark by 17.9 percent.

Standard & Poor’s stated that the fund’s managers aim to outperform the benchmark index by three to five percent over five years with a focused portfolio of around 20 Saudi equities.

The approach they follow is primarily bottom-up, although top-down factors are considered and can guide sector allocation.

The managers target companies whose intrinsic value is not yet recognized by the market, using traditional value screens and broker research to throw up ideas.

The team assesses most preferred stocks on a market-multiples basis, applying DCF models for stocks where conviction is highest.

They use their own judgment on liquidity, preferring to search across the entire capitalization spectrum.

Zeyad Awad, head of asset management at Global Saudia, said: “We are very proud with the “A” Fund Management rating provided by S&P to the Global Saudi Equity Fund, which clearly indicates that the strategy we have been following is achieving the desired results. Our experienced investment team will continue analyzing companies to determine their economic worth based on projected future earnings and cash flows, while taking into consideration economy and market activity.”

Global has a history of being recognized as one of the leading asset management and investment banking firms in the region, offering a wide spectrum of investment services to institutional and retail clients.

Three other funds managed by Global, the Global GCC Large Cap Fund, the Global GCC Islamic Fund and the Global 10 Large Cap Fund were also awarded the S&P “A” Fund Management rating.