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Emirates Gateway Fund
The Emirates Gateway Fund is an open-ended single country equity fund giving regional and international investors access to the UAE capital market.
| Structure | An open-ended investment trust fund established by the Sponsor in accordance with the provisions of Resolution No. 164/8/94 of the Board of Directors of the UAE Central Bank Objective |
| Objective | To achieve above average long term returns from capital gains and dividend income, principally through investments in publicly traded UAE equity securities |
| Markets covered | The Dubai Financial Market ("DFM"), the Abu Dhabi Securities Exchange ("ADX") and NASDAQ Dubai ("NASDAQ Dubai") |
| Base currency | AED |
| Management Fee | 1.50% |
| Performance Fee | Simple - 10% over 8% |
| Minimum subscription | AED 200,000 |
| Subscription/Redemption | Weekly |
| Administrator | Apex Fund Services (Dubai) Ltd |
| Bloomberg | EMIRGAT UH |
The Fund Manager's Market Commentary for May 28, 2013
The Emirates Gateway Fund gained a further +4.04% in April versus a gain of +5.88% for the S&P UAE Composite Index. For the year the EGF remains ahead of its benchmark by about 6%. As UAE markets added to their annual tally, the funds gains were broad based. Our relative underperformance this month was mainly a function of sharp spikes in speculative financial and industrial names which prefer not to hold.
Global markets have remained buoyant with the onset of summer evidently brushed aside by optimistic investors thus far. Murmurings of the fed easing up on QE by summers end seem to abound however we believe that such action is unlikely to be at the expense of the Fed’s evidently strong commitment to growth. We continue to expect some volatility in markets through summer months, however keenly observe global macro data and importantly central bank policy stances while maintaining our expectation of continued global growth for the year.
UAE markets have remained on the up through May, however the dominant trend through the month has been retail driven buying of speculative names alongside, and in many cases well above, solid fundamentally driven blue chips. The broad re-rating argument for the UAE market remains quite intact, with valuations broadly still inexpensive, risk premiums diminishing as the economy expands and a possible catalyst around the corner in the shape of a possible MSCI upgrade of the UAE to emerging market status. Should the upgrade occur we would expect the recent market exuberance to continue near term, however do expect some consolidation as summer months, especially Ramadan, approach and volumes dwindle. Accordingly, we remain broadly constructive on UAE equities into year-end; over the month we have booked some gains in a disciplined fashion through the recent rally and look to deploy this cash into our core conviction list as buying opportunities emerge.
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