An Emirates NBD Company EMIRATES DYNAMIC LIQUID FUND Fact Sheet • October 2009 Fund Objective Details The investment purpose of the Dynamic Liquid Fund is to provide professional, Discretionary institutional and high net worth investors with a professionally managed means of Investment Manager: Emirates Bank International PJSC, UAE participating in Shari’a compliant liquid assets. The primary investment objective of Delegate Emirates Investment Services Limited, the Dynamic Liquid Fund is to achieve a higher profit return than traditional Shari’a Investment Manager: regulated by the Dubai Financial Services Authority compliant bank deposits of similar liquidity, predominantly from a diversified portfolio of Shari’a compliant money market instruments usually through the use of Fund Manager: Emirates Fund Managers (Jersey) Limited collectives investing in such instruments. The Dynamic Liquidity Fund will seek over Fund Type: Open ended investment fund time to acquire a diversified portfolio of collective investment schemes and direct investment, including but not limited to, investments in Murabaha and Sukuk, Domicile: Jersey, Channel Islands predominantly via instruments available in the GCC and MENA markets. Fund Launch Date: 30 November 2005 Current Fund Size: USD 64.7m Market Commentary Annual Institutional: 0.25% Q3 earnings helped the markets maintain the positive trajectory at the beginning Management Fee: Retail: 0.50% of October. To date, of those companies that have reported, over 80% have seen NAV/Share (27/10/09): Institutional: 11.51 earnings beat expectations, although as with the second quarter, much is still Retail: 11.40 coming from cost cutting, with very few delivering top line sales growth. There have been continued mix signals from other economic data points, with a NAV/Subscriptions: Weekly, cut off noon Sunday combination of both positives and negatives. Broadly, it would appear that the US “cash for clunkers” program and the US house purchase tax credit relatively Redemptions: Weekly, cut off noon Sunday successfully boosted activity, confirmed in the US Q3 GDP numbers released at Valuation Point: Tuesday, every week the end of October. However, against this background, demand for US Treasuries is still very high, several major European and US financials may be about to Bloomberg Ticker: EMDYLQI JY Equity embark on further capital raisings, whilst consumer confidence has dropped back. On the last day of the month a sharp drop in equities resulted from the announcement that US consumer spending had dropped back into negative Target Asset Allocation Restrictions territory in September, following a positive result in August. Earlier in the month, Asset Class Min Neutral Max oil broke through the $80 price barrier, following continued US$ weakness, but Callable cash 0% 0% 5% retrenched to close at $77 by month end. Despite some late gains, the US$ lost ground vs GBP, Euro and Australian $ through October, but regained some Murabaha 10% 30% 70% previous losses vs the Yen. Fixed deposits 0% 0% 30% Sukuk 30% 35% 65% The Emirates Dynamic Liquid Fund returned a strong 0.23% in October, Collectives 0% 35% 60% outperforming the Morningstar Enhanced Money Market peer group benchmark Islamic structured deposits 0% 0% 10% by 20bps. The regional fixed income market continued to thrive in the wake of the confidence that Dubai (and the UAE) will fulfil their debt obligations. There has also been a lot of activity on the market with new issues coming through to satiate Performance History some of the appetite. Most recently (and notably) the issue of the Dubai 11.5 Government Department of Finance Sukuk was over 3X oversubscribed. The continued issuance of Sukuk by companies as they raise funds from the market place rather than borrow from the banks will free up liquidity and offer investors 11.0 a broader range of assets for diversification, something that this market has historically lacked. We have continued to further reduce risk and trimmed exposure to Nakheel, selling piecemeal while the market continued to rise. Banks 10.5 are no longer desperate for cash with many only offering the current EIBOR on I-Class R-Class deposits having previously paid a significant spread. As a result we maintain our Morningstar USD Enhanced Money Market strategy to place as much long-dated Murabaha as possible without affecting the 10.0 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 liquidity profile while locking in the more attractive rates for as long as possible. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Top 5 Holdings % % % % % % % % % % % % % 1. AED Murabaha 50.40% 4. DP World Ltd '17 9.13% 2005 – – – – – – – – – – – 0.40 0.40 2006 0.33 0.38 0.38 0.43 0.37 0.38 0.50 0.44 0.47 0.42 0.40 0.50 5.09 2. JAFZA '12 13.68% 5. Wings FZCO '12 4.96% 2007 0.41 0.39 0.51 0.40 0.44 0.59 0.45 0.40 0.56 0.46 0.31 0.63 5.67 3. Nakheel Development '09 7.25% 2008 0.37 0.23 (0.14) 0.48 0.67 0.33 0.25 (0.08) (0.33) (0.50) (0.02) 0.38 1.66 2009 0.29 0.30 0.29 0.08 0.35 0.19 (0.04) (0.17) 0.01 0.23 – – 1.54 Source: Morningstar and EBI, $ terms, bid to bid, periods as stated Performance Data Institutional Retail Benchmark 1 Month Performance 0.23% 0.22% 0.03% Fund Weightings 3 Month Performance 0.07% 0.03% 0.08% Asset Allocation 12 Month Performance 1.91% 1.70% -1.17% Year to Date 1.54% 1.38% 0.33% Murabaha 50.40% Performance since Launch 15.11% 13.96% 6.95% Sukuk 43.90% CAGR Since Inception 3.66% 3.40% 1.73% Shari’a Compliant Deposits & Cash 5.70% Volatility 0.85% 0.84% 1.14% Sharpe Ratio (0.32) (0.63) (1.94) This document is provided for informational and illustration purposes only. It does not constitute a solicitation, recommendation or offer to buy or sell any investment product or subscribe to any investment management or advisory service. Past performance of the Fund as illustrated herein is not a guarantee of future returns. Prospective investors in the Fund must obtain and carefully read the Fund's most recent Private Placement Memorandum and Supplement prior to making an investment in the Fund. The information contained herein, including any expression of opinion, has been obtained from or is based upon sources believed to be reliable, and is believed to be fair and not misleading. However, Emirates Fund Managers (Jersey) Limited, Emirates Islamic Bank, Emirates Bank, National Bank of Dubai PJSC and Emirates Investment Services do not guarantee its accuracy or completeness. Emirates Investment Services Ltd is regulated by the Dubai Financial Services Authority (the “Authority”) and can directly engage with Professional Clients only, as defined by the Authority. This document is not for distribution to the general public. It is directed at persons authorized to invest in the Fund and residing in jurisdictions where the Fund is authorized for distribution or where no such authorization is required and Emirates Investment Services Ltd will not be held liable for actions taken, or not taken, as a result of the publication of this document. Prospective investors should be aware that investment in the Fund carries a significant degree of risk. The Fund is intended for sophisticated investors only who understand the risks involved in investing in the Fund and can withstand any potential loss there from. Past performance is no guide to future returns. The Fund is not guaranteed and investors may not get back the amount originally invested. Furthermore, the Fund contains specific geographical and asset class risks, whereby it might be difficult for an investor to realise an investment in the Fund, or to obtain information about performance. All data contained above is source: Emirates Bank, bid to bid with net income reinvested. US Dollar terms. The information contained herein must not be reproduced in whole or in part without the prior written consent of Emirates Fund Managers (Jersey) Limited, Emirates Islamic Bank, Emirates Bank and Emirates Investment Services. EIB is acting as an agent of the fund and EIB shall assume no responsibility for losses which an investor may suffer as a result of investing in the fund and all fund related issues would remain the responsibility of the appointed managers of the specific fund.
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