Global Investment House “Global” announced today that despite turbulent market conditions in international markets, their Kuwaiti flagship fund “Global Local Fund” has substantially outperformed its benchmark. While the index is down 12.3% the fund has recorded a negative return of only 6.1% during the first nine months of 2008, which places Global Local Fund as one of the leading equity funds in the Kuwaiti market. The fund also enjoys a long term track record of consistent and strong performance with a cumulative return of 213% since its inception in 2003.
Mr. Omar El-Quqa, Executive Vice President at Global, said, “The fund’s strong performance relative to the index is attributable to the team’s dynamic and research driven investment approach. Our value-oriented investment process has proven to be very successful over the long term. Detailed analysis is conducted to identify attractive investment opportunities in an effort to outperform the average market return. The market volatility currently being witnessed has served to further reinforce the value of sound investment strategies followed by Global and our commitment to long term investing.”
Mr. El-Quqa attributed the recent declines in the Kuwaiti equity market to the negative sentiment currently prevailing due to the international financial markets turmoil. He said, “Given that we live in a globalized financial market, the mood in the regional equity markets has also been affected by the fear that has gripped the world’s financial markets. However, the current turbulent stock market conditions offer an attractive entry point to long term investors in the Kuwait Stock Exchange. The recent decline in the domestic market has brought valuation to levels not witnessed in a long time.”
He also highlighted that equity in general remains an attractive asset class. He said, “Long term equity investing has historically generated superior returns compared to other asset classes. For example, Kuwaiti equities have produced returns in excess of 20% per annum on average over the past five years despite the recent losses. We would emphasize that investors should focus on the long term fundamentals of the Kuwaiti economy which remain very favorable”.
Mr. El-Quqa further added, “We would also highly recommend that individual investors should entrust professional fund managers to manage their equity investments in the local market. Institutional fund managers are better positioned to pick the right stocks and achieve an optimal level of diversification. Individuals would typically not have access to the tools and resources that are available to institutional fund managers which enables them to navigate the markets in a more efficient manner especially in the current volatile market conditions.”
Commenting on some of the benefits of investing through mutual funds, Mr. El Quqa said, “Carefully selected mutual funds should prove to be an efficient way of investing in the local market over the long term. In addition to superior research capabilities, institutionally managed funds provide better diversification as their size allows them to invest in a cautiously selected broad based portfolio of companies across various sectors.
This reduces company and sector concentration enabling investors to enjoy the benefits of investing in the Kuwaiti market at an optimal level of risk. At the same time, funds do not employ leverage, which enables them to remain invested throughout the investment cycle. Leveraged investors are forced to liquidate when markets fall sharply which generally results in sharp losses.
Highly leveraged investors are typically compelled to sell at the worst possible time. Whereas mutual funds, that are not leveraged, are capable of riding volatile market conditions and generate superior long term returns”.
In addition to the wide array of Kuwaiti and GCC equity funds, Global currently manages over 35 investment funds with various investment strategies and objectives. Many of Global’s funds have won regional and international awards. Global is currently one of the largest asset management companies in the Middle East .
About Global Investment House “Global”
Global Investment House “Global” is a full-fledged investment company incorporated in 1998, and falls under the regulation of the Central Bank of Kuwait. Its underlying foundation is to meet the high expectations of local and international clients, and to enhance the investment service industry and the capital market in Kuwait and the region. Today, Global stock lists on the Kuwait, Bahrain, Dubai and London Stock Exchanges. Global plays an important role in promoting investment opportunities in the MENA region to investors through expert financial engineering, in-depth research and reports to advance the capital market in the region. Thus, Global’s achievements have been recognized on local, regional, and international levels. The company’s current assets under management reached KD2.5 billion (USD 9.4 billion) by 30 June 2008.
