SAB Invest Sukuk Fund

SAB Invest Sukuk Fund invests in sukuk approved by its Shariah Committee. Its units are denominated in US dollars, and it distributes income to unitholders every quarter. It is an open-ended public investment fund classified under the Bond and Sukuk Funds category, managed by SAB Invest, and classified as a medium-risk fund. According to the terms and conditions, its objective is to grow invested capital and generate income.

The fund focuses on sukuk that comply with Shariah principles and allocates its investments geographically across domestic sukuk, at up to 95%; regional sukuk, between 10% and 95%; and international sukuk, at up to 50%. Sukuk investments range from 70% to 100% of assets, while up to 30% may be allocated to Murabaha transactions or to publicly offered Murabaha funds licensed by the Capital Market Authority in Saudi Arabia.

The investment policy permits investments in issues with investment-grade credit ratings, as well as unrated issues or those rated below investment grade, subject to a maximum of 50% of the fund’s sukuk holdings. Under exceptional market conditions, or when suitable sukuk investment opportunities are limited, the fund manager may hold most or all of the fund’s assets in cash or Murabaha investments.

The sukuk in which the fund invests may be denominated in multiple currencies, including the US dollar, Saudi riyal, UAE dirham, Qatari riyal, and Malaysian ringgit. This currency diversification means that the value of investments and the returns achieved may be affected by exchange rate fluctuations against the US dollar, which should be considered when assessing investment risks.

The fund targets income distributions at the end of March, June, September, and December each year. Unitholders registered on the last valuation day of the relevant month are entitled to these distributions. Distributions are deposited into investment accounts within 20 business days from the end of the relevant month. Distributions are at the discretion of the fund’s Board of Directors, which may defer them if it considers doing so to be in the best interests of unitholders. Capital gains arising from selling sukuk at prices higher than their purchase prices are not included in the income targeted for distribution; instead, they remain within the fund’s net asset value.

SAB Invest Sukuk Fund measures its performance against the Dow Jones Sukuk Total Return Index, which is available through Bloomberg. As a total return index, it accounts for returns from its constituent sukuk alongside changes in their prices. This is consistent with measuring the fund’s performance on a total-return basis, including distributions.

Dealing and valuation take place on business days from Sunday to Thursday. The deadline for receiving subscription and redemption requests is 4:30 PM Saudi Arabia time. Redemption proceeds are paid before the end of the fourth business day following the valuation day. Requests may be submitted through SAB Invest’s investment centers or its electronic channels.