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AAIB Mutual Fund (Shield)

Fact Sheet January 2014

Investment Objective
The fund seeks long-term capital appreciation by investing in publicly traded Egyptian stocks.

Fund Details Fund Type Fund Manager Launch Date Structure Domicile Fund Currency Administrator Custodian Auditors NAV per Certificate* Subscription/Redemption** Management Fee Performance Fee Administration Fee Custodian Fee Subscription Fee Redemption Fee Min. Initial Investment Equity Fund AAIM February 26,1998 Open Ended Egypt EGP AAIB AAIB KPMG Hazem Hassan EGP 119.52 Daily 0.9% 12% above excess return over CB discount rate 1.0% 0.25% None 0.75% 1 certificate

Fund Managers Commentary The benchmark index kicked off the first month of the year on a strong note largely accentuated by political catalysts. The newlydrafted constitution passed by 98.1% with a 38.6% turnout ratio, confirming consensus building and marks a key step towards political stability. It is worth mentioning that 2012 constitutional referendum had a total turnout ratio of 32% and was approved by roughly 63%. The results were later followed by another market trigger with the interim President announcing an alteration to the initial political roadmap by running presidential elections ahead of parliamentary elections. The news was well received in the market as investors believed the move should speed up the election of a permanent government that is expected to take vital decisions and carryout structural reforms necessary to revive the economy. The aforementioned news coupled with a clear interest by the army chief General, Abdel Fatah al-Sisi, to run for president flourished market gains to close January up 9.2%. On the economic spectrum, the budget deficit narrowed c.3% y-o-y to reach EGP89.4 billion (4.4% of GDP) during 1H2014 down from EGP91.7 billion (5.2% of GDP) reported a year earlier. This comes relatively in line with the governments target to lower the budget deficit to c.10.0% of GDP in FY2014 as opposed to 13.7% reported in FY2013. On a similar note, the minister of planning stated that the government is targeting a real GDP growth rate of 3.0%-3.5% in FY2014. In terms of funding avenues, oil-rich GCC countries continue to lend support to the country. Saudi Arabia announced an additional USD4.0 billion worth of aid in the form of deposits at the Central Bank of Egypt (CBE) as well as fuel shipments. UAE also extended an additional USD1.8 billion aid package in the form of fuel shipments. We continue to expect additional financial support from GCC countries especially if the elected President gains broad consensus from key supporters like Saudi Arabia, UAE, and Kuwait. On the corporate front, EFG Hermes announced plans to buy back shares worth EGP1.0 billion to be executed over two phases. The first phase was executed end of January and incorporated the buyback of c.36.6 million shares at EGP11.50 per share with a total value of c.EGP425 million. The second phase is valued at EGP575 million and is expected to take place during 2Q/3Q-2014. The stock reacted positively to the news as some investors believed that management are in pursuit to unlock value in the stock while others anticipate a major corporate action over the coming period.

*As of 01/01/2014 ** Daily subscription and redemption until 12 pm throughout AAIB branches NAV is published weekly in Al Masry Al Yom Newspaper

Fund Performance

January 2014 Shield EGX30 8.2% 9.2%

2014 YTD 8.2% 9.2%

2013 21.2% 24.2%

2012 28.3% 50.8%

Shield vs. EGX30*

140 120 100 80 60 40 20 -



*Performance since 15/10/2008 date at which AAIM started managing the fund

Key Statistics* Shield Standard Deviation EGX 30

Return vs. Volatility *

10.0% 8.0%

16.6% 0.07 0.27 -9.7% 61.7%

28.9% -0.15 N/A -20.9% 56.7%



Investment Approach Sharpe Ratio**

Information Ratio*** Max. Monthly Loss % Of Positive Months


4.0% 2.0% 0.0% 0% 10% 20% Standard Deviation 30% 40%

EGX 30

*Data since 15/10/2008 date at which AAIM started managing the fund **Measures risk adjusted return compared to risk free rate ***Measures risk adjusted return compared to EGX 30

*Annualized data since 15/10/2008 date at which AAIM started managing the fund

We are value investors. We invest in quality companies we believe are undervalued by the market. In an effort to limit downside risk and maximize upside potential, we typically seek out companies that have strong competitive positions, solid financials, and capable management teams. Our goal is to generate return through stock selection. We seek inefficiencies in the valuation of companies we aim to invest in. Our investment decisions are primarily long term and research driven.

About Arab African Investment Management Arab African Investment Management (AAIM), a subsidiary of the Arab African International Bank (AAIB), was established in 2006 with investment management as our area of expertise. AAIM covers different asset classes in effort to enhance investors diversification and investment opportunities through Shield (Equity Fund), Juman (Money Market Fund), and Gozoor (Fixed Income Fund). We also manage tailored portfo lios for institutions and high-net-worth individuals. Contact Details Arab African Investment Management 5 Midan Al-Saraya Al Koubra, Garden City 11516, Cairo, Egypt Tel. +202 27926825(7)(9) - Fax +202 27961879 Website: AAIB Call Center: 19555