GCC Mutual Fund Industry - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

GCC Mutual Fund Industry - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Mutual fund assets in the GCC are quite small compared to the size of the GCC economy. The total Assets under management (AuM) in the six GCC countries stand just at USD 32.9 billion in 2018. This is quite low when compared to the combined GDP of GCC countries of USD 1.5 trillion (2018). In percentage terms, the total mutual fund AuM in GCC is just 2.2% of GDP. Considering the global equivalent of AuM to GDP at 15.2%, there is plenty of scope and opportunities for the mutual fund assets to grow in the region.

With many GCC-domiciled mutual funds investing in local equities, bonds or sukuk, and exclusively long the market, they typically need some degree of economic upswing and positive growth in stock markets or fixed income if investments are to grow.

Owing to GCC’s affinity with Islamic Finance the asset management industry has made significant progress in the area of Shariah-compliant funds, particularly in Saudi Arabia.

Mutual funds face difficulty in marketing and distribution to GCC nationals who are primarily reached through banks. AMCs often enjoy exclusive access to their parent bank's distribution network. This creates a situation where it is difficult for an AMC to compete if it does not have a network of bank branches.

Key Market TrendsEmerging Leadership of Saudi Arabia in GCC Capital Markets

In GCC, there are two active asset classes within the industry: Mutual Funds and Private Equity & Other Alternative Assets. Mutual funds are, by and large, a function of the size and growth of the regional capital markets. GCC equity markets underperformed global peers during 2019, reporting significantly lower gains during the year.

Saudi Tadawul has traditionally been the biggest market in the GCC region. This is not surprising considering the relative size of KSA’s economy. Qatar and UAE are placed next in the order. The Capital Markets Authority (CMA) in Saudi Arabia is also actively improving the regulatory framework for listing and corporate governance with a view to building more depth.

GCC Mutual Fund AuM By Fund Category

Asset gathering has been difficult in the region as seen from the low size of mutual fund AuM compared to the GDP, in spite of the abundant private wealth and liquidity. Equity mutual funds, the primary vehicle for asset gathering were hit hard by the global financial crisis of 2008 which led most investors to pull their money out and the industry has not recovered since then. Equity Funds are predominant in this region. Bond Funds are a relatively new product and since the GCC debt markets have only recently seen reforms, their size is also very small. Real estate funds, a popular choice of many GCC investors have given negative returns since 2015 and so have been unable to increase their AUM.

Competitive Landscape

The report includes an overview of MF companies operating across GCC. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters, and financial performance. Currently, some of the major players dominating the market are listed below.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned
 
Riyad Capital
NCB Capital
Samba Capital & investment Management
HSBC Saudi Arabia Ltd
ANB Invest
Saudi Hollandi Capital
Al Rajhi Capital
Jadwa Investment
Caaam Saudi Fransi
BNP Paribas Asset Management*

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