AlMaather REIT Fund

AlMaather REIT Fund is a closed-end public real estate investment fund listed on the Saudi
Stock Exchange on 22nd August 2017. The fund was established with the aim to invest in real
estate assets within the country. It is managed by Osool & Bakheet Investment Company
(OBIC), which is a joint stock company and is one of the leading companies in the brokerage &
asset management sector of Saudi Arabia. Al Maather REIT was founded after a merger of the
Osool Capital Company and the Bakheet Investment Group. The fund distributes at least 90% of
its net profit to the unit holders annually, after the Fund Manager receives the rental returns on
the real estate assets. The Fund is allowed to invest in real estate development projects
considering:

a) 75% of the total fund assets must be income generating and

b) The Fund will not invest in white lands.

The fund is involved in managing many properties like: Al Maathar, Al Rabie, Al Mohammadia,
Al Tkhassusi, Al Sahafa building 1, Al Sahafa building 2, Hair warehouses, Sulai warehouses,
Rabie Agreement,Qudus Agreement,Wadilaban Agreement andDabbab Agreement.

Performance analysis
Sharpe Ratio

The Sharpe Ratio is calculated by taking the return of the portfolio and subtracting the risk-free
return, then dividing the result (the excess return) by standard deviation of the portfolio returns.
Sharpe ratio is actually measurement of excess return (over risk-free rate) per unit of risk.

Significance of Sharpe ratio

 The greater a portfolio's Sharpe Ratio, the better its risk-adjusted performance. A
negative Sharpe Ratio indicates that a risk-less asset would perform better than the
security being analyzed.
 This measurement is very useful to compare funds with similar returns or high returns, by
analyzing the same in line with the risk taken.
  Risk-adjusted financial performance of investment portfolios or mutual funds is typically
measured by Sharpe's ratio. From an investor's point of view, the ratio describes how well
the return of an investment compensates the investor for the risk he takes.

Formula

Sharpe Ratio = (Total Return – Risk Free Rate) / Standard Deviation of Fund

Total return = (9.23 / 11) -1 = -16%

Risk free rate = 1.2% (https://fred.stlouisfed.org/series/INTGSTSAM193N)

Standard deviation = 0.37% (Exhibit 1)

Sharpe ratio = (-16%-1.2%) / 0.37%

Sharpe ratio = (46.41) units

The very low Sharpe ratio is evident of the declining returns of the fund. This might be due to the
fact that the fund came into existence in august and is apportioning its investments. Further, this
might also be possible due to the fact that T bills of the government are not yet issued due to
which the fund is not been able to benefit from the fund.

Exhibit 1