Comparative Analysis Report on the performance of Shariah-Compliant & Conventional Equity Funds

managed by Saudi banks in various markets

Prepared by

Majid DajaniDecember 2007

Criteria

• Only funds listed on Tadawul website were included• Funds launched beyond January 1st 2007 were excluded• Real Estate Funds & Balanced Funds (which mix Equity &

Commodities) were excluded• Some funds have been reclassified i.e. Japanese equity specific

funds have been moved from Global Equity Funds Category (as listed on Tadawul website) to Asian Equity Funds Category

Drawbacks

• Although must of the funds are priced in either US$ or SAR (which is pegged to the US$, therefore there is no FOREX risk), some of the funds are priced in other currencies depending on the market they cover, such as £, € & ¥.

• The returns of funds priced with currencies other than US$ & SAR do not reflect the appreciation in the values of those currencies against the Dollar & Riyal.

• Some of the funds (both local & international) are sector-specific.

• Shariah-Compliant funds do not deal normally in the equity of financial institutions, which imply that comparison is not under equal standards.

• The choice of bench mark indices was totally up to our own selection.

Bench Marks

Market Bench Mark Index CompanySaudi Equity Market Tadawul All Shares Index (TASI) Tadawul Co.

Global Equity Markets Morgan Stanley Capital International Index (MSCI)

MSCI Barra

American Equity Markets S&P 500 Index Standard & Poor’s

European Equity Markets MSCI European Monetary Union Index (MSCI EMU)

MSCI Barra

Asian Equity Markets MSCI Far East Free Index MSCI BarraArab Equity Markets MSCI Arabian Markets Index

Excluding Saudi ArabiaMSCI Barra

DefinitionsSymbol Definitions Symbol Definitions£ Great Britain Pound GCC Gulf Cooperation Council

¥ Japanese Yen KD Kuwaiti Dinar

€ Euro Riyad Riyad Bank

Al Ahli National Commercial Bank SA Saudi Arabia

Al Jazirah Bank Al Jazirah SABB SABB Bank

Al Rajhi Al Rajhi Bank SAIB Saudi Investment Bank

Albilad Bank Albilad Samba Samba Financial Group

ANB Arab National Bank SFB Al Banque Al Saudi Al Fransi

BRIC Brazil, Russia, India, China SHB Saudi Hollandi Bank

CHINDIA China & India YTD Year To Date

Saudi Equity Market - 1 Fund Name Fund Manager Category YTD Return % Evaluation Date

Amanah Saudi Industrial Fund SABB Shariah-Compliant 56.85 11/26/2007

Al Rajhi Local Shares Fund Al Rajhi Shariah-Compliant 45.61 11/28/2007

Saudi Equity Trading Fund SABB 43.66 11/26/2007

Al Fareed Fund SAMBA   41.93 11/28/2007

Saudi Equity Fund SABB 38.31 11/26/2007

Al Saffa Saudi Equity Trading Fund SFB Shariah-Compliant 37.65 11/27/2007

Saudi Istithmar Fund SFB 33.47 11/27/2007

Amanah Saudi Equity Fund SABB Shariah-Compliant 32.52 11/26/2007

Riyadh Equity Fund 1 Riyad 32.2 11/28/2007

Riyadh Equity Fund 2 Riyad Shariah-Compliant 31.09 11/28/2007

Riyadh Equity Fund 3 Riyad 27.31 11/28/2007

Al Raed Fund SAMBA Shariah-Compliant 26.03 11/28/2007

Saudi Companies Fund SAIB Shariah-Compliant 25.91 12/1/2007

Saudi Companies Equity Fund SHB 25.86 11/28/2007

Saudi Equity Trading Fund SHB Shariah-Compliant 24.72 11/28/2007

Al Ahli Saudi Trading Equity Fund Al Ahli Shariah-Compliant 24.26 10/29/2007

Saudi Equity Fund SAIB 23.56 12/1/2007

Al Musahem Fund SAMBA 22.95 11/28/2007

TASI Tadawul Bench mark Index 19.3 11/28/2007

Saudi Equity Market - 2 Fund Name Fund Manager Category YTD Return % Evaluation Date

TASI Tadawul Bench mark Index 19.3 11/28/2007

Asayel Fund Albilad Shariah-Compliant 17.6 11/29/2007

Altaiyebat Saudi Equities Fund Al Jazirah Shariah-Compliant 13.13 11/28/2007

Financial Institutions Fund SABB 12.52 11/26/2007

Saudi Companies Fund ANB 11.41 11/28/2007

Al Naqaa Al Mubarak Fund ANB Shariah-Compliant 7.1 11/28/2007

Saudi Equity Fund ANB 6.95 11/28/2007

Saudi Banks Equity Fund SHB 6.95 11/28/2007

Al Ahli Saudi Dynamic Trading Fund Al Ahli Shariah-Compliant 6.23 12/3/2007

Statistics  

Number of Funds 26

Shariah-compliant Funds 13

Conventional Funds 13

Mean return YTD % 25.99

Standard Deviation % 13.38

Range (highest return - lowest return) % 50.62

Segmental Analysis  

Shariah-compliant Funds average return YTD % 26.82

Conventional Funds average return YTD % 25.16

Difference 1.66

Global Equity Markets - 1

Fund Name Fund Manager Category YTD Return % Evaluation Date

Alfursan BRICs Equity Trading Fund SFB Shariah-Compliant 60.92 11/27/2007

Future Equity Fund Riyad - 39.56 11/30/2007

AlAhli Emerging Markets Trading Fund Al Ahli Shariah-Compliant 35.18 12/3/2007

Amwal Fund Albilad Shariah-Compliant 29.49 11/29/2007

Al Shamekh Islamic Portfolio Riyad Shariah-Compliant 16.76 11/30/2007

Global Equity Fund Riyad Shariah-Compliant 15.62 11/30/2007

Amanah Global Equity Index Fund SABB Shariah-Compliant 15.17 11/26/2007

Telecommunication Fund (1) Riyad - 14.83 11/30/2007

Global Equity Trading Fund (Al Manal) SAMBA Shariah-Compliant 14.62 11/28/2007

Al Shamekh Portfolio Riyad - 14.4 11/30/2007

Amjaad Tamouh SHB - 13.77 12/2/2007

Al Shuja'a Islamic Portfolio Riyad Shariah-Compliant 13.67 11/30/2007

Global Equity Fund SAIB - 13.33 12/1/2007

Al Noor Equity Trading Fund SFB Shariah-Compliant 12.36 11/27/2007

Al Rajhi Global Equity Fund Al Rajhi Shariah-Compliant 12.3 12/2/2007

Al Shogaa Portfolio Riyad - 12.21 11/30/2007

Al Ahli Global Trading Equity Fund Al Ahli Shariah-Compliant 11.48 10/29/2007

YOSR Tamoh Portfolio SHB Shariah-Compliant 11.29 12/2/2007

(1) Priced in €

Global Equity Markets - 2Fund Name Fund Manager Category YTD Return % Evaluation Date

Al Mokdam Islamic Portfolio Riyad Shariah-Compliant 10.73 11/30/2007

Al Mekdam portfolio Riyad - 9.98 11/30/2007

Al Crescent Fund ANB Shariah-Compliant 9.29 11/28/2007

MSCI World Index MSCI Barra Bench mark Index 8.58 11/30/2007

International Equity Fund SAMBA - 7.39 11/28/2007

Al Khair Equities Fund Al Jazirah Shariah-Compliant 6.84 11/27/2007

International Fund Riyad - 5.92 11/23/2007

Technology Fund (1) Riyad - 5.22 11/30/2007

Al Hadi Portfolio Riyad - 4.9 11/30/2007

Small Cap Trading Equity Fund Al Ahli Shariah-Compliant 4.38 12/3/2007

Global Small Cap Equity Fund Al Rajhi Shariah-Compliant 2.54 12/2/2007

Health Care Trading Equity Fund Al Ahli Shariah-Compliant 1.94 12/3/2007

Statistics  

Number of Funds 29

Shariah-compliant Funds 18

Conventional Funds 11

Mean return YTD % 14.69

Standard Deviation % 12.40

Range (highest return - lowest return) % 58.98

Segmental Analysis  

Shariah-compliant Funds average return YTD % 15.81

Conventional Funds average return YTD % 12.86

Difference 2.95

(1) Priced in €

American Equity MarketsFund Name Fund Manager Category YTD Return % Evaluation Date

Al- Ahli US Trading Fund Al Ahli Shariah-Compliant 11.77 12/3/2007

US Equity Fund SHB   6.48 11/28/2007

A I- US Equity Fund ANB   6.44 11/28/2007

American Fund Riyad   5.13 11/30/2007

S&P 500 Standard&Poor’s Bench mark Index 4.43 30/11/2007

US Equity Fund SAIB   4.14 12/1/2007

North American Equity Fund Samba   3.33 11/28/2007

North American Equity Fund SFB   3.13 11/28/2007

US Equity Index Fund SABB   2.6 12/3/2007

US Aggressive Fund Samba   -4.98 11/28/2007

Statistics  

Number of Funds 9

Shariah-compliant Funds 1

Conventional Funds 8

Mean return YTD % 4.23

Standard Deviation % 4.43

Range (highest return - lowest return) % 16.75

Segmental Analysis  

Shariah-compliant Funds average return YTD % 11.77

Conventional Funds average return YTD % 3.28

Difference 8.49

European Equity MarketsFund Name Fund Manager Category YTD Return % Evaluation Date

Al Ahli Europe Trading Equity Al Ahli Shariah-Compliant 18.18 12/3/2007

MSCI EMU MSCI Barra Bench mark Index 17.78 30/11/2007

A I - European Equity Fund ANB 15.59 11/28/2007

European Equity Index Fund SABB 14.63 11/26/2007

Al Thoraya Equities Fund Al Jazirah Shariah-Compliant 13.46 11/30/2007

Amanah Pan European Fund SABB Shariah-Compliant 12.55 11/27/2007

Europe Equity Fund SHB 9.49 11/28/2007

Pan European Equity Fund SFB 7.87 11/28/2007

European Equity Fund Samba 5.55 11/28/2007

European Growth Fund (1) Riyad 5.39 11/30/2007

Al Rajhi European Equity Fund Al Rajhi Shariah-Compliant 2.85 11/25/2007

United Kingdom Fund (2) Riyad 2.08 11/30/2007

Statistics  

Number of Funds 11

Shariah-compliant Funds 4

Conventional Funds 7

Mean return YTD % 9.79

Standard Deviation % 5.41

Range (highest return - lowest return) % 16.1

Segmental Analysis  

Shariah-compliant Funds average return YTD % 11.76

Conventional Funds average return YTD % 8.66

Difference 3.1

(1) Priced in €(2) Priced in £

Fund Name Fund Manager Category YTD Return % Evaluation Date

South East Asia Fund Riyad 58.92 11/30/2007

CHINDIA Free Style Fund SABB 57.25 11/27/2007

China Opportunities Fund Samba 53.48 11/28/2007

India & China Equity Fund Al Rajhi Shariah-Compliant 50.51 12/2/2007

A I Asian Equity Fund ANB 39.24 11/28/2007

Asian Equity Index Fund SABB 32.65 12/3/2007

Al Naqaa Asia Growth Fund SFB Shariah-Compliant 32.51 12/1/2007

Asia Equity Fund SHB 30.73 11/28/2007

Far Eastern Equity Fund Samba 28.2 11/28/2007

Amanah Asia Pacific Fund SABB Shariah-Compliant 21.4 11/27/2007

Al Ahli Asia Pacific Trading Equity Al Ahli Shariah-Compliant 15.43 12/3/2007

MSCI Far East Free MSCI Barra Bench mark Index 2.25 11/30/2007

Japan Equity Fund Samba -0.08 11/28/2007

Japan Equity Index Fund SABB -1.29 12/3/2007

A I Japanese Equity Fund ANB -3.57 11/28/2007

Japan Equity Fund SHB -4.58 11/28/2007

Al Mashareq Japanese Equity Al Jazirah Shariah-Compliant -5.23 11/27/2007

Japanese Stock Fund (1) Riyad -7.93 11/30/2007

Asian Equity Markets - 1

(1) Priced in ¥

Asian Equity Markets - 2

Statistics  

Number of Funds 17

Shariah-compliant Funds 5

Conventional Funds 12

Mean return YTD % 23.39

Standard Deviation % 23.83

Range (highest return - lowest return) % 66.85

Segmental Analysis  

Shariah-compliant Funds average return YTD % 22.92

Conventional Funds average return YTD % 23.59

Difference -0.66

Arab Equity Markets - 1

Fund Name Fund Manager Category YTD Return % Evaluation Date

Al Musahem GCC Fund Samba 66.43 11/28/2007

Al Raed GCC Fund Samba Shariah-Compliant 60.27 11/28/2007

Amanah GCC Equity Fund SABB Shariah-Compliant 55.46 11/29/2007

Al Rajhi GCC Equity Fund Al Rajhi Shariah-Compliant 46.51 12/2/2007

Gulf Industrial Companies Fund SAIB Shariah-Compliant 45.35 12/1/2007

Al Danah GCC Equity Trading Fund SFB Shariah-Compliant 45.28 11/28/2007

GCC Financial Institutions Equity Fund SHB 37.64 11/28/2007

Al Ahli GCC Trading Equity Fund Al Ahli Shariah-Compliant 36.79 12/3/2007

Riyadh Gulf Fund Riyad Shariah-Compliant 33.98 11/29/2007

MSCI Arabian Markets Ex. SA MSCI Barra Bench mark Index 33.84 11/30/2007

Gulf Companies Fund SAIB Shariah-Compliant 31.57 12/1/2007

GCC Equity Fund SAIB 27.22 12/1/2007

Al Seef Fund (1) Albilad Shariah-Compliant 25.78 11/29/2007

Al Rajhi Egyptian Equity Fund Al Rajhi Shariah-Compliant 8.38 12/2/2007

(1) Priced in KD

Statistics  

Number of Funds 13

Shariah-compliant Funds 10

Conventional Funds 3

Mean return YTD % 40.05

Standard Deviation % 15.64

Range (highest return - lowest return) % 58.05

Segmental Analysis  

Shariah-compliant Funds average return YTD % 38.94

Conventional Funds average return YTD % 43.76

Difference -4.83

Arab Equity Markets - 2

Top & Bottom 5

Fund Name Markets Fund Manager Category YTD Return %

Al Musahem GCC Fund Arab Samba 66.43

Alfursan BRICs Equity Trading Fund Global SFB Shariah-compliant 60.92

Al Raed GCC Fund Arab Samba Shariah-compliant 60.27

South East Asia Fund Asian Riyad 58.92

CHINDIA Free Style Fund Asian SABB 57.25

Top 5 best performing funds

Bottom 5 worst performing funds

Fund Name Markets Fund Manager Category YTD Return %

Japanese Stock Fund Asian Riyad   -7.93

Al Mashareq Japanese Equity Asian Al Jazirah Shariah-compliant -5.23

US Aggressive Fund American Samba   -4.98

Japan Equity Fund Asian SHB   -4.58

A I Japanese Equity Fund Asian ANB   -3.57

Best Fund Managers

Market 1st Place (5 marks) 2nd Place (4 marks) 3rd Place (3 marks) 4th Place (2 marks) 5th Place (1 mark)

Saudi SABB Al Rajhi SABB Samba SABB

Global SFB Riyad Al Ahli Albilad Riyad

American Al Ahli SHB ANB Riyad SAIB

European Al Ahli ANB SABB Al Jazirah SABB

Asian Riyad SABB Samba Al Rajhi ANB

Arab Samba Samba SABB Al Rajhi SAIB

Over all ranking First Place Second Place Third Place Fourth Place Fifth Place

SABB (20 points) Samba (15 points) Al Ahli (13 points) Riyad (12 points) Al Rajhi/ANB (8 points)

Note: The more funds the manager has the better chance to have a high ranking.

Risk & Return

Market Bench Mark Average Fund Return Sample Stand. Dev. Sample RangeArab 33.84 40.05 15.64 58.05Saudi 19.3 25.99 13.38 50.62Asian 2.25 23.39 23.83 66.85Global 8.58 14.69 12.4 58.98European 17.78 14.69 5.41 16.1American 4.43 4.23 4.43 16.75

Average Returns

MarketShariah-Compliant

Funds Return %Conventional

Funds Return %Saudi 26.82 25.16Global 15.81 12.86American 11.77 3.28European 11.76 8.66Asian 22.92 23.59Arab 38.94 43.76

Overall 21.34 19.55

Thank you.Majid Dajanimajiddajani@yahoo.com