The Fixed Income Fund of Bahrain’s Securities & Investment Company (Sico) delivered a return of 8.7 per cent compared with 6.9 per cent by its benchmark, the Barclays Emerging Markets GCC Bond Index in its first full year of operations.

Since inception, the return has been 7.8 per cent, outperforming the index by 1.4 per cent net of fees. The Fund paid its first dividend in 2014 at $2.25 per unit.

Launched in April 2013 as the first of its kind to be managed by a Bahrain-based bank, the Sico Fixed Income Fund actively invests in government and corporate fixed income, sukuk, repo, money market instruments, and other fixed income-related instruments. Its primary objective is to generate income and seek capital appreciation over the medium- to long-term.

Although registered as a conventional fund, Sharia-compliant holdings in the form of sukuk comprised 38 per cent of the portfolio at the end of 2014. The Sharia-compliant mandates managed by Sico on a discretionary basis have also outperformed their benchmarks.

During the year, Sico received approval from the Central Bank of Bahrain for the Fund to launch a new ‘C’ share class to cater for smaller ticket sizes. The new share class has a minimum subscription of $10,000 for individual and institutional investors, compared with the previous minimum ticket size of $100,000.

Sico’s chief executive officer  Najla M Al Shirawi said: “Our prudent investment style has enabled us to deliver another strong performance for our clients in 2014. Sico’s success stems from its disciplined investment strategy, conservative approach, and the quality of its comprehensive research capability.”

“These differentiating factors have supported the development of Sico into a leading and highly-respected institutionally-focused GCC and Mena public markets asset manager, providing investors with stable long-term returns that have consistently outperformed benchmarks and peers.”

Ali Marshad, head of Fixed Income at Sico said: “The fund’s performance is mainly attributable to our Bahrain-based exposure; as well as outside the GCC region in Turkey, which posted an encouraging performance during 2014. This was a challenging year for the fixed income market, with volatility intensifying during the last two months.”

“Sico Fixed Income Fund has successfully navigated the ongoing volatile investment environment. Going forward, we will be looking to add floating rate bonds to our exposure; and capitalise on declining oil prices by taking exposures in those regions which are net beneficiaries,” he added. – TradeArabia News Service