Total payments made by unit holders/wakifs to the fund manager for investing in the fund. Each unit is treated as an ordinary share in the net assets of the fund.
Investment Fund
Governing Laws
Investment Policies and Practices
The Fund may invest in securities issued by the Fund Manager or any of its affiliates in accordance with the Fund's objectives. Investment of the fund's assets in mutual fund units managed by the fund manager or other fund managers.
The Main Risks of Investing in the Fund
The Fund's investments offer a prudent risk diversification, taking due account of the investment objectives, the investment policy and the General Terms and Conditions. The Risk Management Department provides the Fund Board with periodic reports on the Fund's performance, discussing operational risks, credit risks and risks of violating investment restrictions. The Fund may use derivatives that comply with the guidelines of the Shariah Commission for currency hedging purposes and may not exceed 15% of the net asset value of the Fund.
The investment decisions made by the Fund Manager will be consistent with prudent investment practices that meet the Fund's investment objectives set out in the Fund's Terms and Conditions. Accordingly, these risks are assessed and necessary steps are taken in the interest of the Unitholders/Waqifs in accordance with applicable laws and regulations. Concentration risks: The risk that the Fund's investments are concentrated in certain asset categories, market sectors or limited Shariah-compliant companies or funds that involve the risk of alienation.
Concentration Risks: The risk of the Fund investments being concentrated in certain asset categories, market sectors or limited Shariah-compliant companies or funds which involve the risk of disposing
Issuer Specific Risks: This includes changes in the financial conditions of the issuer/counterparty and changes in management or financial and credit conditions of, or demand on the products or services
Economic Risks: The risk of changes in the economic conditions such as recession, inflation, oil prices, which may negatively affect the value of the invested shares, and thus; adversely impacting the
Currency Risks: A difference in the exchange rate can lead to losses when investing in a currency other than that of the Fund, which may adversely impact the Fund performance and its Unit price
Financing Risks: In case of obtaining fund’s financing for investment purposes, the Fund may not be able to repay its obligations on time for reasons beyond the control of the Fund Manager may result in
Risks of Investment in Other Funds: The other Investment Funds in which the Fund invests may be exposed to risks similar to those set out in this Paragraph, which may adversely affect the Fund
Risks Associated with Complying with Shariah Guidelines: The Shariah Committee of the fund is the party deciding whether or not the fund’s investments comply with its guidelines; however, there is
Risks of Dependence on the Fund Manager’s Personnel: The Fund performance depends largely on the capabilities and skills of the Fund Manager’s employees, which may adversely affect the Fund
Risk of Natural Disasters: Natural disasters, which are beyond the control, such as earthquakes, floods, and other climate changes which cause significant damage to property and assets and may
Asset Allocation Risks: Some of the fund manager’s decisions related to asset allocation with regard to overweight or underweight the asset’s of high price volatility which will adversely impact the Fund
Inflation Risk: The risks associated with the possibility that inflation will cause a decline in the asset's value or investment returns, which will adversely affect the Fund's performance and the unit price.
Inflation Risks: The risks related to the possibility that inflation will lead to a decrease in the asset’s value or investments’ returns, which will adversely impact the Fund performance and unit Price
Investment in IPO Funds Risks: The risk of investing in start-ups companies which do not have an operating history that would allow the Fund Manager to properly valuate the company’s performance
Rating Downgrade Risks: Any change relating to credit rating downgrade, by a credit rating agency, of a security/issuer of fixed income instruments which constitute a part of the Fund, or the counterparty
Risks of Dependence on the Internal Rating of Fixed Income Instruments: The risks related to inv sting in Fixed Income Instruments that are not rated by any credit rating agency; and where the fund
Risks of Call Options and Reinvestment: Some asset classes including Fixed Income Instruments may carry a call option that gives the issuers the right to call Fixed Income Instruments before maturity
Risks of Agricultural Investments: Agricultural Investments entail number of risks associated to uncertainties relating to weather, yields, prices, government policies and global markets which may
Risks of Infrastructure Investments: Infrastructure Investments can expose investors to a number of key risks such as development risks: they are related to uncertainties and obstacles endured during
The government usually raises money for such investments from the capital market; but if the government credit rating is low, it becomes difficult to obtain adequate financing or rather; it will be achieved in adverse conditions. Therefore, the above-mentioned risks will have a negative impact on the fund's investments, results and share price. There are countless market risk factors that can trigger an imbalance in supply and demand.
Risks of Real Estate Investments: Real estate markets are characterized by up and down market cycles. There are myriad market risk factors that can trigger an imbalance in the supply and demand
Risks of real estate investments: Real estate markets are characterized by up and down market cycles.
Risks of Investing in Gold: Investments in the gold sector is considered of a high-risk as it is negatively affected by the change in the prices of its production and exploration and the political, seasonal,
Risks of Investing in Financial Derivatives: Investing in financial derivatives are considered of a high risk since most of the derivatives are traded through over-the-counter (OTC) market which means that
Risks of investing in Ijara (leasing): Investing in Ijarah is subject to fluctuations in the dynamic economic cycle, which affects the ability of Ijara programs to lease their assets and generate income in a timely manner. Therefore, this period will witness a decrease in profits and demand for trade finance activities, which will be reflected in a decrease in fund performance and smaller investment opportunities. Risks of Investing in Rights Issuance: A Fund's investment in rights-traded or equity ownership in a company offering its preferred rights may adversely affect the Fund.
In addition to credit risks, which are the risks of non-payment of scheduled interest or principal payments that affect debt investments. Equipment lessors also face difficulties in finding suitable investment opportunities in the market during periods of economic recession, when demand for equipment declines, as these periods adversely affect the terms of the Ijara (leasing) and schedule, remarketing and leasing activities they carry out investment advisors. The economic recession also leads to a decrease in capital spending by some companies and an increase in the supply of used equipment, in addition to a decrease in prices and rents due to excess inventory.
Risks of Zakat and Tax: Waqf Investment Fund returns are not subject to Zakat or tax; however, the Zakat, Tax and Customs Authority or any other Authority may impose taxes on Waqf investment funds
In addition, originator risk prevails as such instruments are originated by third-party originators of transactions, while due diligence has been performed on such originators of transactions, there is no guarantee of the performance of such originators or their capabilities and competencies, and therefore transactions may be subject to performance risk. If the borrower defaults or defaults, this can affect the total return to the lender. Changes in interest rates will affect the amount of interest a borrower pays on a variable rate (variable) loan, meaning they move in step with wider fluctuations in interest rates.
Mechanism for Assessing Risks
Because trade finance credits and debt may be investments in non-investment grade borrowers, the risk of default may be greater.
Targeted Class for Investing in the Fund
Investment Restrictions / Limitations
Currency
Fees, Charges and Expenses
Custody Fees: The Custodian shall receive an annual custody fee of 0.02% (2 base points) of the fund’s Net Asset Value under custody calculated on each Valuation Day and deducted monthly
Remuneration of the Fund’s Board: The Independent Fund Board Members shall receive collectively a maximum amount of SAR 4,000 for each meeting they attends; as it is expected that
Auditor’s Fees: SAR 35,000 annually
Shariah Audit Fee: SAR 27,000 annually
Capital Market Authority Fees: SAR 7,500 annually
Tadawul Publishing Fees: SAR 5,000 annually
Data Processing and Operational Expenses: such expenses include administrative fees related to the fund and the programs used in data processing and shall be charged to the fund on a daily
Fees and Other Expenses will not exceed 1.5% of the fund's net asset value and the Fund Manager will conduct a quarterly (every three months) review of all expenses charged to the Fund. Other expenses will not exceed 1.5% of the fund's net asset value and the Fund Manager will conduct a quarterly (every three months) review of all expenses charged to the Fund. Other expenses will not exceed 1.5% of the fund's net asset value and the Fund Manager will conduct a quarterly (every three months) review of all expenses charged to the Fund.
Valuation and Pricing
Hypothetical example illustrating all fees, charges paid from the Fund's Assets or Unitholders/Waqifs based on the currency of the fund. The fund operator must record every case where an asset of the fund is incorrectly valued or the price of a unit is incorrectly calculated. The fund manager must provide a summary of all valuation and pricing errors in his reports to the Authority in accordance with Article (77) of the Investment Fund Regulations.
Dealings
The Fund Manager cannot accommodate redemption requests from Unitholders/Waqifs due to the Waqft nature of the fund. If the Manager reasonably believes that suspension is in the interest of the Unitholders/Waqifs; The Fund does not accept redemption requests due to the Waqf nature of the Fund.
Distribution Policy
Provisions governing the transfer of ownership of units to other unit holders/wakif This does not apply due to the waqf nature of the fund. The minimum amount that the fund manager intends to collect and the actions to be taken if this minimum is not reached. If the minimum amount is not collected during the initial offer period, the fund manager has to return the entire subscription amounts to the unit holders/ waqifs with all the returns generated from the investments without any deduction.
Reporting to Unitholders/Waqifs
Unitholders/Waqifs Register
The Unitholders/Waqifs can obtain a summary of the register (which will include all the information relating only to the Unitholder/Waqif) in the manner set out in the Fund's Terms and Conditions.
Meeting of Unitholders/Waqifs
Rights of the Unitholders/Waqifs
Unitholders/Waqifs Liability
If the Unitholder/Waqif is subject to the laws of any jurisdiction other than the Kingdom of Saudi Arabia, the Unitholder/Waqif will be subject to those laws without creating any obligation to the Fund or the Fund Manager.
Units Characteristics
Changes in the Fund’s Terms and Conditions
The Fund Manager shall send a notice to the Unitholders/Waqifs and publish the details of the fundamental change on its website and on any other website accessible to the public as per the controls laid down by the Authority (10) days before the change takes effect . The Fund Manager shall send a notice to the CMA and Unitholders/Waqifs and publish the details of the non-fundamental change on its website and on any other website accessible to the public as per the controls prescribed by the Authority (10) days before the change takes effect. Details of all fundamental changes and non-fundamental changes must be included in the next fund report prepared by the fund manager pursuant to Article (76) of the Investment Fund Regulations.
Termination and Liquidation of the Fund
According to Article (8-2) of the Instructions for the Approval of the Establishment of Waqf Investment Funds issued by the General Authority for AWQAF, the fund will cease to operate after obtaining the necessary legal permits, including the approval of the General Authority for AWQAF. According to Article (8-3) of the Instructions for the Approval of the Establishment of Waqf Investment Funds issued by the General Authority for AWQAF, the funds of the fund are; after termination, it will be transferred as provided in the terms and conditions of the fund and, in the event that transfer was not possible, the General Authority for AWQAF; based on his assessment he can transfer the funds to another beneficiary without any conflict with the condition of Waqif. If the Fund is terminated, the Fund Manager will not charge any fees deducted from the Fund's assets.
Fund manager
Summary of the fund manager's financial information for the past fiscal year (in thousands of Saudi Riyals). Ensuring that the terms of the fund are accurate, complete, correct and not misleading. The fund manager must inform the authority about the results of the meeting of property unit holders/wakifs within (2) days from the date of its convening.
Fund Operator
Custodian
The remuneration of the sub-custodian of the fund is paid by the custodian from its own resources. The revocation or suspension by the Authority of the relevant authorization of the depositary to carry out custody activities; A request from the custodian to the Authority to revoke its license to carry out custodial activities;
Fund Board
Confirmation of all important contracts, reports and decisions of the Fund to which the Fund is a party. Ensuring that the fund manager fulfills its obligations in the best interest of the unit holders/wakifs in accordance with the investment fund terms and regulations. Keeping minutes of the meetings, which contain all the deliberations and facts of the meetings and the decisions taken by the board of directors of the fund.
Shariah Committee
Total Riba deposits exceed (33%) of the market value of the company's shares or total assets. It is not permitted to invest in shares in companies whose total Riba deposits exceed (33%) of the company's total assets. The fund manager will provide the fund's investors with the accounting method for the market value of the companies' shares and income that do not comply with Shariah; on request and free of charge.
Investment Advisor Non-applicable
Investment sukuk is approved by the Shariah Supervisory Committee after being approved by the Shariah Committee or whoever represents it. The Fund Manager must identify non-Shariah compliant income and deposit it in a separate account to be spent on charity. The Fund may invest in Sukuk, Murabaha transactions, financial certificates and investment funds that conduct their investments in accordance with Sharia guidelines.
Distributor
In the event that one of the companies owned by the fund does not comply with the Shariah guidelines, it will be sold within a period of not more than (90) days from the date of review. 26) Investment Advisor Not applicable.
Auditor
The auditor's responsibilities also include performing procedures for obtaining evidence to support the amounts and disclosures in the financial statements. The fund's board determines that the auditor does not have sufficient qualifications and experience to perform satisfactory audit functions, or that the replacement of the auditor is in the best interest of the unitholders/waqifs;. The Authority, in its absolute discretion, directs the fund manager to replace the appointed auditor in relation to the fund.
Fund’s Assets
In addition, the accountant assesses the appropriateness of established accounting policies and the reasonableness of accounting estimates, as well as the overall presentation of the financial statements. There are outstanding and material allegations of professional misconduct related to audit functions by the auditor;
Complaints Procedures
Additional information
The Fund's business and the Investments of its participants are managed with the highest degree of confidentiality at all times. This does not limit the right of the Fund's regulatory authority (CMA and General Authority for AWQAF) to access the Fund's records for legal oversight purposes. Upon the Unitholder/Waqif's death or loss of eligibility, all his powers and rights will be transferred to the Fund Board in accordance with section (4-1) paragraph (7) of the Instructions for Approval on the Establishment of Waqf Investment Funds issued by the General Authority for AWQAF; and therefore the transfer of the unit's ownership will be carried out as set out in the Terms and Conditions.
Unitholders/Waqifs Declaration
