Investment Philosophy in Different Asset Classes

Jun 19, 2014
 
 
 

 

KFUPM Endowment is structured using a combination of global research, informed market judgment and a careful selection of best fund managers in each market where our investments team decides to take a position. Because investment management involves as much art as science, qualitative considerations play an extremely important role in asset allocation decisions. Statistical techniques are combined with expected returns, variances, and covariances of investment assets to estimate expected risk and return profiles of various asset allocation alternatives. The definition of an asset class is quite subjective, requiring precise distinctions where none exist. In spite of the operational challenges KFUPM Endowment allocates its investments over following Shariah compliant asset classes:

  •          Private Equity
  •          Real Estate
  •          Money Market
  •          Fixed Income
  •          Regional & International Equity

KFUPM Endowment is dramatically reducing dependence on domestic oil based market by reallocating assets to developed and emerging markets based on their return potential and diversifying power. Today’s actual portfolio has significantly higher expected returns and lower volatility than the 2007 portfolio.