RIYADH: Private mutual funds’ assets in Saudi Arabia remained stable in the second quarter of 2022 at SR333.6 billion ($89 billion), as public funds deteriorated in their quarterly performance, according to data released by the Capital Market Authority.
Looking at private funds’ breakdown by the type of investment, the highest contributor, equities, saw an 11.4 percent decline from SR192.0 billion in the first quarter of 2022 to SR170.1 billion in the second quarter. This was countered by slight increases in the value of investments in debt instruments, real estate and venture capital.
Furthermore, the equities in the aggregate value of private funds’ assets decreased by 6.2 percentage points in the transition between the first quarter and the second quarter of 2022, from 51.0 percent to 57.2 percent.
Investment in real estate made up 34.0 percent of private funds’ investments in comparison to 29.6 percent in the last quarter — amounting to SR113.2 billion in the second quarter, a 14.7 percent increase from its SR99.1 billion value in the first quarter of 2022.
Regardless of its quarterly performance, equities investments mainly contributed to the 21.6 percent yearly growth in private funds’ aggregate assets from SR274.5 billion in the same quarter last year.
Moreover, the total number of subscribers in private funds increased by 1,161 to 9,702 over the same period after adding 918 and 522 subscribers in funds dedicated to real estate and private equity, respectively. This is in contrast to debt instruments, which lost 372 subscribers.
The comparable values of Saudi public funds’ assets plummeted another 10.7 percent in the second quarter of 2022 to SR192.5 billion, from SR215.7 billion in the previous quarter.
This comes after a 13.9 percent quarter-on-quarter decrease in its largest investment component, constituting 52.7 percent of the aggregate value of public funds’ assets, called money market instruments.
Money market instruments, which have been on a decline since the third quarter of 2021, went down from SR117.8 billion in the last quarter to SR101.4 billion this quarter.
Moreover, equities and debt instruments saw sharp quarterly declines of 13.6 and 14.2 percent, respectively, making up a smaller, but still significant 26.6 percent of total public funds’ assets when added together.
Debt instruments have seen their second decrease in value in a row, from SR31.4 billion in the months between January and March to SR26.9 billion from April to June 2022.
Although quarterly values of their equity investment went up in the previous quarter from a contraction at the end of 2021, they experienced another plunge in the second quarter of 2022, from SR28.3 billion to SR24.4 billion.
On a yearly basis, the public funds’ aggregate assets fell by 20.3 percent from SR241.6 billion in the second quarter of 2021, also thanks to a 34.6 percent reduction in the value of money market investments from SR155.2 billion last year.
The public mutual funds gained 156,958 subscribers, reaching 665,763 subscribers in the second quarter this year compared to last quarter, its highest quarterly increase since 2005.
The increase is driven by unprecedented growth in the number of subscribers in Saudi Arabia’s two close-ended traded funds, to reach 158,065 from just 17,987 in the first quarter of 2022.
The number of subscribers in public funds saw a big quarterly increase in transition between the third and fourth quarters of 2021 when it grew by 82,581 and was driven almost entirely by the influx of subscribers to the funds investing primarily in real estate investment trusts.