Bahana Liquid USD

Positive Momentum: We’re pleased to report a significant increase in performance for Bahana Liquid USD (“BLU”) in the last quarter in 2023. BLU has delivered a net return of over 2% net p.a., exceeding expectations in the current market environment.

The rise of bank rates during the 4th quarter in 2023 were the main driver of a higher return for BLU as fixed deposit is our majority underlying.

Bahana Global Healthcare Sharia

Global Equities rebounded sharply in Q4-2023 after inflation eased, with US market posting double digit gains. The US Federal Reserve’s (The Fed) left rates unchanged throughout the quarter, raising hopes of rate cut from the Fed moving forwards.

Within the healthcare sector, we oversee several positive pre-announcements from companies on fourth-quarter earnings. Healthcare companies were also quite active in acquiring competitors in Q4-23 to increase their scale, such as Roche announcing the acquisition of Carmot Therapeutics for USD 2.7 Billion. Additionally, one of our top 10 holding Eli Lily also announced a new digital platform “LillyDirect’ which help patients access their obesity and diabetes medication more easily.

Bahana Global Healthcare Sharia (“BGHS”) has generated a 4.48% return in Q4-23. The portfolio’s equity allocation is invested in a systematic multi-factor strategy that offers a blended exposure to quality, value and momentum style factors in both developed and emerging markets.

Our largest contributor for Q4-23 came from biotechnology, pharmaceuticals, and healthcare equipment. In biotechnology, an overweight position in Vertex Pharmaceuticals and underweight in Biogen helped boost the fund performance. Meanwhile, in pharmaceuticals, our main contributor came from underweight position in Pfizer and Bristol Myers Squibb and in healthcare equipment came from overweight position in IDEXX Lab and Medtronic.

Our largest detractors for Q4-23 came from healthcare providers and life sciences sectors. In healthcare providers we had overweight position in Sanofi and Align Technology while also underweight in DexCom. Meanwhile, in life sciences sectors, the biggest detractor came from overweight position to West Pharmaceutical Services and WuXi AppTec.

Bahana US Opportunity Sharia Equity

Both US equities and bonds continued their upward momentum in December as the Fed showed a more dovish tone. Prospects of interest rate cuts in 2024 has spurred investor demand. This has helped Bahana US Opportunities Sharia Equity to rallied 7.30% in 4Q23.

As of December 2023, our portfolio composition were divided into 3 main sectors: technology, consumer, and healthcare. Our largest contributor on individual names that lead our performances are Booking Holdings, Keysight Technologies, Home Depot, Trex Companies, and Trane Technologies. The key driver for most of these names are due to strong financial result over improved economic sentiment.

Meanwhile, our detractors on individual names that lag our performances are from Synopsys, Procter & Gamble, Microsoft, Equinix, and Nike.

The economic outlook in 2024 is improving as the probability of US recession keep decreasing, while the Fed also very likely to pivot and lower the rate this year.