AlSafwa Quarterly Report

FUND OBJECTIVES

The objective of the Fund is to generate medium to long term capital growth, by investing in a Sharia-compliant diversified portfolio of equities, listed and traded on international security exchanges. It is bench-marked to the MSCI Global Index.

FUND INVESTMENT STRATEGY

The principal investment objective of the Fund is to generate medium to long term capital appreciation by investing in a diversified portfolio of equity securities listed & traded on recognized national exchanges world wide, and short term profit bearing Islamic investments, all in strict possible compliance with Sharia laws.

SECTOR COMPOSITION(30/06/2005)

GEOGRAPHICAL DISTRIBUTION(30/06/2005)

FUND'S PERFORMANCE (1999 - 2nd Quarter 2005)

FUND'S PERFORMANCE DATA

NAV Per Share : : US$ 1,070.16

1 Month 0.36 %

3 Month 0.11%

1 Year 4.56%

Since Inception 7.02%

FUTURE EXPECTATIONS

FACTORS IMPACTING PERFORMANCE

The market has rebounded in the 2nd quarter due to earnings expectations, but non-US returns were hurt by a rebound in the US dollar. Oil continued to perform well, but other commodities performed poorly as the market expects softening demand for oil and steel. The Fund’s performance was helped by its exposure to energy and health care and it was hurt by its exposure to materials, industrial and technology.