Al Rajhi Monthly Distribution Fund: Comprehensive Analysis and Overview

The Al Rajhi Monthly Distribution Fund is a multi-asset investment fund managed by Al Rajhi Financial, primarily aimed at distributing cash dividends to investors on a monthly basis. This fund is the first of its kind in the Saudi market that focuses on distributing regular monthly income through investment in a diversified portfolio of Sharia-compliant financial assets. The fund is open for public subscription, allowing any investor registered in the trading system to participate in its units. The fund's strategy is designed to achieve regular distributions by investing in a wide range of assets expected to generate periodic cash flows, such as dividend-paying stocks, REITs, sukuk, bonds, and money market instruments. The fund is supervised by a Sharia oversight committee that ensures its compliance with Islamic standards, and the fund manager is keen to update investors regularly on the fund's performance and achieved monthly distributions.

Diversification is the cornerstone of the Al Rajhi Monthly Distribution Fund's strategy. Instead of focusing on a single asset class, the fund relies on distributing investments across several main categories: listed stocks in the Saudi market, ETFs, REITs, debt instruments, and short-term cash instruments. This diversification aims to reduce risks arising from market fluctuations or poor performance in a specific sector; if one category underperforms, another may compensate for part of the returns. Additionally, asset selection is based on precise Sharia and financial criteria, focusing on companies and funds that achieve regular and robust distributions. Thus, the fund seeks to achieve stability in the monthly income distributed to investors while providing relative protection against sharp fluctuations in financial markets.

The Al Rajhi Monthly Distribution Fund strictly adheres to Islamic Sharia guidelines, with investment assets selected based on specific criteria overseen by an independent Sharia oversight committee. This committee reviews and approves all investments to ensure they do not violate Sharia rulings, including avoiding companies or financial instruments that deal with usury or prohibited activities. Periodic reviews of the investment portfolio are conducted to ensure ongoing compliance with Sharia. This commitment provides investors with reassurance that their returns are derived from legitimate sources aligned with Islamic values, enhancing the confidence of a wide range of investors looking to invest according to Sharia principles.

The Al Rajhi Monthly Distribution Fund is distinguished by offering targeted monthly cash distributions, aiming to achieve an annual return exceeding 5% of the investment unit value, which equates to approximately a monthly distribution of 0.4% per unit. These distributions depend on the actual performance of the investment assets included in the fund's portfolio, such as stock dividends, sukuk and bond yields, and rental income from REITs. It is important to note that monthly distributions are not guaranteed and are subject to market fluctuations and asset performance. The fund manager announces the actual distribution values periodically, emphasizing the importance of monitoring the periodic newsletters and performance reports issued by Al Rajhi Financial. The fund allows investors to benefit from a regular cash flow, making it suitable for categories seeking stable income, such as retirees or those preferring periodic liquidity.

The subscription for the Al Rajhi Monthly Distribution Fund opened following the approval of the Saudi Capital Market Authority in August 2022, with fund units made available for public subscription through Al Rajhi Financial's official channels. During the initial offering period, new subscribers were exempted from the subscription fee, which is typically 1% of the subscription value. Subscription is available to any investor registered in the trading system, requiring the completion of a subscription form and specifying the number of units desired. The fund also allows for the redemption of units (selling them back to the fund) under the terms and conditions specified in the subscription brochure, providing a degree of flexibility for investors. It is always advisable to review the latest brochures and terms from Al Rajhi Financial's official sources before making any subscription or redemption decisions.

The portfolio of the Al Rajhi Monthly Distribution Fund includes a variety of income-generating financial instruments, including: 1) Dividend-Paying Listed Stocks: Such as shares of major companies in the Saudi market with a stable dividend history. 2) Real Estate Investment Trusts (REITs): That generate returns from property rents and redistribute them to investors. 3) Exchange-Traded Funds (ETFs): That provide additional diversification across selected sectors. 4) Debt Instruments and Sukuk: Such as government or corporate bonds, and sukuk with fixed returns and relatively low risks. 5) Short-Term Money Market Instruments: Such as short-term sukuk and government papers, which provide high liquidity and immediate returns. The portfolio components are carefully selected by the fund manager, considering Sharia compliance and monthly return objectives.

Due to the recent establishment of the Al Rajhi Monthly Distribution Fund, detailed financial data such as net asset value (NAV) or actual distribution ratios per unit are not available until the end of 2025. However, the subscription brochure outlines the targeted annual performance objectives (over 5%). The fund's actual financial performance depends on the investment results in various assets, which change according to market conditions. Investors are advised to monitor the periodic reports issued by Al Rajhi Financial regarding the fund's performance, which typically include net asset value, achieved monthly distributions, and portfolio development. These reports help create an accurate picture of the fund's goal achievement and sustainability of its distributions, especially amid changing economic conditions.

The fees associated with the Al Rajhi Monthly Distribution Fund include both subscription fees and annual management fees. During the initial offering period, new subscribers were exempt from the 1% subscription fee. After the exemption period, subscription fees apply as usual according to the terms announced in the fund brochure. Additionally, there is an annual management fee deducted from the net asset value, allocated to cover the costs of managing the fund by Al Rajhi Financial. The management fee percentage has not yet been disclosed publicly, but it is typically expected to range between 1% and 2% annually in similar funds. Investors are advised to review the fund's terms and conditions brochure to understand all potential fees before subscribing.

The Al Rajhi Monthly Distribution Fund competes with several income and distribution funds in the Saudi market, notably real estate investment trusts (REITs) such as the "Al Ahli REIT Fund" and the "Jadwa REIT Fund." However, what distinguishes the Al Rajhi Fund is its multi-asset nature, as it does not limit itself to real estate or stocks but combines several financial instruments. This diversity grants it flexibility in risk management and achieving regular returns. On the other hand, there are funds specialized solely in stocks or fixed-income instruments, which are often more volatile or yield less than diversified funds. Additionally, some banking products offer fixed-return deposits, but they often lack the diversification flexibility or Sharia compliance in the same manner. Thus, the Al Rajhi Fund is considered a balanced option within the investment fund market in the Kingdom.

The Al Rajhi Monthly Distribution Fund may include shares from cement sector companies such as Hail Cement Company (stock symbol: 3001), which is among the dividend-paying stocks listed in the Saudi market. Investing in such companies allows the fund to achieve regular cash flows from stock dividends, especially with the growth of the construction sector and major projects in the Kingdom. Interested parties can view the Hail Cement Company stock page via the following link: /stocks/3001/. It is important to note that the fund is not limited to a specific sector but includes stocks from various sectors based on dividend distribution opportunities and return stability, enhancing the fund's ability to achieve targeted monthly distributions.

The Al Rajhi Monthly Distribution Fund targets investors seeking regular and stable cash income, such as retirees or those looking to enhance monthly liquidity. The fund is also suitable for conservative or moderate-risk investors, thanks to its asset diversification and periodic income distribution strategy. However, it should be noted that all investments carry risks, including stock and bond price fluctuations, changes in interest rates, or economic challenges that may affect asset returns. Although the fund aims to reduce risks through diversification, monthly distributions are not guaranteed and are subject to market developments. Therefore, it is essential to study the fund's brochure and assess individual risks before making any investment decisions.

In January 2026, economic media outlets, such as Argaam, reported on the continued presence of the Al Rajhi Monthly Distribution Fund as a renewable investment product in the Saudi market, confirming its target of distributing annual returns exceeding 5% under optimal conditions. Investors were also reminded that unit subscriptions have been available since August 2022, with Al Rajhi Financial continuing to issue periodic reports on the fund's performance. As of now, detailed financial data or published annual reports for the fund have not been released until the end of 2025, but performance and distribution reports are expected to be published in the coming two years. It is advisable to follow the official Al Rajhi Financial website and economic news sources for the latest updates and official reports related to the fund.

Investors wishing to subscribe to the Al Rajhi Monthly Distribution Fund can submit their applications through Al Rajhi Bank branches or through the designated electronic platforms provided by Al Rajhi Financial. It is required that the investor is registered in the Saudi investment account management system (Edaa) and completes a subscription form specifying the number of units to be purchased. The fund also allows for the redemption of units (selling them back to the fund) according to the specified conditions, providing flexibility for investors in managing their investments according to their financial needs. To review the subscription and redemption requirements, it is essential to consult the official fund brochure or contact Al Rajhi Financial representatives.

Every investor in the Al Rajhi Monthly Distribution Fund should monitor the periodic reports issued by Al Rajhi Financial regarding the fund's performance, including net asset value, distribution ratios, and portfolio development. It is also advisable to regularly review the terms and conditions, especially in the event of changes in investment policy or fees. Given the changing conditions of financial markets and the diversity of risks, it is important to consult a licensed financial advisor before making any investment decision to ensure that the investment aligns with personal financial goals and acceptable risk levels. The SIGMIX platform provides analytical and educational content that helps investors understand available investment options, consistently emphasizing the importance of verifying information and seeking independent professional advice.