Disclosures from the ten largest funds investing in Saudi stocks revealed that asset managers entered the second quarter of 2026 with portfolios concentrated in a limited number of companies, led by Al Rajhi Bank and Bahri, while their exposure to Saudi Aramco was less widespread despite the company's weight in the market.

The total net assets of the funds and included categories amounted to about 16.74 billion riyals, according to ownership data as of April 1, at the start of the second quarter.

Two stocks account for a fifth of assets

Al Rajhi Bank topped the investments of the ten largest funds, with a value close to SAR 2.4 billion, equivalent to 14.3% of total fund assets, and the stock appeared among the largest holdings in nine out of ten funds.

Bahri came second with an estimated exposure of about SAR 950 million, distributed across eight funds and seven independent strategies. Thus, Al Rajhi Bank and Bahri together account for about 20% of the total assets in the sample, equivalent to one riyal of every five riyals managed by the funds under study.

STC came third with about SAR 744 million, followed by Saudi Aramco with SAR 719 million, Bank AlBilad with SAR 544 million, and AlRajhi Takaful with SAR 532 million. Aldrees, Gas, Ma'aden, and SABIC Agri-Nutrients completed the list of top ten exposures.

Bahri's outperformance over STC and Aramco does not only reflect a large position in a single fund, but the breadth of its presence among multiple managers. This elevates the stock's significance from an isolated bet to a position that enjoys relatively wide acceptance in the local asset management industry.

Largest 10 local funds-02

Banks lead sector exposure

Bank stocks amounted to about SAR 3.25 billion, equivalent to approximately 31.2% of the value of the largest disclosed fund holdings, driven mainly by Al Rajhi Bank, followed by Bank AlBilad and Alinma Bank.

However, the banking bet was not evenly distributed across the sector, but concentrated mainly in Al Rajhi Bank, then Bank AlBilad and Alinma Bank. This indicates that the difference between portfolios lies at the level of bank selection, not only the decision to be exposed to the banking sector. But the disclosures alone do not reveal the criteria on which each manager based his choices.

The energy sector ranked second with an estimated exposure of about SAR 1.67 billion, through positions in Bahri and Saudi Aramco, and the sector edged ahead of basic materials which had an exposure value of about SAR 1.62 billion, while telecoms ranked fourth with about SAR 1.13 billion.

This shows that funds' exposure to energy does not depend on Aramco alone, as Bahri accounted for about 57% of the value of disclosed positions in the sector, compared to about 43% for Aramco.

Banks account for a third of fund holdings-02

Different objectives and policies for funds

The largest funds by net assets include: Al Rajhi Flexible Saudi Equity Fund, Al Rajhi Saudi Equity Fund, Al Rajhi Leadership Fund, and Al Rajhi Small and Mid Cap Fund.

Along with Al Awwal Investment Fund for Saudi Companies Shares, Derayah Flexible, AlJazira Saudi Equity Fund, Jadwa Saudi Equity Fund Classes A and B, and Jadwa Saudi Equity Fund II – Class A.

Despite gathering under the umbrella of Saudi stocks, the funds differ in their strategies and the range of companies they invest in. The Al Rajhi Flexible Fund offers an investment scope including Saudi stocks, IPOs, and real estate investment traded funds (REITs), aiming to achieve high capital growth over the medium to long term.

In contrast, Al Rajhi Saudi Equity Fund, AlJazira, Al Awwal Investment, and Jadwa focus on capital growth through Saudi stocks compliant with Sharia controls, while Al Rajhi Leadership and Small and Mid Cap funds reflect more specialized scopes in terms of the size of target companies.

Sun, 19 2026

Fund diversification does not mean risk diversification

The top ten stocks combined accounted for about SAR 7.6 billion, representing 45.4% of total fund assets and approximately 73% of the value of the largest disclosed holdings.

This overlap means that an investor purchasing units in several funds does not ensure actual diversification of return sources. Asset manager names may change, while portfolios remain exposed to the same stocks and sectors, most notably Al Rajhi Bank, Bahri, and STC.

According to portfolio management principles, diversification is measured not only by the number of funds or stocks, but by the degree of correlation between portfolio components. The more the same positions are repeated across funds, the higher the sensitivity of their performance to common factors, and the benefit of distributing money among multiple managers declines.

Moreover, the degree of concentration within a single fund varied significantly, with the top ten positions representing about 79.8% of the assets of Al Rajhi Leadership Fund, compared to 49.7% for Derayah Flexible Fund.

This means that the performance of the first fund depends more on the success of limited choices, while the second distributes its risks over a broader number of positions not visible in the list.

Financial Analysis Unit