It’s important for investors to be aware of the management and operational fees tied to their portfolio. Whether you manage it yourself, work with a financial advisor, or use an automated investment platform, these fees—both direct and indirect—can impact your returns.
First: Malaa's Management Fees
When opening an investment account, clients agree to Malaa’s management fees, which are outlined in the account opening agreements. These fees are detailed in the final section of the agreement and also displayed on the portfolio selection page under “Portfolio Historical Information.” Malaa’s management fee is 0.35% annually of the total portfolio value.
You can access your investment account agreement anytime by navigating to Settings > Agreements & Disclosures > Investment Account Agreement to review it again.
Second: How Management Fees Are Calculated
Fee Structure: These are annual fees based on the total value of your portfolio. This means the fees are calculated based on the portfolio's value at the time of calculation, whether it has increased or decreased due to daily market fluctuations.
To ensure fair calculation of the annual fees, the annual fee is converted into a daily fee. The portfolio’s value is calculated at market close to avoid daily fluctuations from affecting the fee calculation.
To convert the annual fee (0.35%) into a daily fee, we divide the annual fee by the number of days in the year (365) or (366) in a leap year, resulting in a daily rate of 0.00096%.
At the close of each trading day, we multiply this daily rate of 0.00096% by the portfolio’s total value at that time. The resulting amount is recorded in the system as the fee due for that day.
Example:
If the portfolio value at the close of trading on 01/01/2025 is 100,000 SAR, we multiply this value by the daily rate (100,000 * 0.00096% = 0.96 SAR). This amount is recorded as the fee for that day, and the daily fees are accumulated and saved in the system.
Another Example:
If the client deposited 1,000,000 SAR into their portfolio, and the portfolio value at the close of trading on 01/01/2025 is 1,001,000 SAR (an increase of 1,000 SAR in capital gains), the management fee will be calculated by multiplying 1,001,000 by the daily rate (1,001,000 * 0.00096% = 9.61 SAR). This amount represents the fee for that day.
Another Example:
If the client withdraws all funds from their portfolio, and the portfolio value is 0 SAR at the close of trading on 01/01/2025, the system will calculate the due fee by multiplying the portfolio value by the daily rate (0 * 0.00096% = 0 SAR). Malaa’s system calculates fees daily in this manner for each portfolio separately (each portfolio is calculated individually).
Third: Fees of the Funds We Invest In
The funds charge their own management fees, which vary from one fund to another.
If you choose a portfolio that includes funds with subscription fees (fees deducted upon deposit), these will be deducted from the deposit before investment orders are placed (based on the procedures of the fund being invested in). The subscription fee is not included in the purchase cost.
This also applies when changing the portfolio type. When transferring from previous portfolios to new ones, a subscription fee will be applied to the value of the portfolio.
The subscription fee is calculated based on the total deposit value as follows: the subscription fee rate for the fund is multiplied by the weight of the fund in the portfolio. For example, if you invest in the newly updated Very High portfolio, and the fund imposing the subscription fee (Al Ahli Saudi Equity Trading Fund) has a weight of 27%, the subscription fee is calculated by multiplying the deposit amount (1,000 SAR) by the fund's weight (27%) and the subscription fee rate for the fund (2%). The calculation would be:
1,000 * 27% * 2% = 5.4 SARThe subscription fees are set by the fund manager, not by Malaa.
Malaa does not charge its own subscription fees.
The funds that impose subscription fees are:
AlAhli Saudi Equity Trading Fund (up to 2%)
AlAhli Small Cap/Mid Cap Equity Fund (up to 2%)
Fourth: Fee Deduction Mechanism
Subscription Fees for Funds: These are directly deducted upon deposit, as mentioned in the third section.
Management Fees: These are deducted when you make a withdrawal. To determine the withdrawal amount, we divide the withdrawal amount by the total portfolio value to find the percentage of the withdrawal in relation to the total portfolio. Then, we multiply this percentage by the total management fee, which will be deducted along with the withdrawal.
For example:
If the client withdraws 1,000 SAR and their portfolio value is 2,000 SAR, we calculate the percentage of the withdrawal: 1,000 / 2,000 = 50%. Then, we multiply this percentage by the management fee, which we assume is 10 SAR: 10 * 50% = 5 SAR. Thus, 5 SAR will be deducted as the management fee along with the withdrawal.