It’s important for investors to be aware of the management and operational fees tied to their portfolio. Whether you manage your portfolio 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 investment account opening agreements. These fees are also displayed on the portfolio selection page under “Portfolio Historical Information.”
Malaa charges management fees annually based on the type of portfolio:
Core Portfolios: Up to 0.35% annually of the portfolio’s net value.
Cashback Portfolios for Individual Clients: Exempt from management fees.
Endowment Portfolios: Exempt from management fees.
You can access your investment account agreement anytime through the app by navigating to:
Settings > Investment > Agreements & Disclosures
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 intraday market fluctuations from affecting the fee calculation.
To convert the annual fee of 0.35% into a daily fee, we divide the annual fee by the number of days in the year—365 days, or 366 days in a leap year—resulting in a daily rate of approximately 0.00096%.
At the close of each 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 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 deposits 1,000,000 SAR into their portfolio, and the portfolio value at the close of 01/01/2025 is 1,001,000 SAR, meaning the portfolio has increased by 1,000 SAR in capital gains, the management fee will be calculated as follows:
1,001,000 × 0.00096% = 9.61 SAR
This amount represents the management fee for that day.
Another Example:
If the client withdraws all funds from their portfolio and the portfolio value becomes 0 SAR at the close of 01/01/2025, the system will calculate the fee as follows:
0 × 0.00096% = 0 SAR
Malaa’s system calculates management fees daily in this manner for each portfolio separately.
Third: Fees of the Funds We Invest In
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%
Some funds also 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 fees 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 from one portfolio type to another that includes funds with subscription fees. In this case, the subscription fees will apply to the amount invested in those funds.
The subscription fee is calculated based on the total deposit amount by multiplying the fund’s subscription fee rate by the fund’s weight in the portfolio.
For example:
If you invest 1,000 SAR in the Local Safe Portfolio, and the funds that impose subscription fees represent 20% of the portfolio, with a subscription fee of 2%, the calculation would be: 1,000 × 20% × 2% = 4 SAR
Subscription fees are set by the fund manager, not by Malaa.
Malaa does not charge its own subscription fees.
Fourth: Fee Deduction Mechanism
Subscription Fees for Funds: These are directly deducted from the deposit, as mentioned in the third section.
Management Fees: These are deducted when you make a withdrawal.
To determine the amount of management fees to be deducted, we divide the withdrawal amount by the total portfolio value to find the percentage of the withdrawal in relation to the total portfolio. We then multiply this percentage by the total accrued management fees.
For example:
If the client withdraws 1,000 SAR and their portfolio value is 2,000 SAR, we calculate the withdrawal percentage: 1,000 / 2,000 = 50%
If the accrued management fees are 10 SAR, we multiply: 10 × 50% = 5 SAR
Thus, 5 SAR will be deducted as management fees along with the withdrawal.
For Cashback Portfolios for Individual Clients, Malaa deducts a percentage of the profits of up to 25% of the profits only, and not from the deposited capital.
For example:
If the client deposits 10,000 SAR and the portfolio generates 500 SAR in profits after one full year, the total portfolio value becomes 10,500 SAR.
If the full amount is withdrawn, the profit-sharing amount would be:
500 × 25% = 125 SAR
Therefore, 125 SAR would be deducted from the profits.
Fifth: General Information
The profit-sharing rate for Cashback Portfolios may reach up to 25% of the profits generated by the portfolio.
Bank transfer fees for the SARIE interbank transfer service may apply. However, withdrawals to an IBAN at Arab National Bank (ANB) are not subject to bank transfer fees.
Malaa’s fees are deducted during withdrawal transactions, and Malaa reserves the right to collect the applicable fees on a monthly basis.