"Alkhabeer Financial Company announced the results of the meeting of the unit holders of the 'Alkhabeer Growth and Income Fund', where a participation rate of 39.937% approved the decision to delist the fund as a closed-end investment fund and transition it to a public open-end investment fund. According to the timeline, trading of the units in the financial market will be suspended starting from June 18, 2026, with the final delisting date set for June 25, 2026, urging unit holders to open investment accounts with the company to facilitate future transactions."

This unique structural transition sparked an analytical discussion among students of Al-Yamamah University, to dissect the dimensions of the decision from the perspective of pricing efficiency, liquidity, and the implications of the transition on the gains of unit holders.

Pricing Fairness and Management Quality

Student @Shahad Al-Muhaysin opened the analysis with a reading on the philosophy of the transition, stating: "I believe the most important point in this decision is that the company chose to move from a model based on market price to a model directly based on Net Asset Value (NAV). In closed-end funds, the fund sometimes trades at a discount or premium to its true value, so transitioning to an open-end fund may be fairer for investors in terms of pricing, as subscription and redemption processes will be linked to the actual asset value. However, conversely, the investor will lose the advantage of immediate buying and selling through the market screen, and transactions will be tied to the fund's procedures and specified redemption dates. In my opinion, the success of this step ultimately depends on the fund manager's ability to achieve good returns post-transition; because the type of fund is important, but the quality of investment management remains the most critical factor in the long run".

Addressing Price Gaps and Trading Flexibility

On her part, student Ghadah Alwallan@Ghadah Alwallan highlighted the dimensions of fair asset valuation, stating: "What stands out to me is that transitioning to an open-end fund may not just be a routine organizational change, but may reflect a genuine desire to address one of the common challenges in closed-end funds, which is that units sometimes trade at a discount to the Net Asset Value (NAV); meaning that the market price of the unit may be lower than the actual value of the assets held by the fund. Therefore, this transition may help bring the unit value closer to its fair value and link it more closely to the performance of actual assets, rather than being affected by technical factors such as liquidity levels and supply and demand mechanisms in the open market. Conversely, it should be noted that the investor will lose the advantage of direct trading and the high flexibility provided by exchange-traded funds."

Liquidity Management and Redemption Balance

Student @Thanaa Al-Shayeb also saw that the decision carries clear operational dimensions, stating: "I see that transitioning to an open-end fund is a positive step if the goal is to address the issue of units trading at a discount to the Net Asset Value, as the investor will deal directly with fair value. However, conversely, they will lose part of the flexibility of quick buying and selling through the market, so it is important that the subscription and redemption procedures are easy and clear for the owners. From a performance perspective, the transition may give the fund manager greater flexibility in liquidity management and seizing investment opportunities, but the real challenge will be achieving a balance between the investment strategy and meeting any future high redemption requests. Ultimately, the success of the decision will be measured by its impact on returns and the investor experience more than just a change in the fund's structure."

Cash Management and Liquidity Pressures

Student Fay Aldossari@Fay Aldossari concluded the student discussion with a comprehensive reading of the risks and advantages of the new structure, stating: "The transition to the open structure represents a very fair solution for investors; it completely ends the problem of units trading at a discount to their actual value, and links liquidity directly to Net Asset Value (NAV) instead of being subject to supply and demand forces. Regarding the delisting, the importance of opening an investment account emerges as a mandatory step to prevent the freezing of units after they exit the usual trading portfolio on June 25, 2026, considering that the investor will face the challenge of losing the instant selling advantage at the click of a button, moving to a redemption mechanism constrained by specific evaluation days that take several business days. As for future performance and cash management, there is a possibility of facing a wave of high redemption requests initially from investors wishing for immediate liquidity, which may put pressure on the fund manager to sell some assets to provide cash, but after the fund stabilizes, this open structure will provide excellent flexibility to attract new liquidity and seize investment opportunities more efficiently."

Expert Opinion:

Professor Abdulaziz Khrais analyzes this unprecedented step in the financial market, stating: "In a unique case we have not seen before in the market, the decision to delist (Alkhabeer Growth and Income Fund) was approved by the fund assembly, making it a public open-end investment fund. This decision came after the fund manager announced his intention to change the nature of the fund from closed to open last December, especially since it was trading below the NAV (indicative price) at that time by a margin of 20%".

Khrais issues an important warning to investors, saying: "Fund owners must pay close attention to the dates set by the fund manager; as trading of the fund's units will be suspended starting Thursday, June 18, 2026, and the fund will be officially delisted on June 25, 2026. It is worth noting that the fund invests in a number of different assets that comply with the standards of its Sharia Supervisory Board, with the majority concentrated in listed global and local equities".

For those interested in more details .. through the list of proposed changes to the fund's terms and conditions:

A list of proposed changes to the terms and conditions of the 'Alkhabeer Growth and Income Fund' for delisting the fund