The National Bank of Abu Dhabi (NBAD) has launched Sukuk Income Fund, a unique product investing in Sharia’h-compliant investment instruments that offers investors attractive returns with low levels of risk.

The Sukuk Income Fund is an open-ended and actively managed product targeting a profit rate of 5 per cent based on current market conditions. Any income will be distributed semi annually, a statement from the bank said.

It is open to institutional and individual investors who can invest as low as $500 either through lump sum or regular savings plans.

The fund is designed to capture the best opportunities available to investors by investing in a range of sukuk and money market investments that are issued by the UAE government, government-related entities, and selected corporates, mainly from the UAE and wider Mena region.

It will be managed by the bank’s asset management group, diversified, and closely monitored for risk minimisation, the statement said.

Mark Watts, head of fixed income, asset management group, NBAD, said: “Despite the global turmoil, the economy remains healthy in GCC and the Mena region because the region’s governments and corporations are investing heavily in expanding and improving infrastructure, which is mostly financed by bonds. As a result, this has created an unprecedented investment opportunities for regional fixed income instruments.”

“Since the beginning of the financial crisis, many investors have faced negative return on their cash investments.The NBAD Sukuk Income Fund offers low risk investment and offers choice to investors who seek Shria’ah-compliant instrumentswith a low tolerance for risk,” he said.

“The fund would allow them to benefit from higher income while retaining the flexibility to access their investment on a weekly basis.”

“It also offers the opportunity to diversify any investment portfolio and capture higher returns without taking undue risk,” he added.

The new fund will be open for subscriptions for a limited time at the initial $5 per unit, the statement said.

The offer period closes on June 4, and thereafter the fund will be available at the weekly NAV price, subject to market movements.

NBAD's asset management group was recently named “Best Asset Manager in the UAE” by Global Investor magazine, and “Best Investment Product Award” by Banker Middle East magazine for its GCC’s first Exchange Traded Fund (ETF), 1UAE. – TradeArabia News Service