The National Bank of Abu Dhabi (NBAD) has successfully launched its new Cautious Income Fund, targeting a yield of 5% per annum.
The NBAD Cautious Income fund attracted Dhs170m (=EGP 272m) in subscriptions last week at the initial launch price of $5. The fund is managed by NBAD’s Asset Management Group, and invests into local and MENA region bonds targeted to give investors a good yield premium over cash.
The first NAV strike after the initial offer period has seen the unit price rise to $5.0147. The fund is available on a weekly basis for new subscribers who want to increase their income or diversify holdings.
“We are delighted at the interest shown in our product and also that the fund has risen at such an early stage,” says Mark Watts CFA, the Head of Fixed Income, NBAD’s Asset Management Group. “The fund is ideal for investors who are seeking relative safety in a low risk product whilst still receiving a strong income flow. This is especially important today as interest rates are so low in the market giving investors problems.”
The NBAD Cautious Income Fund will be available to institutional and personal investors weekly via any NBAD branch. The minimum investment size is $500. Lump sum or regular savings scheme are available.
“Raising Dhs170m in subscriptions in an asset class which is new to many is a great achievement,” says Alan Durrant, the Group Chief Investment Officer of NBAD and General Manager of Asset Management Group. “This is an open ended fund and will be taking new subscriptions every week. It is also available as a Smart Investment Plan product with a minimum of just $500 per month. So, clients can build their holdings over time. “ NBAD’s Asset Management Group (AMG) is one of largest asset managers in the region with more than AED 5 billion under its management including equities, fixed income and Sukuk. It introduced the region’s first Exchange Traded Fund (ETF), 1UAE Share, which began trading in the Abu Dhabi Securities Exchange (ADX) on March 25, 2010.
Fixed Income team at NBAD’s Asset Management Group delivered over 9% returns for its unconstrained institutional clients in 2011, despite tough conditions in financial markets. NBAD achieved this high return by astutely investing in UAE and GCC bond markets, a selection based on internal research and investment process. The returns have been delivered in a very low risk fashion with portfolios displaying lower volatility than even 3 – 5 year US Treasuries.