Saudi bank launches Emerging Markets Fund

Dubai: Saudi Arabia's National Commercial Bank (NCB) announced the launch of the Emerging Markets Fund (EMF) on Sunday aimed at capitalising on fast growth in the world's emerging markets.

Brazil, Russia, India and China the so-called Bric countries are considered to be the best pros-pects among the emerging economies.

These four large, dynamic countries are undergoing rapid industrial expansion, have strong consumer and export growth, are enjoying substantial foreign direct investment, and are in the process of becoming a much larger force in the global economy.

"The future prospects for the emerging market countries are tremendous. In less than 40 years the combined BRIC economies alone could be bigger than the G6 in US dollar terms," said Sami Abdo, head of NCB's investment services division.

"Currently they are worth less than 15 per cent of the G6 economies, but it is estimated that by 2025 they could be more than half the size of the G6. It is also estimated that the BRIC's real exchange rates could appreciate by up to 300 per cent over the next 50 years at an average of 2.5 per cent a year. These forecasts point to unparalleled opportunities and indicate that long-term investment in emerging markets can reap rich rewards."

NCB has introduced the Emerging Markets Fund (EMF) to meet the needs of investors who are looking for strategic geographical diversification of their portfolios across the most promising long-term investment opportunities in the emerging market econ-omies.

A noteworthy feature of the NCB fund is that it is not only one of the few Shariah compliant funds that invests in the emerging markets, but also one of the few that invests in several emerging markets in addition to the Bric countries.

Sami Abdo went on to explain that the Emerging Markets Fund has been structured as an opportunity for entrepreneurial investors who have a broad vision of the world and its future economic development.

"It is an open-ended fund investing in companies that will benefit from the growth of emerging markets over the long term as defined by five years and upwards. In short, EMF is a product for people who are capitalising on the future," he said.

The fund is managed by Lazard.

The minimum investment amount is $2,000 and while it is a high risk-high return opportunity, it is significantly less risky than investing in the GCC and Saudi markets because it is operating in more mature, stable markets.