NBAD fund appreciates 26pc

The National Bank of Abu Dhabi's (NBAD) UAE Growth Fund has appreciated by 26 per cent, outperforming several funds globally to be among the top 25 funds worldwide, said officials.

The fund's growth is an achievement for the UAE with all eyes now focussed on the UAE stock markets, which are expected to grow steadily and in a sustained manner.

Terence Allen, head of investment banking and treasury at NBAD, said the UAE Growth Fund's appreciation confirms the bank's forecasts in October 2000, when it said the fund would appreciate by some 25 per cent over the next 18 months.

"This performance makes our UAE Growth Fund one of the top 20 funds in terms of performance worldwide," he said.

Earlier this year, NBAD had forecast that the UAE market would appreciate by some 15 per cent during the course of the year.

"We are currently experiencing about a 12 per cent growth in the value of UAE equities as measured by the NBAD general index and we expect the growth to exceed the 15 per cent forecast by end of the year," Allen said.

Galal Khadr, head of investment services department, said the total size of the fund is currently Dh108 million, comprising some 30 per cent of foreign institutional investors.

Of the balance held by individuals, some 40 per cent is invested by expatriates.

Given the liquidity of the UAE market, the ideal size of the fund should be Dh200 million and subscriptions are expected to close when the fund reaches this size.

The UAE Growth Fund benchmarks itself against the NBAD general index of UAE equities.

Over the same period, the index appreciated by 24.16 per cent and the UAE Growth Fund performance outstripped the index by a further two per cent approximately.

"If an investor had invested in stocks comprising the Dow Jones Index in the U.S., he would have lost 16.87 per cent during the same period.

"Similarly, if he had been invested in the stocks of the Nasdaq Index he would have lost a massive 57.58 per cent. Likewise, for the Japanese Nikkei Index and UK's FTSE index, investors would have lost some 30 per cent each," said Allen.

At a time when interest rates are historically low and uncertainty surrounding global equity markets, it should be irrefutable for all investors to take advantage of the opportunities offered by investing in UAE equity markets, where dividend yields alone are higher than interest rates one can receive on deposit for all major currencies, he added.

NBAD has also confirmed plans to set up an asset management group within its investment banking division. Further details are awaited.