NBAD set to launch Trading Fund

Buoyed by investor response and bullish prospects for mutual funds, NBAD is launching another fund, the NBAD Trading Fund, in the last quarter of this year.

Meanwhile, NBAD's UAE Growth Fund appreciated 13.7 per cent last year and further growth is likely. The bank's Global Growth Fund (GGF) has stabilised with returns touching 10 per cent.

Central Bank approval for the new fund is awaited. As an open-ended fund, the minimum investment will be Dh10,000 and it will be open for nationals, expatriates and institutional investors. "The fund could be launched in mid or late September this year. We are focusing on short-term trading, short-term buying and selling," said Terence D. Allen, NBAD Head of Investment Banking and Treasury.

The returns are expected to be in line with market trends and although it is likely to outperform the NBAD General Index, it will be more volatile.

"Importantly, the Central Bank is opening up the dirham market, creating a subsidiary market for such instruments, thus allowing banks to trade instruments and also opening up the UAE to a lot of foreign borrowers," he said.

As a capital appreciation fund, the NBAD UAE Growth Fund (launched in October 2000) was among the top 20 funds worldwide.

The fund has made a remarkable return of 32.6 per cent for investors. "Our strategy of prudent asset allocation and sound stock diversification has come against a backdrop of local market developments, increased activity and high investor interest."

In the first quarter of this year, the fund achieved an annualised return of 4.56 per cent versus a 0.4 per cent appreciation of the NBAD index.

The fund's size as at end May was Dh119.24 million, a 5.9 per cent growth compared with Dh112.5 million last December.

The fund invests mainly in the UAE and GCC stock markets.