The National Bank of Abu Dhabi (NBAD) plans to launch (subject to Emirates Securities and Commodities (SCA) approval), the NBAD Cautious Income Fund, a unique bond fund that offers investors attractive returns with low levels of risk.

At a time when investors are cautious about equities markets and real estate, the launch of a fixed income fund meets a vital and critical need in the market.

The NBAD Cautious Income Fund is open ended and actively managed under the NBAD Growth Fund range. It is open to institutional and personal investors who can invest as low as AED 5,000. The expected annual return on the fund is 5% based on current market conditions, any income will be distributed semi annually.

The Fund invests in a range of bonds and money market instruments predominantly in the UAE and wider MENA region. NBAD’s Asset Management Group, the fund manager, will diversify the Fund by paying close attention to risk minimisation. It would include government and government-related entities as well as select corporations that fit the Fund’s profile.

"The NBAD Cautious Income Fund is a unique product that shows NBAD continues to lead the market place in producing innovative products," said Alan Durrant, the Chief Investment Officer of NBAD’s Asset Management Group.

NBAD’s Asset Management Group (AMG) is one of largest asset managers in the region with AED4.1 billion under its management. 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.

The NBAD Cautious Income Fund meets the need of investors who desire a low-risk product that hedges against the uncertainty of equities market and real estate investment "Many investors today are faced with low returns on cash deposits, which with rising prices translates into negative return on cash. The NBAD Cautious Income Fund diversifies portfolios and is targeted for investors who want to enjoy higher income while retaining the flexibility to access their investment on a weekly basis," said Mark Watts, the Head of Fixed Income at NBAD’s Asset Management Group. "Across the GCC and the wider MENA region 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 opportunity for investing in fixed income instruments that are based in the region. This is a great product for investors with a low tolerance for risk allowing them to capture higher returns without taking undue risk. Furthermore, it helps diversify any investment portfolio."
 

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