The National Bank of Abu Dhabi (NBAD), has announced that its new mutual fund, the NBAD Cautious Income Fund, will accept subscriptions from tomorrow.

This new fund is a unique bond fund that offers investors attractive returns with low levels of risk.

The NBAD Cautious Income Fund is an open-ended, actively managed product with an expected yield target of 5% based on current market conditions. Any income will be distributed semi annually. It is open to institutional and personal investors who can invest as low as USD500 either through lump sum or regular savings plans.

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.

The new fund, NBAD Cautious Income 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 set to become a flagship fund for NBAD. We have built a terrific fund management team as evidenced by the plethora of awards we have recently received. Our fixed income team has delivered strong returns for institutional clients in 2011 and I am delighted that these skills are now available for everyone to access through this fund." said Alan Durrant, the NBAD Group Chief Investment Officer and General Manager of Asset Management Group.

NBAD’s Asset Management Group (AMG) is one of largest asset managers in the region with AED5.2 billion under its management. It has recently been awarded Best Asset Manager in the UAE by Global Investor magazine, and the Best Investment Product Award by Banker Middle East magazine for its GCC’s first Exchange Traded Fund (ETF), 1UAE Share.

"Many investors today are faced with low returns on cash deposits, which with rising prices translates into a negative return on cash. The NBAD Cautious Income Fund diversifies portfolios and is targeted for investors who want to enjoy higher income whilst 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." The fund will be open for subscriptions for a limited time at the initial USD5 per unit. The offer period closes on the 27th February. Thereafter the fund will be available at the weekly NAV price, subject to market movements.

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