NBAD launches 100% capital-protected commodity basket investment

The National Bank of Abu Dhabi (NBAD), the Number One Bank in the UAE, launched 100% capital-protected commodity basket investment, a highly innovative product that allows investment in five commodities and offers investors the potential for attractive returns. 

The NBAD 100% Capital protected 5-in-1 Commodity basket investment is 100% capital guaranteed by NBAD and offers investors the unique opportunity to capture upside in the highly exciting commodity markets without exposing themselves to downside risk if held to maturity. 

The new product, developed by NBAD’s Asset Management Group (AMG), matures in three years and offers investors returns linked to the price of five commodities: Oil, Gold, Copper, Corn, and Sugar. The investors’ capital is guaranteed by NBAD against any losses from falls in the value of the commodity basket. 

This product enables investors to diversify their investments into commodities without physically having to buy thus freeing them of the burden and potential costs of keeping the commodities in their possession. 

At a time when investors are cautious about equity markets and real estate, the launch of a capital-protected commodity basket investment meets a vital and critical need in the market as investors’ appetite for commodities has increased steadily. 

 “We believe that investors should be given the opportunity to invest in commodities as part of a diversified portfolio. We have listened to our clients’ needs and are now offering a product that not only protects capital but also allows upside participation, all wrapped in a simple mechanism that avoids the need for complex physical commodity delivery and storage costs,” said Mark Watts, the Head of Fixed Income and responsible for structured products at NBAD’s Asset Management Group. 

“The product is being launched by the same team that successfully brought investors gold capital guaranteed products in the summer of last year and emerging market currencies and multi asset class investments this year.” 

Alan Durrant, the Group Chief Investment Officer of NBAD and General Manager of  Asset Management Group, added: “The NBAD 100% Capital protected 5-in-1 Commodity basket investment is a unique product that shows NBAD continues to lead the market place in producing innovative products. 

“Many investors today are faced with low returns on cash deposits, which with rising prices translates into negative return on cash. The new product diversifies portfolios and targets investors who want the potential to enjoy higher returns with 100% downside protection.” 

The NBAD 100% Capital protected 5-in-1 Commodity basket investment will be available to institutional and personal investors beginning on September 18 and would be offered for 4 weeks only with generous incentives for early subscribers. The minimum investment size is AED100,000. The expected return is capped at 24%. 

NBAD's Asset Management Group (AMG) is one of largest asset managers in the region with more than AED 5 billion under its management including equities, fixed income and Sukuk. 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.