National Commercial Bank (NCB), recently confirmed as the Kingdom’s top performing fund manager, today announced the closing deadline for investing in its low risk Saudi Secured Trading Equity Fund (Saudi Secure) is April 10 – less than a week away.
The fund has been structured to limit the downside for mutual fund investors with exposure to the Saudi Stock market. This is in response to the trend of Saudi investors increasingly turning to ‘safer haven’ funds as local and regional markets have become increasingly volatile. Haitham Mubarak, NCB’s Head of Portfolio Management, said: “The attraction of Saudi Secure for investors is that it aims to caps losses at 10 per cent over the three-year life of the fund while continuing to allow 100 per cent participation in the stock market upside. It is win-win for investors.
“It would have been particularly welcome for those hard hit by the recent correction that erased 25 per of the value of their equity portfolios. Saudi Secure would have targeted capping the losses at 10 per cent over the 3 year life of the fund, a significant difference since for someone investing SR250,000 the amount would have been SR37,500, instead of SR62,500.”
Saudi Secured is backed by a three-year principal protected note and offers a Saudi equity-linked 90 per cent capital protected structure despite as much as 100 per cent participation in market upside – features that are sure to appeal to investors keen to avoid the downside of any further stock market decline.
Because there is a strong focus on risk management, the fund is committed to creating a portfolio with a definite bias towards highly liquid Tadawul-listed equities. Its value will also be underwritten and guaranteed by a global financial institution. “The effect is to limit the downside risks to a bare minimum for investors,” Mubarak added.
He added: “What they are getting is exposure to the Saudi equity market with limited risk to their capital. The Fund will suit investors with a bullish outlook on the market yet who are cautious enough at the same time to want to limit risk.
This is the new reality for investors and fund managers alike. Investors in general have a positive outlook but they are increasingly aware that markets can both climb and decline.
“Curiously, the fund is as well suited to established investors who have seen significant capital gain but now want to lock in profits as it is to new investors who want both capital protection and the possibility of spectacular growth in the local market.
It complements NCB’s two other Saudi equity fund and the GCC fund.”
Notes for editors
NCB was the first Saudi Arabian bank to introduce mutual funds in the Kingdom in 1979 and remains the leader of the industry because of its extensive experience and expertise in the field.
The bank is acknowledged internationally as the pioneer and innovator in Islamic Shariah-compliant mutual funds. This achievement was recognized when NCB was awarded the Euromoney International Award for the Best Islamic Asset Management House for two consecutive years in 2003 and 2004.
