Islamic mutual funds attract strong interest
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Islamic mutual funds attract strong interest

Saudi and Qatari banks launch new investment products. National Commercial Bank has become only the second Saudi Arabian financial services provider to launch a Shariah-compliant mutual fund that will invest in the countries in the Gulf Cooperation Council.

Shakarchi: new Qatar-focused fund

National Commercial Bank has become only the second Saudi Arabian financial services provider to launch a Shariah-compliant mutual fund that will invest in the countries in the Gulf Cooperation Council. The Al-Ahli GCC Trading Equity Fund is an open-ended fund denominated in Saudi riyals with a minimum subscription of SR5,000 ($1,333) and a 1.85% a year management fee.

According to the bank, the fund’s objective is: “To generate long-term capital growth through investing in GCC companies listed in various GCC stock exchanges and which comply with the Shariah criteria for investment.”

It will also invest in murabaha (a contract of sale in which the seller declares his profit and cost) transactions and murabaha funds, all of which must be approved by NCB’s Shariah board.

At a press conference marking the fund’s launch, Haithem Al-Mubarak, head of portfolio management at National Commercial Bank, said: “The [fund] will leverage the strong economic growth in the region for a longer term based on [our] positive and pragmatic overview of the macroeconomic performance of the GCC markets.”

Although noting the particular risks of investing in emerging markets, Mubarak stressed “the importance of diversification in the selection of the assets in this fund across the six GCC countries”.

Gift this article