JEDDAH, 8 December 2003 — The National Commercial Bank (NCB) has launched five Islamic mutual funds, continuing what it calls its history of innovation.
Three are new risk-profiled funds called Al-Manara Portfolios — Al-Manara Conservative Growth, Al-Manara Medium Growth and Al-Manara High Growth. The other two funds are the Al-Ahli Diversified Saudi Riyal Trade Fund and the Al-Ahli Diversified US Dollar Trade Fund.
Mohamad Al-Sewilem, marketing head of NCB Investment Services, said the Arabic word Al-Manara originally derives from the Arabic word “noor” and means “the lighthouse”.
He said that NCB won two prestigious awards in recognition of its track record in the provision of Islamic funds. Early this year NCB received the Euromoney Award and in October it won Best Islamic Management Award at the Oasis Islamic Finance and Investment Conference recently held in South Africa.
Al-Sewilem said that so far the response for Islamic funds had been excellent but Saudi individual investment education is very limited. “NCB takes every care to educate potential investors,” he said.
The Al-Manara portfolio range offers three diversified investment solutions provided by NCB with its chosen sub-advisers. The stock-picking skills of such managers as Wellington, Gulf International Bank, Bakheet and Deutsche Bank are combined with NCB’s extensive experience in Islamic investing.
“The Al-Manara Conservative Growth Portfolio is a solution for investors who are still cautious about the risks of equity markets but who realize that cash-only funds cannot, in the current environment, provide a sufficiently high return.”
The Medium Growth Portfolio is a solution for investors who are prepared to commit half of their investment portfolio to equity markets, but appreciate that it is sensible to diversify across a wide range of markets and currencies and countries.
The High Growth Portfolio is suited for investors who understand and appreciate that equities, although volatile, are the asset class that has the highest probability of delivering significant capital growth. Such investors typically take a longer-term view of returns.
“We already manage the Al-Ahli Saudi Riyal Trade Fund which, at over $3 billion, is the world’s largest Islamic mutual fund. We conducted research recently which made it clear that investors were looking for more innovation and higher returns. We now offer two new funds — one denominated in riyal and one in dollars — which are managed to deliver higher returns to investors without taking on the risk of equity markets.”
“The two Al-Ahli Diversified Funds are low-risk specialist, open-end funds designed for investors who wish to employ the manager’s full discretion in the search for high returns from trade transactions which conform to murabaha principles and from Islamic bonds — sukuk — and other instruments.”
“So far, over $20 million has been subscribed by customers,” according to Andrew Broadley, division head of NCB Investment Services.