Al-Rajhi Capital, one of the major asset managers in Saudi Arabia, has started the offering period for the Al-Rajhi Sukuk Fund, described as a unique product investing in global sukuk and other Shariah-compliant instruments.

The fund is an open-ended fund designed to capture the opportunities available within the Shariah-compliant universe of sovereign, quasi-sovereign and corporate sukuk, issued locally, regionally, as well as globally.

Al-Rajhi Sukuk Fund will also invest in other income generating assets, within its mandate comprising commodity murabaha placements, Islamic placements, structured Islamic products and commodity mudaraba funds. The benchmark of the fund is 3-month dollar LIBOR + 75 bps.

The fund is targeted to be an attractive proposition for individual and institutional investors aiming for superior long term risk adjusted returns relative to the current money market rates.

Commenting on the fund’s launch, Gaurav Shah, CEO of Al-Rajhi Capital, said: “We are pleased to launch the Al-Rajhi Sukuk Fund, which will provide investors a managed platform to participate in the anticipated growth in sukuk issuance within the Kingdom, the rest of the GCC and globally.”

“In the midst of an extended low rate regime, investors are continuously seeking better risk adjusted returns, which can be achieved through a portfolio of sukuk and other income generating investments,” Shah said.

“Instruments such as sukuk offer greater predictability of returns and are an essential component of any diversified asset allocation strategy,” Shah added.

Al-Rajhi Capital is offering a special incentive whereby the subscription fees are waived for all new subscriptions until Sept. 11, 2014.

Al-Rajhi Capital manages approximately SR30 billion in money market, equity, multi-asset class and real estate based assets.