JEDDAH, 28 April 2005 — The National Commercial Bank yesterday announced the launch of Al-Ahli Saudi Dynamic Trading Equity Fund.
“This is the only open-ended Shariah-compliant fund in the region that offers investors exposure to the up side of the Saudi stock market while using defensive portfolio management techniques to limit the down side,” Haitham Al-Mubarak, head of portfolio management at NCB’s investment services division, told a press conference at Le Meridien Hotel.
The fund adds to NCB’s array of 21 Shariah-compliant investment funds and further strengthens the bank’s strong hold in the mutual funds industry. NCB, claimed to be the oldest and most successful provider of mutual funds, launched the first Islamic mutual fund in 1987.
Leveraging its vast experience and heritage, NCB’s investment services division designed the innovative Al-Ahli Saudi Dynamic Trading Equity Fund, “which is aimed to reduce the investor’s losses in times of declining performance of the Saudi stock market,” he said, adding that no guarantee could however be given regarding losses or performance and the investors would be advised to adopt a long-term approach to monitoring the success of the fund.
Al-Mubarak, who was accompanied by Mohamad H. Al-Sewilem, head of the bank’s marketing investment services, and Abdullah Al-Darwish, head of the bank’s Islamic investment services, explained that the fund managers selected the most liquid blue chip Shariah-compliant stocks in the Saudi market on a monthly basis.
“At any given time, the proportion of the fund that is invested in Saudi equities varies between zero and 100 percent according to the quantitative investment analysis of NCB,” Al-Mubarak said. Experienced fund managers actively manage the fund. They diligently track market conditions to determine the percentage of assets to be allocated to local securities, cash and Murabahas. “In the event of a market decline, the allocation of equities to the fund will be reduced,” he added.
The new fund generated attractive results when it was tested through computer simulations against historical performance of the underlying index. “It is designed for investors who have a cautious outlook for the Saudi equity markets and require their investment to comply with Shariah investment principles. “Although we’ve developed this innovative new fund for those investors who would like to participate in the Saudi stock market while taking on less risk and possibly slightly less return, this does not mean that NCB is forecasting a decline in share prices. We just want to satisfy all the financial needs of our diverse range of customers,” Al-Mubarak said.
The market share of NCB’s funds exceeds 41 percent of the total investment assets in the Kingdom for 2004.
“We’ve started accepting subscriptions for our new fund from Tuesday,” Al-Mubarak later told Arab News. “All of our funds have done exceptionally well in the market even when it had downward fluctuations.”
