Bank of London and the Middle East (BLME) has announced the launch of a Sharia-compliant fund which targets institutional and high net-worth investors in Gulf countries.

The BLME High Yield Fund targets a net return of three-month US dollar Libor (London Interbank Offered Rate) in addition to a five per cent return p.a. by investing 85 per cent in sukuk and 15 per cent in Ijara, said a statement from the London bank.

The sukuk market has become more liquid and diversified, and provides the fund with the opportunity for strong returns, it added.

BLME said the high yield fund is eyeing those investors who seek to generate higher returns than those targeted by BLME's US Dollar Income Fund.

It is an open-ended fund, with a minimum investment of $250,000 with Sterling and Euro share classes also available, it stated.

The fund, a part of BLME's existing Sharia Umbrella Fund SICAV-SIF and domiciled in Luxembourg, has been launched with a $10 million of seed capital.

'The BLME High Yield Fund responds to the demand we have seen from institutional and high net-worth investors for a fund with a higher risk/return profile,' said BLME asset management head Nigel Denison.

'This is the second new compartment under BLME's Sharia Umbrella Fund this year and highlights BLME's continued commitment to developing competitive Sharia-compliant funds across a range of asset classes,' he added-TradeArabia News Service