The National Bank of Abu Dhabi (NBAD) said its cautious income fund is set to make a semi-annual distribution of 1.97 per cent dividends on the back of strong performance and robust asset growth.

The dividend is earned from its inception on September 27, 2011 making an annualised yield of 3.44 per cent, said a statement from the company.

Launched by NBAD to meet market’s demand for low risk investment products, the Cautious Income Fund invests in a range of bonds and money market instruments predominantly in the UAE and wider Mena region.
 
In its first year, the fund has enjoyed successful growth to become the largest of its kind in the UAE by reaching $151 million. The fund put up a strong performance with the return to October 4 standing at 6.45 per cent, an annualised return of 11.46 per cent.

“Just as we set out to do, the Cautious Income Fund has delivered strong, low risk returns to our clients since its inception,” said Mark Watts, the head of fixed income at NBAD’s Asset Management Group.

“It allows investors access to our bond expertise that up until now was only available to corporate and institutional clients. Alongside its sister fund, the NBAD Sukuk Income Fund, which invests purely into Shari’a compliant investments, the fund gives our clients full access to the regional bond market in a simple and attractive package with subscription on a weekly basis,” stated Watts.

On the outlook for markets, Watts, who is the manager of the Fund, said: "We expect the fundamentals for the fund to be positive over the coming 12 months. Liquidity globally will remain plentiful thanks to actions by the European and US Central Banks."

"In addition, elevated oil prices have provided a welcome boost to the GCC region and we expect local economies to continue to buck the global economic trend and provide solid returns for investors," he stated.

The Cautious Income Fund’s yield is based on the Fund’s net Asset Value on September 27, which stood at $5.299. All investors as of that day are eligible to receive dividends.

The Fund is open ended and actively managed under the NBAD Growth Fund range. It is open to institutional and personal investors who can invest at least $500, he added.-TradeArabia News Service