NBK launches mutual fund denominated in Kuwaiti Dinars

Kuwait's largets commercial bank, the National Bank of Kuwait (NBK), launched its first mutual fund denominated in Kuwaiti Dinars

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By  Massoud Derhally Published  May 12, 2002

The objective of the Fund is to generate returns in excess of fixed deposit rates in Kuwaiti Dinars. The Fund, which is a low risk vehicle, denominated in Kuwaiti Dinars, is suitable for investors with a short-term investment horizon who are seeking to increase their interest earnings with minimal risk said the bank. NBK says by investing in the Fund, investors can benefit from investments in high-quality, interest bearing securities while enjoying easy weekly access to their money.

George Nasra, general manager of Investment Banking Group at NBK, stated that the Fund would generate its returns by investing in a diversified portfolio of high quality local government treasury bills and bonds, corporate bonds, fixed deposits, commercial paper, certificate of deposit (CD’s) and repurchase agreements.

The securities chosen for the portfolio will be those issued by high quality issuers and the risk profile of the Fund will be tightly controlled by the same team at NBK that manages the banks balance sheet to ensure that the banks high standards of credit analysis and long experience of money management are fully utilized to benefit the Fund’s shareholders and enhance return.

“With fifty years of experience in investing in the Kuwaiti Dinar Money Market, NBK is uniquely qualified to help investors benefit from investing in such instruments”, added Nasra. He also commented that money market funds in the US have witnessed an annual growth of 19.2% between 1995 to 2001 taking the total investments from $ 753 billion to $ 2.162 billion during the same period. “Investors have been seeking a low-risk investment in high-quality securities using the local currency with weekly access to their money and we are certain that this Fund should find wide demand”, concluded Nasra.

The Fund is open-ended, and the initial subscription period starts May 12th until May 30th. During this period, the initial share price will be KD 1. Subsequently, investors will be able to subscribe into or redeem from the fund on a weekly basis at the prevailing Net Asset Value. The minimum investment amount is KD 25,000 with additional amounts in multiples of KD 1,000.

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