EIS launches two new Islamic products; investment at Dh1b

Having assets of Dh6.5 billion in just over two years, EIS opened in November the Emirates Islamic Equity Trading Fund by appointing London-based Old Mutual Asset Managers Limited as initial sub-advisor to the fund and the Emirates Islamic Global Real Estate Fund, which will go online in January.

The first product is built to generate long-term capital growth and strong risk-adjusted returns through investments with a short-term trading strategy in Shariah-compliant equities worldwide. The other fund, which is the seventh Shariah-compliant EIS financial instrument, will provide investors direct access to global property assets with a focus on European and Asian commercial properties.

Jamal bin Ghalaita, head of consumer banking and wealth management at Emirates NBD, a merger formed this year between Emirates Bank International and National Bank of Dubai, stressed that EIS's Islamic instrument shelf has provided innovative products to investors seeking high-risk adjusted returns.

He cited the Emirates Islamic Alternative Strategies Fund, the first of its kind, which has generated an annualised return of 10.2 per cent since June.

"We will be launching products all the time, but in a conservative manner because our main objective is to protect and grow the wealth of our clients," he said in a Press conference. "We will provide fantastic funds in the region and even abroad."

The head of asset management at EIS, Deon Vernooy, said that with the bullish market for financial instruments EIS would grow its total investments by at least 20 per cent next year.

The first long-term capital growth fund will have a capital of $30 million while another $20 million is for the other fund that will open in January, according to David Marshall, head of product development at EIS. "We're now approaching institutions to make investments," said.

He added that the Islamic real estate fund would mainly invest in commercial properties in Malaysia, Hong Kong, Singapore and the UK where rental fees are falling.

Vernooy stressed the good economic fundamentals in the region, saying that oil prices are at an all-time high and real interest rates are low. He also cited the opening up of MENA (Middle East and North Africa) region to foreign investors that created a good regional economic outlook.

He said that the funds managed by EIS have been seeing significant growth, saying that the Emirates Real Estate Fund has registered a 40 per cent rise in total return since June 2005 while the Emirates MENA Opportunities Fund has a compounded growth of 16 per cent.

The real estate fund, whose gross fund size is $449 million, invests in a diversified portfolio of residential and commercial properties across the UAE to achieve high-yielding rental income and medium- to long-term growth. It retains some liquidity by maintaining a part of its portfolio in cash or cash equivalent investments.

The MENA fund, on the other hand, extends to investors the chance to participate in Shariah-compliant growth investments in MENA markets. Launched in April 2006, the product's current fund size is $122.41 million.