“Markaz Fixed Income Fund” had been operational since January 2011, and managed to give stable returns from bonds and sukuk issued by GCC governments and highly rated corporations. The Fund offers investors with alternative low risk financial opportunities which exceed current bank interest rates.
At the end of first quarter 2011, the Fund registered a loss of -0.15% due to instability in the region. However with signs of improved stability in the region, bonds and sukuk market reacted positively. The Fund, reflecting the market, posted positive gains in Q2 achieving monthly returns of 1.37% in April, 1.08% in May and continued its positive run through June to post a YTD return of 2.48% as of 16th of June 2011.
“Capitalizing on the region’s positive outlook in medium and long run compared to other financial markets due to a rise in oil prices and other factors like population structure and ambitious development plans which seeks to offer economical prosperity in the region, Markaz Fixed Income Fund seeks to provide steady returns and reduced risks by investing in high grade bonds and sukuk with stable yields,” Rasha Othman, Vice President Fixed Income said.
“We have a robust investment process in place utilizing analysis and extensive due diligence of investment opportunities. We have a clear investment policy of assuring steady and selective returns. The Fund invests primarily in bonds and sukuk issued or guaranteed by sovereigns, quasi-sovereign institutions and highly rated corporations in the Gulf Cooperation Council (GCC) countries. Our geographical investment allocation policy focuses mainly on the GCC Countries while a maximum of 30% of the Fund’s assets may be allocated to seize high quality attractive opportunities in the MENA region. Not less than 80% of the Fund’s assets will be invested in securities with medium maturities not exceeding 5 years,” she added.
“Markaz Fixed Income Fund” is available for subscription to investors of all nationalities with a minimum initial investment of 300 units and Par Value per Unit of USD 10. Subscriptions are weekly and redemptions are monthly. The term of the Fund is five years extendable by two similar periods.
Currently, the Fund has invested exclusively in the GCC, with an average maturity period of 3 years to assure less exposure to fluctuations in interest rates. The composite rating of the fund is A-.
Markaz has a track record in managing GCC bonds and sukuk portfolios. “Markaz Fixed Income Portfolio service” was launched in Q1 2009, it seized the opportunity and invested in high grade GCC bonds and sukuk with high discounts and high returns compared to low risk rates. Markaz managed more than USD 100 million in high investment grade GCC bonds and sukuk and achieved high returns exceeding an IRR of 12% p.a.
Markaz investment banking team also structured USD 500 million of conventional bonds and sukuk on behalf of corporate clients and advised on restructuring of issues following the recent credit crunch.