The National Bank of Abu Dhabi (NBAD), on Sunday announced the launch of a 100 per cent capital-protected commodity basket investment, an innovative product that allows investment in five commodities and offers investors the potential for attractive returns.
The new product, developed by NBAD's Asset Management Group, matures in three years and offers investors returns linked to the price of five commodities: oil, gold, copper, corn and sugar. The investor's capital is guaranteed by NBAD against any losses from falls in the value of the commodity basket.
"This product enables investors to diversify their investments into commodities without physically having to buy, thus freeing them of the burden and potential costs of keeping the commodities in their possession," said NBAD in a statement.
"We have listened to our clients' needs and are now offering a product that not only protects capital but also allows upside participation, all wrapped in a simple mechanism that avoids the need for complex physical commodity delivery and storage costs," said Mark Watts, the Head of Fixed Income and responsible for structured products at NBAD's Asset Management Group.
"Many investors today are faced with low returns on cash deposits.... The new product diversifies portfolios and targets investors who want the potential to enjoy higher returns with 100 per cent downside protection," said Alan Durrant, NBAD's group chief investment officer.
The NBAD commodity basket investment is available to institutional and personal investors beginning yesterday and will be offered for four weeks only with generous incentives for early subscribers. The minimum investment is Dh100,000. The expected return is capped at 24 per cent.