Once very profitable investment, mutual funds of UAE-based National Bank of Abu Dhabi (NBAD) and Abu Dhabi Commercial Bank (ADCB) are now a painful loss for investors. Back in August 2008, right before the collapse of Lehman Brothers in the United States, funds’ units traded somewhere between 80% to 90% higher. UAE Growth Fund units were priced above AED 21, while ADCB’s Nokhita units reached above 11 Dirhams. Unfortunately, since then, for four years in a row, the mutual funds did not recover even partially.
Most of the funds track combined assets’ performance within the real estate, banking, utilities and telecoms of UAE. NBAD’s UAE Growth Fund measures the performance of the country’s economic sectors, in a similar way the Nokhita Fund of ADCB does. Yet, both investment funds perform extremely weak. Occasionally, a rise of up to 5% on weekly basis gives hopes to investors, but the following drops continue to discourage.
Table 1 shows the current net asset value per unit for NBAD’s mutual funds.
Table 2 shows the valuations from August 2008:
Mutual funds typically target small and medium size retail investors. However, at present most of them suffered tremendous losses that discourage even from attempts to leverage out by buying now at the lower prices.
In addition, the mutual funds are actually continue to cost investors management fees on annual basis, directly deducted from the assets.
All together, investment in NBAD’s and ADCB’s mutual funds is not recommendable at present.