Al Rajhi Capital, the investment banking subsidiary of Al Rajhi Bank, launched Saturday the Al Rajhi MENA Dividend Growth Fund, the bank said in a statement. The new Fund is an open-ended growth and income fund with a minimum subscription of SR5,000. Its objective is to generate returns through a combination of current income to be gained by investing in high-performing dividend-paying stocks as well as through capital gains. The Fund will distribute dividends to investors on a semi-annual basis. Al Rajhi MENA Dividend Growth Fund will invest in Shariah-compliant listed equities primarily in the GCC markets and secondarily in other markets in the MENA region. The benchmark of the Fund is S&P MENA Shariah Dividend Growth Index. Al Rajhi MENA Dividend Growth Fund is expected to be an attractive proposition for investors having a medium to long-term horizon. Following the stock market correction in 2006 and the global credit crisis in 2008, the recovery in the major MENA equity markets have lagged many of the other emerging markets, and hence provide better value to investors. Commenting on the Fund's launch, Gaurav Shah, CEO of Al Rajhi Capital, said: "We are pleased to launch Al Rajhi MENA Dividend Growth Fund allowing investors to take advantage of selected investment opportunities available across the region. The key drivers of MENA equity investing remain strong on the back of macroeconomic position of its key economies underpinned by oil and hydrocarbon revenues. The massive scale of infrastructure investments, the favorable demographics of the underlying population and the growing strategic importance of the region in the World Economic Bloc are additional considerations. The forecast economic growth in the region of 4 percent in FY 2012 - 2013, combined with accommodative fiscal policy in the GCC region, should create a positive environment for equity investments." He further said "in the midst of structural problems in the developed world that may lead to an extended period of slow growth, MENA is well poised to attract investors through the strong underlying growth fundamentals, reasonable valuations, high dividend yield and its growing importance in the emerging markets. “With Al Rajhi Capital's deep insight and equity expertise, this Fund is suitable for investors wanting to fully leverage market opportunities in the MENA, particularly GCC," he added. Majed Al-Otaibi, Chief Investment Officer at Al Rajhi Capital, said: "The Fund will invest in a portfolio of attractively valued companies that can pay high and sustainable dividends. We will follow fundamental approach to assess factors that contribute to long term ability to generate strong cash flow from operations to make dividend payments. The Fund's portfolio will be identified from the available universe of high dividend yielding stocks of companies that exhibit a solid business model, competitiveness, competent management and a track record of paying high dividends. With expected continued growth of the regional economies, we see a good potential for corporate across the region." Alongside the launch, Al Rajhi Capital is offering a special launch incentive whereby the subscription fees are waived for all new subscriptions during the launch period which started on March 17 and will end on April 30, 2012. Al Rajhi Capital manages around SR23 billion in local, regional, international equity and money market assets. To subscribe to the new Al Rajhi MENA Dividend Growth Fund investors can visit one of the Al Rajhi Capital Investment & Fund Centers across the Kingdom or by calling 800 124 5858. More information on Al Rajhi Capital and the Fund can also be found onwww.alrajhi
