Abu Dhabi Islamic Bank (ADIB), a top-tier Islamic financial institution, has launched a new capital-protected note that allows customers to invest in the world’s biggest car manufacturers.
The Shari’a-compliant note, which matures in 1 year, provides 100 percent capital protection at maturity to minimize risk, with an expected return of up to 8%. The note is currently open for subscription with a minimum amount of US$30,000.
The note offers the opportunity to profit from the expected growth of the leading car manufacturers in the world including Toyota, GM, Volkswagen, Honda Motors and BMW.
The automobile sector has performed impressively in 2013, sustained by the economic recovery and escalating demand in the U.S. and Asia, which has been reflected in stock prices.
General Motors’ stock has surged more than 56% since last year, and Toyota’s share price has improved almost 60% since 2012. The BMW Group has retained its position as world market leader in the premium segment, while Honda’s profit margins have risen through increased sales and a rapid recovery in motorcycle markets and the growth of the North American auto market. Volkswagen has also registered a significant improvement compared to the first half of the year registering with a €16.6bn net cash position.
ADIB’s structured notes have been well received by investors, particularly the three capital-protected gold notes and two capital-protected oil notes that matured at the beginning of 2013. The one-year gold note produced a total return of 15 percent, while slightly lower-risk notes returned 4 percent and 6 percent. One of the two-year oil notes produced a 17.9 percent return, with the other generating a 1.21 percent return.
This latest offering is part of ADIB’s wealth management approach to provide customers a diversified suite of investment solutions. The strategy involves developing and delivering best-in-class investment solutions tailored to meet the financial needs of customers through effective financial planning and asset allocation.