Kuwait's IFA launches $171m mutual fund

Kuwait's International Financial Advisors (IFA) has launched an Islamic equities fund with a capital of up to 50 million dinars ($171 million).

IFA general manager Saleh Al Salmi told a news conference Al Asjad Islamic Fund will have a minimum subscription of 1,000 units priced at 1 dinar each. The ceiling for an individual investment will be up to 50 per cent of total units on offer.

Salmi said subscription, open to local and foreign individual and institutional investors, will be start on March 26 until April 19.

The fund will invest in the shares of the top 25 listed sharia-compliant Kuwaiti companies, which control more than 70 per cent of Kuwait's Islamic finance market and had a total price-to-earnings ratio of 7.2 at the end of 2005, Salmi said.

'We will invest in only the top 25 sharia-compliant listed companies,' he said. 'This will ensure less risk and good profit for investors of the new fund,' Salmi added.

Shareholders have a monthly recovery right after the first three months of the fund's start of operation.

Salmi said IFA, the fund manager, has a right to subscribe for up to 50 per cent of the capital.

The manager's remuneration is pegged at 1.25 per cent annually while the fund will take 15 per cent from any shareholder profit above 10 per cent. The subscription fee is pegged at 2 per cent.-Reuters