ASBC Sukuk Fund

The ASBC Sukuk Fund has two managers with ASB Capital – the Dubai-headquartered asset management arm of Bahrain’s Al Salam Bank – as its originating manager, while actual investments are farmed out to Arqaam Capital, another UAE-based firm.

This strategy replicates the April 2025 deal by ASB Capital with State Street Global Advisors for the new Shariah compliant Global Equity Fund, Hichem Djouhri, ASB Capital’s senior executive officer, shared with IFN Investor.

The ASBC Sukuk Fund is an open-ended sub-fund operating as a protected cell under ASBC Cross-Asset Open-Ended PCC – a public fund incorporated in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority.

Operationally launched on the 1^st May 2025, the ASBC Sukuk Fund offers sophisticated investors access to global Sukuk markets through an actively managed, income-focused portfolio benchmarked against the Dow Jones Sukuk Index.

With an issue price of US$100 per unit, the initial offering that closed on the 30^th April 2025 was made available in four classes. The lowest entry was set at US$10,000 for share class B, US$100,000 for share class A and the highest at US$1 million for share class C.

While the first three share classes will see any dividends declared to be automatically reinvested, the fourth category D provides for quarterly dividend distributions, with US$100,000 as the minimum initial subscription. A 5% subscription fee applies and subsequent investments are in US$1,000 multiples for all share classes.

Hichem explained that the class D subscription is designed for investors seeking regular income – while classes A, B, and C follow an accumulation strategy.

The overall fund investment strategy incorporates a global macro overlay – with emphasis on duration management, portfolio protection and risk factor exposure. The fund will also invest in pull-to-par trades, special situations and re-rating opportunities.

Typically holding 35 to 40 Sukuk, with an average coupon of 6%, the maximum tenor for instruments held is capped at seven years and the average maturity is 5.7 years. A 15% limit is set for investments in any specific issuer or security.

Beyond a range of management fees for each share class, the fund managers get a performance fee set at 10% of the funds’ NAV annual increase – as long as the increase is above the initial offer price or 8% higher compared to the previous year’s NAV.

*Disclaimer:  The opinions and viewpoints expressed in this Fund Profile do not constitute as recommendations for any funds highlighted. The information presented is not investment advice and should not be treated as such.

Source: ASB Capital