Investment Overview

Investment Objectives:

• National Bonds Corporation (“NBC”) offers Shari’a compliant saving based on a Mudarabah structure.
• The Mudarabah pool of assets seeks to provide bondholders and investors with a steady stream of returns through an optimal allocation of assets across a highly diversified investment strategy.
• The broad investment return objective is to achieve consistent competitive returns across various market cycles, while often maintaining a conservative risk profile and preserving capital.
• The core investment philosophy is built on the principle of supporting disciplined and regular savings amongst investors and bondholders in order to achieve their savings and investments objectives.

Strategy:

• NBC follows a structured approach to investing with a focus on long term investment, whilst also being able to respond to tactical opportunities that may be present over the short term.
• NBC aims to take into account a risk level commensurate with its long-term return objectives.
• The company’s long-term investment strategy is guided by the Strategic Asset Allocation (“SAA”) decisions, through which it seeks to achieve competitive returns over the long term. Defining risk appetite is a priority to achieve an optimal Strategic Asset Allocation mix.
• The Investment Committee periodically reviews the actual distribution ratio of the asset pool and whether there is a need for any fundamental changes in the investment environment that require a rebalancing of the strategic asset mix.
• The Dynamic Asset Allocation (“DAA”) process aims to produce investment benefits by departing from the Strategic Asset Allocation over the medium term, to achieve the highest possible returns across market periods, taking into account the associated risks and the basic assumptions on which the Mudarabah pool is based.
• The Investment Team regularly seeks to identify market distortions that can be taken advantage of over the short term.

Vision:

• To be a leading Islamic investment institution in the UAE by fulfilling bondholders’ expectations and maximising returns adjusted while taking into account an acceptable level of risk.
• Promoting the culture of financial literacy in general, and establishing regular saving habits among its investors and bondholders.

Process:

• The Investment Policy serves as the overarching strategic investment framework for managing the Mudarabah pool investments.
• The Investment Policy seeks to encapsulate a robust structure for controlling the detailed operational and administrative aspects of the investment pool’s assets.
• This Policy defines the objectives of the investment pool and the means for achieving them, including the responsibilities of stakeholders and guidelines under which the investment activities of the Fund operate.
• The Board of Directors being the ultimate decision-making body in the company, each of NBC’s Board and committees stemming from it, have responsibilities in the overseeing and implementation of this Policy, within a clearly defined framework.
• The Investment Committee is delegated with overseeing the strategy implementation and on-ongoing monitoring of investment performance.
• Under the direction of the Chief Investment Officer (“CIO”) and within well-defined guidelines, the company’s Investment Department implements the Investment Policy and continuously oversees the pool's investments.

Risk Management and Compliance Framework

• Following the investment pool’s approach in avoiding all obstacles impeding the achievement of its strategic objectives, this Department works to manage risks more effectively, by raising the level of awareness in all Departments, and leading the investment, financial, operational and executive operations in an integrated manner.
• NBC’s risk framework establishes the general guidelines for the risk management of the investment pool.
• NBC’s risk framework seeks to capture all dimensions of risk including but not limited to market, credit, liquidity and operational risks.
• The Risk and Compliance Department works closely with the Investment Team and the CIO to discuss potential risks, and how to manage and mitigate them during investment periods. The risk management system and the work of the Risk and Compliance Team is an integral part of the pool’s investment process.
• NBC has adopted clear delegation powers to ensure that the investment process is conducted within several stages of checks and controls before final execution.
• A comprehensive performance monitoring regime is maintained over the life of the investment.