Daman Investments has launched a Dh200 million open-ended equities fund that will primarily invest in volatile UAE stocks.
The Daman Speculator Fund will place 80 per cent of its capital in domestic stocks, with the remainder invested worldwide.
The offer period will run from today until July 31 and investment will start on August 1. "Speculation has usually had negative connotations, but we believe it is good for the market," said Shehab Gargash, Daman Investments managing director, who will personally manage the new fund.
"The new fund focuses on highly liquid securities and will aim to achieve gains by investing in high beta securities through risk-adjusted rapid capital appreciation."
He said the UAE markets were well suited to speculative trading strategies, while the fund will have weekly subscriptions and monthly redemptions. He said the fund would not focus on particular sectors, but would operate in an opportunistic nature to chase superior returns.
He would not be drawn on the return target, but said "a typical equity fund should be aiming for 15 to 20 per cent returns and so, as a speculative fund, we should be doing better than that". Daman has shortlisted 33 UAE securities as potential investment targets for the new fund, although the identities of these remain secret. The net asset value of the speculator fund can also be leveraged by up to 50 per cent, if desired.
The minimum investment is Dh200,000 and is open to everyone. There will be a two per cent subscription fee, a 1.5 per cent annual fee and a 0.5 per cent administration charge.