ADCB launches first Target Date Fund in MENA region

New investment options set to help expatriates in the UAE secure a comfortable retirement in their silver days 

Abu Dhabi, UAE, September 25, 2017:   Leading regional bank, Abu Dhabi Commercial Bank (ADCB) has announced a new range of investment options, Target 2025 and Target 2035. These venture opportunities are designed to help expatriates in the UAE secure a comfortable retirement by bridging the gap between mandatory end of service benefits and actual retirement needs. 

Numerous industry surveys demonstrate that expatriates in the UAE population ranks amongst the lowest in the world in terms of retirement savings. This is due largely to factors such as lack of suitable products and a general misunderstanding of level of savings needed to retire comfortably.

“The general apathy towards retirement savings amongst expatriates in the UAE is highly concerning” said Mark Friedenthal, Chief Investment Officer, ADCB. “The introduction of our Target Date Fund, will offer clients a risk appropriate retirement saving solution that they can buy and hold with the knowledge and comfort that their savings are in safe hands. In fact, we hope the low-cost simplicity and efficiency of the new Target Fund series will encourage individuals in the UAE to allocate more of their income towards retirement savings.”

A first-of-its-kind in the MENA region, the new Target Fund series is unlike traditional life-stage and target-risk funds in that these new funds adapt to the changing needs of the investor as they progress through life towards retirement. They automatically reset the asset mix of stocks, bonds and cash equivalents in its portfolio according to a selected time frame that suits an investor.  In effect, they offer a lifelong investment strategy that remain appropriate to an investor’s risk profile even if left un-reviewed.

Target-date funds’ allocation mix reflects investments in return-seeking assets, such as equities, in early years investors’ when risk capacity is higher. Over time, the investments of these funds typically become more conservative by switching progressively towards capital-preservation assets, such as bonds.

In the US, a 10-year trend has seen allocations to hybrid funds increase to as target date options have been driven by more plans installing automatic-enrollment features, making target-date funds the default investment options.  Closer to home, this type of funds offer a convenient multi-asset retirement savings strategy that is suitable for UAE residents of all age categories who may not have prioritized saving for their silver years.

While being marketed predominantly in the UAE, the Target 2025 and Target 2035 funds are truly international, underpinned by the fact that they are being launched through ADCB’s offshore UCITS fund platform in Luxembourg. Furthermore, ADCB is partnering with US based Principal Global Investors, a world leader in managing target-date and multi-asset funds, managing well over USD300Billion in more than 70 countries to maximise returns to customers in the UAE by anchoring investments on depth of research, a wide breadth of industry knowledge and reach of business. 

With extensive experience in managing mutual funds and offering wealth management solutions, ADCB is now pioneering a new category of investments to help UAE residents manage funds today for a better retirement tomorrow. With various accolades under its belt for its investment and fund management services, ADCB’s new Target 2025 and Target 2035 will be available from 16 October, 2017.