Guaranteed Returns

by Faysal Badran September 1, 2005

written by Faysal Badran September 1, 2005

Investors with a lower risk appetite or a shorter investment time horizon generally prefer to seek out an investment arrangement that provides a degree of certainty over capital, while seeking returns related to the performance of some of the world’s stock markets. Capital protected funds, also called guaranteed funds, are created to fill this need and have been offered at various times by Lebanon’s leading banks. A typical capital protected fund will promise to return at least 95%, and often 100% of an investor’s capital, while also paying out any gain on the given stock index during the fund’s life, normally between three and seven years. You hear it all the time: “The sort of investment I’d like is high yield, low risk, and completely liquid.” I’d like that too. Everyone would like that. In a perfect world. But in this world, that’s not how it works at all. The

Faysal Badran

Faysal Badran is the head of NCB Capital, a Saudi-based wealth and asset management firm. He oversees the company’s regional and international equities, global fixed income, money market, and alternative investments. Before joining NCB Capital, Badran spent five years at its parent company, National Commercial Bank (NCB), working in the office of the chief financial officer and in the international sector division. He also contributed as a writer for Executive magazine in Lebanon. Badran holds a bachelor’s degree in economics from DePauw University in the U.S.

Guaranteed Returns

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