Market Updates
FAB publishes Prospectuses for its two EOSB funds with Capital Protection
Reveals key details on structure, governance, reporting and fees of its two EOSB Funds with Capital Protection.
By Nisha Braganza
Following FAB's announcement last month that its EOSB Fund with Capital Protection had opened to individual investors, FAB has now published the Prospectuses and Key Investor Information Documents for its two EOSB funds, revealing more details about how the funds are structured, who can access them and what they cost.
This disclosure makes FAB the second approved provider of the UAE EOSB Savings Scheme (after National Bonds) to publicly release key documents about its EOSB offering. Over time, similar disclosures are expected from the other approved EOSB providers.
Here are the key points to note about the FAB EOSB Plan:
Investment strategy and capital protection
FAB currently offers two EOSB Funds:
- FAB End-of-Service Benefit Fund with Capital Protection - invests in conventional securities
- FAB Islamic End-of-Service Benefit Fund with Capital Protection - is a Shariah-compliant option
Both funds are categorised as money market funds with a capital protection mechanism.
The Funds invest in high-quality, low-risk instruments, including UAE bank deposits, money market transactions, UAE government debt and sukuk, and Central Bank of the UAE monetary bills. Deposits and money market placements may also be made with banks outside the UAE that are licensed and supervised by a regulator equivalent to the CBUAE. These conservative investment parameters are mandated by the UAE Capital Market Authority for capital-protected EOSB funds, helping preserve capital and maintain liquidity to meet EOSB obligations.
Beyond the conservative investment strategy of such funds set out by regulation, the capital-protection mechanism itself may differ across the approved providers.
In FAB’s case, protection is supported through a) a Capital Reserve, and b) Fee Waiver option.
- The Capital Reserve accumulates up to 1% of Unit NAV per annum to cover shortfalls for members, if EOSB savings are less than the EOSB contributions paid into the Plan, at the time of redemption. Each redeeming member is entitled to receive their pro rata share of the Capital Reserve available as at their redemption date.
- If the Capital Reserve is insufficient, FAB may waive its management fee for that month to help cover the shortfall.
Besides these two protections, the fund documents state that there is no qualified guarantor and no guarantee that 100% of invested capital will be protected. The absence of a 100% guarantee is also observed in the National Bonds Capital Protected Shari’ah Compliant Fund. The prospectuses of Daman Investments and Lunate (the other two approved EOSB providers as of today) are not yet publicly available to ascertain whether the “no guarantee” clause is consistent across all approved providers.
Both funds are denominated in AED and calculate NAV weekly, i.e. the Net Asset Value (after expenses).
Expanding access to Capital-Protected Investments
Importantly, FAB has introduced a dedicated share class that enables eligible individual investors to access its capital-protected investment strategy directly, even if their employer is not enrolled in the EOSB Savings Scheme.
The enhancement broadens access beyond workplace benefit programmes, allowing a wider range of investors to benefit from a conservative investment approach focused on capital preservation, liquidity, low volatility, and attractive yields.
The launch reflects increasing demand for solutions that combine stability, flexibility, and competitive returns within a robust risk management framework.
Fund structure
Each fund has six share classes for different types of EOSB and non-EOSB subscriptions.
- Class A: Basic mandatory employer EOSB contributions for unskilled workers
- Class B: Basic mandatory employer EOSB contributions for skilled workers
- Class C: Additional Voluntary Contributions (AVC) by employees
- Class D: Accrued EOSB from before the employer joined the Plan
- Class E: Employer top ups above the mandatory EOSB contribution rates
- Class F: Direct investment of personal savings by individuals, without employer enrolment
Classes A to E require enrolment through employers. Class F is available to eligible Ordinary and Professional Investors who can subscribe independently and invest their personal savings directly through FAB or any of its distribution partners.
All six classes are similar in terms of investment risk and return. However, Class F requires a minimum initial subscription of AED 10,000. Any subsequent subscriptions should be at least AED 1,000 or multiples thereof. Class F is also the only class subject to a subscription fee, of up to 1%. This is to cover fees payable to FAB’s global or local distribution partners for this particular share class.
There is no redemption fee or performance fee for any share class. Withdrawal of contributions paid by employers (Share Classes A, B, D and E) is possible only when employment ends. When employment ends, the savings in these share classes are redeemed and an equivalent amount is reissued in Class C units which holds employee voluntary contributions. Savings in Class C and Class F can generally be redeemed whenever required by individuals, once a week.
Fund management and governance
The FAB EOSB Plan is professionally managed by FAB Asset Management and supported by a robust governance framework designed to safeguard investors' interests. The fund benefits from independent oversight, strong operational controls, and transparent reporting, providing investors with confidence that their savings are managed in accordance with global best practices.
Designed with a conservative investment approach, the fund focuses on capital preservation, liquidity, and competitive risk-adjusted returns. Investments are primarily allocated to high-quality money market instruments, bank deposits, and short-term fixed income securities, helping to maintain a low-risk profile while generating attractive yields.
Investors benefit from professional portfolio management, daily liquidity, and exposure to a diversified portfolio of high-quality instruments, offering an efficient alternative to holding cash while maintaining a strong focus on preserving capital. FAB Asset Management charges a management fee of up to 0.30% per annum, which is reflected in the fund's Net Asset Value (NAV), ensuring transparency and equitable treatment of all investors.
Further information on the fund's investment strategy, fees, risks, and governance arrangements is available in the official fund documentation. EOSB Fund performance data will be published by Vestora as soon as it becomes available.
Reporting and disclosures
FAB EOSB Plan will issue weekly NAV statements and monthly fund updates through the Fund App. Semi-annual financial reports, material-change reports and an annual audited financial report are among other periodic disclosures mentioned in the fund documents.
Coming soon
A comparison of all relevant information across approved EOSB providers will be available for employers and employees on vestora.ae as more information becomes available.