HSBC Amanah, the financial group's Islamic division, said it will start marketing its first Islamic bond fund on Monday as it bids to tap into investors' appetite for the asset class. The HSBC Amanah Sukuk Fund, domiciled in Saudi Arabia, will comprise Islamic bonds, or Sukuk, issued by 12 to 14 companies, mostly in the real estate, commercial banking and utilities sectors based in the Gulf Cooperation Council (GCC) area. An HSBC spokeswoman said on Friday it would seek to raise $100 million for the fund, which has a four-year maturity and will target mid- to high-single-digit annual returns. Three quarters of the bonds will be issued by corporates with the balance issued by GCC governments. The Sukuk market boomed in 2007, reaching $33.1 billion, but slowed down in 2008. The market is expected to pick up in the second part of the year and last month Indonesia raised $650 million through a sovereign Sukuk and the issuance was subscribed seven times over. Unlike a mainstream bond, Sukuk generate income for its holders without paying interest. Most of the Sukuk included in the HSBC fund will be lease and buy back structures, known as Ijara. The fund will use private banks in Saudi Arabia and the rest of the GCC as sales intermediaries and will invite investments in dollars, Saudi riyals, Qatari riyals and the Emirati dirhams.