On Friday, an ETF based on domestic stocks opened for subscription to the Abu Dhabi Securities Exchange (ADX). The vehicle has been established to assist in funneling investment from the gulf into India—it is the fifth largest market on Earth – and a country that already hosts an estimated 4 million expatriate Indians.
The Chimera S&P India Shariah ETF subscription will remain open until January 17, and the ensuing listing on ADX is scheduled for January 26. Lunate Capital, Abu-Dhabi-based, is launching this fund.
The ETF will track the performance of the S&P India Shariah Liquid 35/20 Capped Index. It contains the 30 most liquid Shariah-compliant Indian shares, such as Reliance Industries, Infosys, and Tata Consultancy Services.
It assigns the highest weightage, 35.4 percent, to the IT sector and energy, with a total of 25.10%. Sectors such as banking, gambling, and alcohol are usually excluded because they do not comply with the Shariah.
The ETF aims at the semi-annual distribution of dividends. S&P India Shariah Liquid 35/20 Capped Index was up almost 19 percent in AED terms over the past year. The “Chimera S&P India Shariah ETF” is yet another option.
It provides investors on the ADX with direct access to the world’s fifth-largest stock market and one of its fastest-growing economies globally. This ETF also complies with Shariah, attracting a wider category of investors who value the need to comply with Islamic financial principles.
“The Chimera S&P India Shariah ETF extends an additional dimension to the UAE’s growing range of ETFs available for investors, as they can now have direct access into eight different country markets worldwide,” Sherif Salem, Partner and Head of Public Markets at Lunate.
By 2023, The trading volumes of ETFs at ADX stood above AED 5 billion (Rs. 11,300 crore), marking a 160 percent increase from the previous year. BNY Mellon will be the ETFs’ global custodian.
As Hani Kablawi, the Head of International BNY Mellon, said- “With this latest ETF offering, investors get another chance to participate in one of the fastest growing markets. We continue to support Lunate’s funds with our open architecture platform, ETF expertise, and scale as the global custodian for all of AMC Investments ‘ETFs.
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