 "India exchange-traded fund debuts on Abu Dhabi Securities Exchange")
An exchange traded fund (ETF) based on domestic stocks opened for subscription on Abu Dhabi Securities Exchange (ADX) on Friday. The fund will help channel investments into India—the fifth largest market globally—from the Gulf nation, which has an estimated 4 million Indian expatriates.
The subscription for the Chimera S&P India Shariah ETF will remain open until January 17 and the ETF will then list on the ADX on January 26. The fund is being launched by Abu-Dhabi-based Lunate Capital. The ETF will replicate the performance of the S&P India Shariah Liquid 35/20 Capped Index. It comprises 30 most liquid Shariah-compliant Indian stocks, which includes Reliance Industries, Infosys, and Tata Consultancy Services. The index has the highest weightage to the IT sector at 35.4 per cent followed by energy at 25.1 per cent. Typically, sectors such as banking, gambling and alcohol are excluded as they are not Shariah-compliant.
The ETF intends to distribute dividends on a semi-annual basis.
S&P India Shariah Liquid 35/20 Capped Index has rallied nearly 20 per cent in the past one year in AED terms.
“The Chimera S&P India Shariah ETF offers investors on the ADX direct access to the world’s fifth-largest stock market and one of the fastest growing economies globally. This ETF is also Shariah-compliant which will appeal to a broader range of investors who prioritise adherence to Islamic financial principles. The Chimera S&P India Shariah ETF enhances the range of ETFs available to investors in the UAE, now giving them direct access to markets in eight different countries worldwide,” said Sherif Salem, Partner and Head of Public Markets, Lunate.
In 2023, ADX’s trading volumes of ETFs exceeded AED 5 billion (Rs 11,300 crore), marking a 160 per cent increase from the previous year.
BNY Mellon will act as the ETFs’ global custodian.
Hani Kablawi, Head of International, BNY Mellon, said, “This latest ETF offering provides further opportunity for investors to access this fast-growing market. As the global custodian for all of Lunate Capital’s ETFs, we continue to support Lunate’s funds with our open architecture platform, ETF expertise and scale.”
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