Abu Dhabi, UAE — The launch of Gulf Cooperation Council’s first UAE bond Exchange Traded Fund (ETF), which will list on the Abu Dhabi Securities Exchange (ADX), was announced Thursday by Lunate Capital Limited, an Abu Dhabi-based investment management firm licensed by the ADGM Financial Services Regulatory Authority (FSRA).
The Chimera JP Morgan UAE Bond UCITS ETF will track the performance of the JP Morgan MECI UAE Investment Grade Custom Index, which includes liquid, USD-denominated bonds from the UAE.
The ETF will hold Investment Grade sovereign, quasi-sovereign and corporate bond issues with at least $500 million in face amount outstanding, providing investors with a unique opportunity to invest in the UAE’s robust bond markets.
The ETF, which is fully compliant with UCITS rules, including portfolio holdings diversification requirements, will list on the ADX on 26th March.
It provides global investors access to a diversified portfolio of UAE bonds with low investment requirements. Its listing on the ADX ensures that it trades in a mechanism similar to stocks, providing investors with the ability to buy and sell shares through the trading day at prevailing market prices.
With a total expense ratio of 0.5 percent plus brokerage fees, the ETF is a compelling and cost-effective way to invest in the UAE bond market, with efficient access enabled through ADX and customer brokerage accounts.
Sherif Salem, Partner and Head of Public Markets at Lunate, said, “Our focus at Lunate is to provide our clients with customized solutions and products that can broaden their access to financial strategies and markets.”
“The bond ETF will complement our suite of 13 equity ETFs currently listed on the UAE stock markets – offering investors access to some of the most liquid sovereign and corporate bonds of the country’s leading issuers.”
Abdulla Salem Alnuaimi, Chief Executive Officer of ADX, said, “The listing of this UAE bond ETF underscores ADX’s ongoing dedication to supporting the home market, facilitating new investment opportunities, and expanding UAE’s market accessibility to address growing investors’ needs.”