India equity ETF set to debut on Abu Dhabi bourse

An exchange traded fund investing solely in Indian equities is set to debut on the Abu Dhabi bourse, suggesting Middle Eastern investors’ strong interest in deploying money to Asia’s second-largest market.

Abu Dhabi-based asset manager Lunate Capital plans to roll out the Chimera S&P India Shariah ETF, which will target large shariah-compliant Indian companies listed on the Bombay Stock Exchange on January 26.

The ETF will replicate the performance of the S&P India Shariah Liquid 35/20 Capped Index, which counts 30 of the most liquid Indian companies, including Reliance Industries, Infosys and Tata Consultancy Services, among its constituents.

Lunate’s Chimera S&P India Shariah ETF is open for investor subscription from January 12 to 17. It will be listed on the Abu Dhabi Securities Exchange on January 26.

This article was previously published by Ignites Asia, a title owned by the FT Group.

It will be managed by Lunate, with BNY Mellon serving as its global custodian.

The ETF will be listed some two months after CSOP Asset Management unveiled the CSOP Saudi Arabia ETF in Hong Kong as the first ETF with single-country exposure to the Saudi market listed in Asia Pacific.

Lunate in May had also launched the Chimera S&P China HK Shariah ETF, a shariah-compliant ETF tracking Hong Kong-listed Chinese equities. Both Lunate ETF offerings are sub-funds of the Chimera Umbrella Fund.

“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,” said Sherif Salem, partner and head of public markets at Lunate.

“This ETF is also shariah-compliant, which will appeal to a broader range of investors who prioritise adherence to Islamic financial principles,” he added.

The launch of Lunate’s Indian offering comes as managers in the Asia-Pacific have increasingly turned to investors in the Middle East to raise money.

Latest news on ETFs

Visit the ETF Hub to find out more and to explore our in-depth data and comparison tools helping you to understand everything from performance to ESG ratings

The Shenzhen Stock Exchange, one of the two major bourses in mainland China, is currently in negotiations with the Saudi Tadawul Group, which manages the Saudi Exchange, to bring its ETF Connect scheme to the market.

Chinese and Hong Kong fund companies have been turning their attention towards big institutional investors in the Middle East to seek targets for their China-focused investment strategies, with senior fund professionals flying to the region more regularly and some even considering setting up an office there.

Shanghai-headquartered Hywin Wealth is also weighing up opening an office in the Middle East, Lawrence Lok, Shanghai-based chief financial officer, told Ignites Asia.

Meanwhile, Singapore’s Farro Capital unveiled its Dubai office last month.

*Ignites Asia is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at ignitesasia.com.