New exchange traded fund to list on ADX will track Sharia-compliant Indian stocks

Dubai: A new exchange traded fund (ETF) will list on Abu Dhabi’s ADX to track the performance of Indian stocks on Bombay Stock Exchange (BSE).

Lunate Capital llc, licensed by UAE’s Securities & Commodities Authority (SCA), is the backer of ‘Chimera S&P India Shariah ETF’, which will be a liquid and ‘fully fungible’ ETF. The listing is scheduled for January 26.

The Fund will track the performance of Shariah-compliant Indian equities listed on BSE. Investors can subscribe through the six 'authorized participants' as well as the ADX eIPO portal from January 12 to January 17, 2024.

The Index - provided by S&P Dow Jones Indices - tracks the performance of the 30 most liquid Shariah-compliant Indian stocks listed on the Bombay Stock Exchange. Current constituents include Reliance Industries, Infosys, and Tata Consultancy Services.

The Chimera S&P India Shariah ETF will replicate the performance of the S&P India Shariah Liquid 35/20 Capped Index. India's Sensex was up around 19 per cent for 2023, which makes it the second-best performance since 2017. 

The Fund is an income share Class B, and dividends received by it are intended to be distributed on a semi-annual basis.

“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 prioritize 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.”

The ETF will be managed by Lunate Capital, while BNY Mellon will act as the ETFs’ global custodian.

ADX and ETFs

In 2023, ADX’s trading values featuring ETFs was over Dh5 billion, a 160 per cent increase year-on-year. Trading volumes reached 1 million units, which was a 205 per cent annual growth.

"These results underscore Abu Dhabi's position as a thriving capital hub and ADX’s role in offering retail and institutional investors strategic solutions to strengthen and diversify their portfolios locally and globally,” said Abdulla Salem Al Nuaimi, CEO of Abu Dhabi Securities Exchange.