Dubai: Want to get into UAE stock markets, but don’t know which blue-chips to pick? Try an ETF (Exchange Traded Fund), which have in the global marketplace been the go-to method for investors to access everything from stocks to gold.
Now, investors get an opportunity to access some of the most heavily traded UAE stocks via an ETF – the Chimera S&P UAE UCITS ETF that “replicates and tracks the performance of the S&P UAE BMI Liquid 30/35 Index”. This would mean investors get to track and share the fortunes of the UAE’s leading real estate and banking stocks, which are highly liquid. Plus, there’s an emerging group of stocks that investors are clambering onto in recent months, such as IHC, the Abu Dhabi based holding company for diversified businesses.
The index comprises the “largest and most liquid stocks” listed on ADX, which gives “investors a broad exposure, across all sectors, to the UAE markets”.
The ETF comes from Chimera Capital Ltd.. Operating out of Abu Dhabi Global Market. But why an ETF specifically? The company had launched its first UAE-focussed ETF - Chimera S&P UAE Shariah ETF - in July last, which pulled in Dh50 million in the first six months.
Flying the ETF flag
“ETFs provide investors with a transparent instrument that can be traded just like a stock,” said Seif Fikry, CEO. “Investors can track the price of the ETF through its INAV (indicative net asset value) on ADX and DFM during the trading day, and the ETF’s holdings are published daily on the Chimera website.
“Globally, the ETF market has been growing rapidly and surpassed $8 trillion in assets under management. But in MENA (Middle East and North Africa), there are 16 ETFs that invest in MENA markets, nine of which are listed on MENA exchanges and total $300 million in assets under management.”
The new ETF’s offer period ends today (February 23).
According to Syed Basar Shueb, Chairman of Chimera Capital Ltd., “This second Chimera ETF launch once again demonstrates our ability to leverage our multiple licenses under different fund regimes to roll out various investment options, in turn continuing to play an active role in deepening and developing the country’s asset management space.”
The Chimera S&P UAE UCITS ETF will distribute to investors twice a year any collected dividends.
The UAE market is seeing a bit of volatility in the year-to-date, with investors closely tracking the pandemic and the vaccination and make a guess on how this would tell on the economy and the listed companies. Property stocks have been under pressure, and so have banking blue-chips.
Since the start of the year, DFM and ADX have had five weeks where they closed in the red and four where they trended higher.