Abu Dhabi-based asset manager Chimera Capital has unveiled a new ETF in the United Arab Emirates providing exposure to companies listed on the federation’s three domestic stock exchanges. Chimera Capital has unveiled its second ETF.
The Chimera S&P UAE UCITS ETF is set to list on the Abu Dhabi Securities Exchange with a distributing share class (CHAEIM UH) and on the Dubai Financial Market with an accumulating share class (CHAE UH).
The fund tracks the S&P UAE BMI Liquid 20/35 Capped Index using direct physical replication.
The index, created by S&P Dow Jones Indices, measures the performance of UAE-listed stocks with sufficient liquidity while limiting concentration in the largest constituents.
The index consists of stocks listed on Abu Dhabi Securities Exchange, Dubai Financial Market, or NASDAQ Dubai that have average daily trading values of at least $500,000 and no more than ten non-trading days over the previous quarter.
Constituents are weighted by float-adjusted market capitalization subject to a cap of 35% on the largest position and 20% on any other stock. The index is rebalanced on a quarterly basis.
As of the end of January, the index contained 22 stocks although 91% of the portfolio was concentrated within the top ten positions.
Stocks from the financials sector accounted for over half (56.2%) of the index weight with the next largest sector exposures being real estate (17.8%), communication services (17.0%), and consumer discretionary (4.9%).
The ETF comes with an expense ratio of 1.00% and will be supported by BNY Mellon, which will act as custodian. International Securities, EFG Hermes UAE, BH Mubasher Financial Services, and Arqaam Securities will act as authorized participants.
Syed Basar Shueb, Chairman of Chimera Capital, said: “We are excited to bring this new UCITS-regulated product to market, which will give investors further access to the increasingly appealing UAE economy. 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.”
Saeed Hamad Al Dhaheri, Chief Executive of the Abu Dhabi Securities Exchange, said: “ADX is broadening its suite of products and services to provide global investors with high-quality access to the full breadth of opportunity in Abu Dhabi’s high-growth economy. The Chimera S&P UAE UCITS ETF is the second ETF backed by Chimera Capital to be listed on the ADX and follows the gold standard of regulatory frameworks for funds and asset managers.”
Anthony Habis, Head of Middle East and Africa at BNY Mellon, said: “It is an exciting time for the asset class with the growth of the ETF industry at an all-time high in the region. We are honoured that Chimera has chosen BNY Mellon to support its new Chimera S&P UAE UCITS ETF with our open architecture platform, ETF expertise, and scale.”
Marius Baumann, Global Head of Custom Indices at S&P Dow Jones Indices, said: “We are pleased to support Chimera Capital Limited in the launch of the ETF tracking performance of liquid UAE listed stocks. Through S&P Dow Jones Indices’ innovative solutions, our clients are able to capture investment opportunities.”
The fund’s launch comes roughly seven months after Chimera Capital introduced its first ETF, which was also the first ETF ever to list in the UAE. The Chimera S&P UAE Shariah ETF tracks the S&P UAE Domestic Shariah Liquid 35/20 Capped Index which currently consists of 13 companies selected from the above index that have been deemed Halal by a specialist Islamic investment consultancy. The ETF also comes with an expense ratio of 1.00%.