Abu Dhabi's Chimera Capital unveils Sharia-compliant fund tracking Turkish equities

ADX-listed ETF will give investors direct access to companies listed on the Borsa Istanbul stock market

Turkish traders at the Borsa Istanbul stock exchange. The newly launched Chimera S&P Turkey Sharia ETF will be listed on the ADX. EPA

Chimera Capital, an Abu Dhabi asset management company and subsidiary of Chimera Investments, has unveiled a Sharia exchange-traded fund (ETF) focused on Turkey's equity market.

The Chimera S&P Turkey Sharia ETF is a liquid, fully fungible fund that will track the performance of Turkey's listed, Sharia-compliant securities, the company said on Monday.

It will be listed on the Abu Dhabi Securities Exchange, the Arab world's second-largest stock market by market value.

“The launch of Chimera Capital’s ninth ETF further broadens the range and diversity of the company’s listed ETF products, which give investors access to multiple stock markets, and contributes to the further deepening and expanding of the UAE capital markets,” said Chimera Capital chairman Syed Shueb.

ETFs are a basket of securities comprising stocks, bonds, commodities or other financial assets that track global markets. They are popular with retail investors because of their low fees and easy access to a range of diverse assets.

Chimera's latest fund will track the performance of the S&P Turkey Sharia Liquid 35/20 Capped Index.

The index, provided by S&P Dow Jones Indices, tracks the performance of the most liquid Sharia-complaint stocks listed on the Borsa Istanbul.

The new ETF is an Income Share Class B. Future dividends received by the fund will be distributed to investors, as available, the company said.

Bourses in the GCC region are hastening efforts to diversify their product offerings to attract more foreign direct investment and boost trading activity.

“We work towards enhancing market liquidity and making ADX a regional hub for a broad array of sector and geographically focused ETFs,” said ADX managing director and chief executive Saeed Al Dhaheri.

“ADX continues to execute its strategy of introducing the widest array of products and services to provide investors with more flexibility and greater opportunities for hedging and diversification.”

Chimera recently listed two US Sharia-compliant ETFs in July, while two other ADX-listed ETF launches — the Chimera S&P KSA Sharia ETF and the Chimera S&P Kuwait Sharia ETF — were completed earlier this year.

There are now nine ETFs listed on UAE stock markets, giving investors access to five different stock exchanges, Mr Al Dhaheri said.

Chimera Capital unveiled the first ETF tracking a Sharia-compliant index through the UAE’s two main stock exchanges in August 2020.

The Chimera S&P UAE Sharia ETF has two different share classes that track a Sharia-compliant index compiled from stocks listed in Abu Dhabi and Dubai.

“The Chimera S&P Turkey Sharia ETF will provide investors with easy and direct access to capitalise on Turkey’s large and highly diversified economy,” said Sherif Salem, chief investment officer responsible for public markets at Chimera Capital.

It will be managed by Chimera Capital’s onshore company, Chimera Capital LLC, which is licensed by the Securities and Commodities Authority as an investment management company.

BNY Mellon will act as the ETFs’ global custodian. Authorised participants are International Securities, EFG-Hermes, Arqaam Securities Daman Securities and BHM Capital.