Chimera Capital, an Abu-Dhabi-based asset management firm and subsidiary of Chimera Investments, has launched the Chimera S&P UAE Shariah Exchange Traded Fund, a physical, in-kind, liquid and fully fungible ETF.
Under the UAE’s Securities and Commodities Authority’s (SCA) Fund Regime, Chimera Umbrella Fund (the first SCA umbrella fund to be launched in the UAE) will launch its first sub-fund tracking a Shariah compliant index in conjunction with S&P Dow Jones Indices.
The ETF has been designed to replicate the S&P UAE Domestic Shariah Liquid 35/20 Capped Index (Bloomberg: SPSHDAAP). The index is provided by S&P Dow Jones Indices and tracks the performance of UAE-based Shariah compliant liquid equities, opening up a new and increasingly demanded asset class to investors seeking exposure to the UAE’s economy.
The Chairman of Chimera Capital, says: “We are very pleased to bring to market the first ETF tracking a Shariah-compliant index in the UAE.” Chimera S&P UAE Shariah ETF currently has two share classes, including an accumulating Class A, which will be listed on the Abu Dhabi Securities Exchange (ADX), and which reinvests income back into the fund at no additional expense, and a distributing Class B, which will be listed on the Dubai Financial Market (DFM), and distributes to investors any collected dividends.”
The Chimera S&P UAE Shariah ETF will be managed by Chimera’s onshore company, Chimera Capital LLC, which is licensed by SCA as an investment management company with approval to establish and manage investment funds. Meanwhile, HSBC Middle East ltd will act as local custodian, while BNY Mellon’s London branch will act as the ETF’s global custodian. Authorised Participants for the fund include EFG Hermes UAE Limited, Shuaa Securities, and BH Mubasher.
HE Khalifa Al Mansouri, Chief Executive of the ADX, says: “ADX congratulates Chimera Capital LLC for developing this product, the first in the UAE to offer a tailored Shariah-compliant index for investors. With a primary listing on ADX, it is a new opportunity for them to add variety to their portfolios and manage risk more effectively. Influential investment firms such as Chimera Capital LLC continue to be attracted by the well-regulated status of ADX and the number of companies applying to be listed is undoubtedly on the rise. They will benefit from improved access to capital to fund their strategic ambitions and growth plans under our well-established market and regulatory infrastructure, facilitating the ease of listing of a variety of asset classes.”
Hassan Al Serkal, Chief Operating Officer (COO) and Head of Operations Division of DFM, says: “In line with our strategy to provide investors with diversified investment products, the Dubai Financial Market (DFM) is delighted to welcome this significant step from Chimera Capital LLC. The diversification of our product offering, including the rapidly growing global ETF sector, is one of the key pillars of DFM’s strategy, which enabled us to list the first ETF in 2016. We look forward to seeing this drive gain further momentum supported by DFM’s world-class infrastructure as well as its favourable and attractive regulations for the listing and trading of ETFs and other asset classes in cooperation with the regulatory authority and investment institutions.
“The listing of the distributing Class B of Chimera S&P UAE Shariah ETF will provide the DFM’s large and diversified base of local and international investors with a new product to invest in companies represented in the S&P UAE Domestic Shariah Liquid 35/20 Capped Index. Undoubtedly, this step will further strengthen the leading position of the DFM as the first Shariah-compliant exchange globally, a position it has held since 2007.”
The Chairman of Chimera Capital says: “The ETF will open up a new wholesale investment opportunity to a unique investor profile. The Chimera S&P UAE Shariah ETF allows investors to capitalise on the prospects of the UAE’s economy while staying true to the principles of Shariah, and with the added flexibility of choosing between regular portfolio returns or maximising future investment returns thanks to the ETF’s dual share class option.
“We are delighted for Chimera Capital LLC to be the first asset manager to launch an ETF under the SCA’s fund regime, and for the Chimera Umbrella Fund to be the first umbrella fund to launch under the SCA’s fund regime in the UAE. Our strategy will see us fully capitalise on this unique opportunity while simultaneously contributing to the development of the UAE’s asset management space through continued collaboration with the various regulators. We appointed BNY Mellon as our ETF’s global custodian due to the quality of their ETF-specific technology, scale and expertise, as well as their commitment to the ETF market in the Middle East and other markets around the world.”
Anthony Habis, Head of Middle East and Africa at BNY Mellon, says: “We are honored that Chimera Capital LLC has appointed BNY Mellon as global custodian for this innovative new fund, which is not only the first SCA umbrella fund but the first SCA ETF.”
Marius Baumann, Global Head of Custom Indices at S&P Dow Jones Indices, adds: “We are pleased that Chimera Capital LLC has chosen a S&P Shariah-compliant index to launch its exchange-traded fund. S&P Dow Jones Indices is committed to offering global market participants indices, data and analytics to better align investors’ investments with their values.”
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