Lunate Capital Unveils The First UAE Bond ETF For GCC Investors

Lunate Capital Limited, an investment management firm based in Abu Dhabi and licensed by the ADGM Financial Services Regulatory Authority (FSRA), has announced the launch of a pioneering financial product for the UAE and GCC markets. The Chimera JP Morgan UAE Bond UCITS ETF, a subsidiary of Lunate Holding RSC Limited, is set to be the first UAE bond Exchange Traded Fund (ETF) listed on the Abu Dhabi Securities Exchange (ADX). This ETF is designed to track the J.P. Morgan MECI UAE Investment Grade Custom Index, which comprises liquid, USD-denominated bonds from the UAE, including sovereign, quasi-sovereign, and corporate bond issues with a minimum of US$500 million in face amount outstanding.

The ETF stands out for its compliance with UCITS rules, ensuring portfolio holdings diversification requirements are met. It is scheduled for listing on the ADX on 26th March, offering global investors a unique opportunity to access a diversified portfolio of UAE bonds with low investment requirements. The ETF's structure allows it to trade similarly to stocks, enabling investors to buy and sell shares throughout the trading day at market prices. With a total expense ratio of 0.5 percent plus brokerage fees, it presents a cost-effective option for investing in the UAE bond market.

Sherif Salem, Partner and Head of Public Markets at Lunate, highlighted the ETF's role in providing accessibility and liquidity to investors while supporting the growth and diversification of the UAE economy. "The Chimera JP Morgan UAE Bond UCITS ETF is a significant addition to our suite of 13 equity ETFs currently listed on the UAE stock markets," Salem stated. This move aims to offer investors access to some of the most liquid sovereign and corporate bonds from leading issuers in the country.

Abdulla Salem Alnuaimi, Chief Executive Officer of ADX, expressed enthusiasm about the new listing. "The introduction of Lunate’s Chimera JP Morgan UAE Bond UCITS ETF marks a significant milestone for ADX and reinforces Abu Dhabi’s position as a leading international financial hub," Alnuaimi said. He emphasized that this ETF provides an exceptional opportunity for investors to enter the fixed-income market with reduced risk and guaranteed returns. Furthermore, it enables retail investors to engage more actively in the UAE's economic growth and prosperity.

The listing of this innovative UAE bond ETF underscores ADX's commitment to enhancing market accessibility and introducing new investment opportunities that meet the evolving needs of investors. This development not only strengthens Abu Dhabi's financial market but also offers promising prospects for investors looking to diversify their portfolios with fixed-income products.

With inputs from WAM