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Lunate Capital launches first UAE Bond ETF in UAE, GCC

ETF provides global investors access to a diversified portfolio of UAE bonds

Lunate Capital Limited, an Abu Dhabi-based investment management firm licenced by the ADGM Financial Services Regulatory Authority (FSRA), and subsidiary of Lunate Holding RSC Limited, announced on Thursday the launch of the Chimera JP Morgan UAE Bond UCITS ETF, the UAE and GCC’s first-ever UAE bond Exchange Traded Fund (ETF) that will list on the Abu Dhabi Securities Exchange (ADX).

The ETF will track the performance of the JP Morgan MECI UAE Investment Grade Custom Index, which includes liquid, US dollar-denominated bonds from the UAE.  The ETF will hold investment grade sovereign, quasi-sovereign and corporate bond issues with at least $500 million in face amount outstanding, providing investors with a unique opportunity to invest in the UAE’s robust bond markets. The ETF, which is fully compliant with UCITS rules, including portfolio holdings diversification requirements, will list on the ADX on March 26.

The first of its kind in the UAE and GCC, the Chimera JP Morgan UAE Bond UCITS ETF provides global investors access to a diversified portfolio of UAE bonds with low investment requirements. Its listing on the ADX ensures that it trades in a mechanism similar to stocks, providing investors with the ability to buy and sell shares through the trading day at prevailing market prices. With a total expense ratio of 0.5 per cent plus brokerage fees, the ETF is a compelling and cost-effective way to invest in the UAE bond market, with efficient access enabled through ADX and customer brokerage accounts.

Sherif Salem, Partner and head of public markets at Lunate, said: “Our focus at Lunate is to provide our clients with customized solutions and products that can broaden their access to financial strategies and markets. The first UAE-focused fixed income product of its kind, the Chimera JP Morgan UAE Bond UCITS ETF will bring accessibility and liquidity to investors, while maintaining our strong conviction in the growth and diversification of the UAE economy. The bond ETF will complement our suite of 13 equity ETFs currently listed on the UAE stock markets - offering investors access to some of the most liquid sovereign and corporate bonds of the country’s leading issuers.”

Abdulla Salem Alnuaimi, chief executive officer of ADX, said, “We are excited and look forward to welcoming Lunate’s Chimera JP Morgan UAE Bond UCITS ETF, the first UAE bond ETF in the GCC region. This new addition marks a significant milestone for ADX, as well as reinforces Abu Dhabi’s role as a leading international financial hub. Lunate’s Chimera UAE Bond ETF provides investors with an exceptional opportunity to enter the fixed-income market, granting investors exposure to a diversified portfolio. It presents a compelling investment option, offering significantly reduced risk and guaranteed returns. The new ETF will enable retail investors the platform to become more actively engaged in the UAE’s continuous growth and its flourishing economy. The listing of this UAE bond ETF underscores ADX’s ongoing dedication to supporting the home market, facilitating new investment opportunities, and expanding UAE’s market accessibility to address growing investors’ needs.”