Fund in Abu Dhabi tracking Saudi shares is a first for Gulf ETFs

Fund in Abu Dhabi tracking Saudi shares is a first for Gulf ETFs

The Gulf’s nascent exchange-traded fund industry took another step forward this week with the launch of the first vehicle that invests in stocks from a neighboring country.

Chimera Capital LLC has listed the Chimera S&P KSA Shariah exchange-traded fund in Abu Dhabi. The product will allow traders in the UAE to track Saudi stocks via a local bourse -- a first for the Gulf’s fledgling ETF market.

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The fund tracks the S&P Saudi Arabia Shariah Liquid Top 30 35/20 Capped Index, which is up 44 percent over the past year. The gauge tracks the top 30 largest and most liquid Shariah-compliant stocks listed in Saudi Arabia.

“The next obvious market was Saudi Arabia -- it’s the biggest market in the region,” Sherif Salem, the firm’s chief investment officer of public markets said in an interview.

The fund’s asset under management rose to 70 million dirhams ($19 million) by the end of the week, he said.

Gulf investors can choose between eight different equity-focused ETFs in the region, with three in Saudi Arabia, two in Qatar and three in the UAE. Exchanges in the UAE are stepping up efforts to diversify their product