Chimera launches Shariah-compliant fund to track Hong Kong-listed Chinese entities

By Arya M Nair, Official Reporter
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Chimera Capital launches Shariah-Compliant ETF
Image Courtesy; WAM

Chimera Capital, an Abu-Dhabi-based investment management firm, has launched the Chimera S&P China HK Shariah Exchange Traded Fund.

The fund is a physical, in-kind, liquid, and fully fungible exchange-traded fund (ETF) that will track the performance of Shariah-compliant Chinese equities listed on the Hong Kong Stock Exchange (HKEX). The initial offering period will commence on 29th May 2023 and end on 2nd June 2023.

The Chimera S&P China HK Shariah ETF, the eighth sub-fund under the SCA-registered Chimera Umbrella Fund, will replicate the performance of the S&P China Hong Kong-listed Shariah Liquid 35/20 Capped Index (AED) (Custom). The index is provided by S&P Dow Jones Indices and the objective is to target 30 Shariah-compliant constituents listed on the Hong Kong Stock Exchange (HKEX).

Syed Basar Shueb_Chimera S&P China HK Shariah Exchange Traded Fund
Syed Basar Shueb
Chairman
Chimera Investment

“The launch of Chimera’s eleventh ETF provides investors on ADX access to one of the world’s biggest and Asia’s fastest-growing markets. The suite of ETFs listed in the UAE now provides investors with access to six countries around the world, underlining Chimera’s continued commitment to playing a frontline role in deepening and expanding the UAE’s capital markets landscape.”

Mr. Abdulla Salem Al Nuaimi, CEO of Abu Dhabi Securities Exchange (ADX), said that “The introduction of the Chimera S&P China HK Shariah Exchange Traded Fund strengthens the Exchange’s position as a leading hub for ETFs in the region. The rapid growth of ADX’s ETF platform reinforces our commitment to keeping providing all ADX investors, particularly retail, with more products aiming to diversify their portfolio and hedge their investment, while also delivering enhanced market liquidity and world-class trading and investment strategies across a diversified set of investment vehicles.”

The Chimera S&P China HK Shariah ETF is an Income Share Class B which is planned for listing on the ADX on 5th June 2023. Future dividends received by the fund will be distributed to investors twice a year, when available.

Mr. Sherif Salem, Chief Investment Officer, Public Markets at Chimera Capital, added that “The Chimera S&P China HK Shariah ETF is our first launch in 2023, the eighth Shariah-compliant ETF in our portfolio, and the first to give investors on the ADX access to one of the most vibrant Asian stock markets. The fund’s holdings include industry leaders such as Alibaba Group Holding, one of the world’s largest eCommerce companies, BYD Company, one of the largest electric car manufacturers, and Tencent Holdings, one of the world’s largest video gaming companies.”

The ETF will be managed by Chimera Capital’s onshore company, Chimera Capital LLC, which is licensed by the Securities and Commodities Authority (SCA) as an investment management company. BNY Mellon will act as the ETFs’ global custodian. Meanwhile, the Authorized Participants (AP) for the fund are International Securities, EFG-Hermes, Arqaam Securities, Daman Securities, and BHM Capital.

Mr. Marius Baumann, Global Head of Custom Indices at S&P Dow Jones Indices, stated that “S&P Dow Jones Indices is pleased to continue working with Chimera Capital LLC on the launch of their new fund tracking the S&P China Hong Kong-listed Shariah Liquid 35/20 Capped Index (AED) (Custom). The index offers the opportunity to access, gain exposure and insights on the performance of Shariah-compliant Chinese companies listed on the Hong Kong Stock Exchange.”

Mr. Hani Kablawi, Chair of International, BNY Mellon, noted that “This latest ETF offering provides further opportunity for investors to access this fast-growing market. As the global custodian for all of Chimera Capital’s ETFs, we continue to support Chimera’s funds with our open architecture platform, ETF expertise and scale.”

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