HSBC Saudi Arabia, SABB's strategic investment affiliate, has launched the HSBC Amanah Saudi 20 Exchange Traded Fund (ETF), the first ETF from HSBC in the region.
The HSBC Amanah Saudi 20 ETF, aims to offer investors capital growth over the medium to long-term by replicating the performance of the HSBC Amanah Saudi 20 Equity Index.
The index, created by Standard & Poor's is made up of the top 20 Shariah-compliant Saudi companies listed on Tadawul and comes with a total expense ratio (TER) of 0.75 percent.
The HSBC Amanah Saudi 20 ETF will use physical replication in tracking its index -- thereby unlike synthetic ETFs, will physically own the securities of the index it is tracking.
Individual investors may buy and sell ETF units directly through Tadawul via an authorized broker.
Osama Shaker, managing director and head of Financial Markets, HSBC Saudi Arabia, said: "ETFs have enjoyed a phenomenal global success and continue to rise in popularity. HSBC is actively expanding its global ETF product range and is the first global bank to provide access to the Saudi equity market through an ETF. We believe there's international demand for Saudi exposure and expect that the Saudi economy will continue to grow, driven by high oil prices and historical government reserves as well as improving private sector spending. By putting together a Saudi equity ETF, we are demonstrating our commitment to delivering products that are as transparent and simple."
© Arab News 2011
