ADX’s ETF market exceeds $381 million in traded value

Index-tracking funds are popular with retail investors because they offer low-cost, diversified asset options

The Abu Dhabi Securities Exchange has accelerated efforts to diversify its product offerings, including low-cost exchange traded funds, to boost trading activity. Reuters

The combined trading value of index-tracking exchange-traded funds (ETFs) listed on the Abu Dhabi Securities Exchange (ADX) has surged to more than Dh1.4 billion ($381.2 million) so far this year, as investors continue to seek low-cost, diversified investment options.

The year-to-date growth in the trading value of ETFs was driven by more than 11,400 trades in 227 million units, the stock exchange said on Tuesday.

“Reaching this new milestone on the exchange’s ETF market demonstrates the success of the ADX strategy in diversifying our suite of investment products available to investors on the exchange,” said Saeed Hamad Al Dhaheri, managing director and chief executive of ADX.

“ADX is committed to enhancing market efficiency and sustainable growth.”

ETFs are a basket of securities consisting of stocks, bonds, commodities or other financial assets that track global markets.

They are popular with retail investors because of their low-cost fees and easy access to a range of diverse assets.

Bourses in the GCC region are accelerating efforts to diversify product offerings to attract more foreign direct investment and boost trading activity as their economies recover from coronavirus-induced headwinds.

In October, ADX said trading values for ETFs in the first nine months of the year increased more than eightfold to Dh886.9 million, from Dh105 million in the same period last year.

The ADX listed its first ETF in August 2020. Since then, the number of ETFs listed on the exchange has grown to seven.

An eighth fund — the Chimera FTSE ADX 15 ETF — will list on the ADX on November 24.

The initial offer period for the Chimera FTSE ADX 15 ETF — an income share Class B — will begin on November 21 and end on November 23, Chimera Capital, an Abu Dhabi asset management company and subsidiary of Chimera Investments, said in on Thursday.

Future dividends received by the fund, which is provided by FTSE Russell and tracks the 15 biggest and most liquid stocks listed on the ADX, will be distributed to investors twice a year.

“This is the sixth ETF launched by Chimera in 2022, and the 10th fund to be rolled out in just over two years,” said Sherif Salem, chief investment officer of public markets at Chimera Capital.

“The suite of ETFs now provide local and regional investors with access to some of the fastest-growing and most attractive stock markets in the world.”

Meanwhile, investor confidence recovered in October as global ETFs gained €111 billion ($115.6 billion) — a more than threefold increase on the previous month when flows were at €34 billion, Amundi Asset Management said in its November ETF Flows Analysis report on Wednesday.

“This was the first time there were inflows of over €100 billion since March this year,” it said.

The US was the most active market in October, adding €88.4 billion to ETFs, while Asian investors allocated €13.7 billion and Europeans invested €9 billion, Amundi, Europe’s biggest asset manager, said.