HSBC AM lists two Global Sukuk ETFs on the LSE

HSBC Asset Management (HSBC AM) has launched two new Global Sukuk UCITS ETFs on the London Stock Exchange

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By ETFWorld.co.uk

Olga de Tapia, Global Head of ETF & Indexing Sales, HSBC Asset Management

HSBC Global Funds ICAV – Global Sukuk UCITS ETF

The Fund aims to provide regular income and capital growth by tracking as closely as possible the performance of the FTSE IdealRatings Sukuk Index (total return), while maintaining adherence to Shariah principles.

Investment Policy:

The Index is comprised of global Islamic fixed income securities, also known as Sukuk. The Fund invests in, or gain exposure to US Dollar denominated, Investment Grade Sukuk that are Shariah-compliant, and issued in the global markets, all of which are Index constituents. The currency of the Index is USD and returns are unhedged.

The Fund is passively managed and utilises an investment technique called optimisation, which seeks to minimise the difference in return between the Fund and the Index by taking into account tracking error (the risk that the Fund return varies from the Index return) and trading costs when constructing a portfolio. The Fund will not necessarily invest in every constituent of the Index, or invest proportionally to each constituents’ Index weight. If the overall portfolio matches the characteristics of the Index, the Fund can also invest in assets outside of the Index, such as:

securities which are expected to provide similar performance and risk characteristics to certain Index constituents; Sukuk with a Credit Rating of Ba1 BB+ / BB+ and below may be held for efficient portfolio management purposes; and cash and Sukuk with up to 1 year to maturity for liquidity and cash management purposes. When making investment decisions, the Investment Adviser will only proceed with the investment where it complies with Shariah principles.

The Shariah committee monitors the Fund periodically and issues an annual Shariah certificate on the Fund’s compliance with Shariah principles. This certificate is included in the annual report of the Fund as a confirmation of the Shariah compliance for that year. Screening of the Shariah compliance of global Sukuk is based on the methodology of IdealRatings and Sukuk with a maturity of 1 year and above are eligible for investment.

The Fund may invest up to 10% of its assets in cash and may invest up to 10% of its assets in Shariah-compliant funds for efficient portfolio management purposes.

Source: ETFWorld.co.uk