European independent white-label ETF platform HANetf has announced the debut of its KMEFIC FTSE Kuwait Equity Ucits ETF, which it claims is the first European ETF to offer pure play exposure to Kuwait equities.
It is also the first time a European ETF has been sponsored by a Mena-based asset manager, in this case the Kuwait & Middle East Financial Investment Company (KMEFIC).
In September, Kuwait was upgraded to emerging market status by index provider FTSE Russell, a move which was expected to herald an increased in foreign direct investment. The launch of the ETF will add to this anticipation.
The ETF will be listed on three exchanges – the London Stock Exchange, Borsa Italiana and Deutsche Boerse’s Xetra exchange – and has a total expense ratio of 80 basis points.
It will track the FTSE Kuwait All-Cap 15% Capped Index giving investors exposure to 13 Kuwaiti companies with a combined market capitalisation of $14.6 billion. Any constituent in the index is capped at 15% in order to prevent concentration risk among the larger stocks.
“We hope that this product will be the first of many that will allow foreign investors to participate in Kuwait’s vibrant emerging economy,” said Adel Fahed Al Humaidhi, Chief Executive Officer, KMEFIC.
Hector McNeil, co-CEO, HANetf, added that the launch of the ETF has enabled traditional asset managers “to break into the previously closed club of European ETF issuers, expanding the distribution reach of their investment ideas, offering investors new tools and exposures and creating a more diverse, competitive ETF marketplace”.
He added that the ETF provides a “much-needed solution for European investors to gain exposure to the Kuwaiti companies poised to benefit from a diversifying economy”.
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