HSBC AM launches first sukuk ETF in Europe
The ETF tracks the FTSE IdealRatings Investment Grade index, incorporating over 150 Shariah standards.
The HSBC Global Sukuk UCITS ETF launched today (12 September) as a new ETF class of an existing fund that was launched in January 2023.
Sukuks are used to circumvent the interest-paying bond structure prohibited under Shariah law, with issuance reaching $193.9bn in 2022, according to data from Refinitiv.
With a total expense ratio of 0.7%, the ETF tracks the FTSE IdealRatings Investment Grade index, incorporating over 150 Shariah standards.
The index is subject to oversight by a team of Shariah scholars and designed to meet Accounting and Auditing Organization for Islamic Financial Institutions standards as a minimum.
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The ETF adds to HSBC AM's suite of Shariah-compliant products, having developed its passive Islamic investing team over 20 years, most recently launching five Shariah ESG equity ETFs last November.
Olga de Tapia, global head of ETF and indexing sales at HSBC AM, said: «As the first ETF of its kind available in European markets, our new sukuk ETF share class builds on our long-term commitment to serving Islamic investors worldwide and will allow HSBC AM to meet growing global demand for an innovative range of Islamic passive products, either as standalone investments or as part of broader Shariah-compliant multi-asset portfolios.»
She said: «This should provide choice to Islamic investors enabling them to build a range of different portfolios, with different risk characteristics, on the same terms as conventional investors.»
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