ZyFin Holdings has listed the world’s first dedicated Turkish sovereign laddered bond ETF, the LAM Alternatif ZyFin Turkey Sovereign Bond UCITS ETF, on the Deutsche Börse and London Stock Exchange.
ZyFin writes that rising interest among domestic and international investors in the Turkish domestic debt markets has led to enhanced liquidity and strength in Turkish sovereign bonds. It is the sixth largest local currency bond market among emerging economies. The ETF is designed to offer international investors low cost and easy access to Turkish sovereign bonds.
The objective of the Fund is to track the performance of the ZyFin Turkey Sovereign Bond Laddered Index which consists of a basket of sovereign bonds issued by the Government of Turkey in Turkish Lira (TRY) across various maturities. Underlying exposure is taken through physical replication and is therefore more efficient in tracking the index.
The Index is comprised of six bonds issued by the Government of Turkey, selected from a universe of all bonds issued by the Government, which have greater than TRY100 million outstanding amount. The bonds are divided into three baskets, with each basket containing two bonds and having a residual maturity closest to a target maturity of two, five and 10 years respectively. Index Securities are issued with fixed- rates and the Index is calculated in USD.
ABank, Turkey, (subsidiary of Commercial Bank of Qatar) will provide local market expertise in the Turkish market with geopolitical and macroeconomic assessments, interest rate trends’ research and local market intelligence. The firm writes that these are all critical elements in Turkish sovereign bond market analysis. “The synergies generated by on the ground expertise of ABank and asset management strengths of ZyFin is expected to add significant value to the product,” the firm says.
Nina Shapiro (Board Member, ZyFin and former VP Finance and Treasurer, International Finance Corporation) says: “With all the global financial volatility over the past few years, the economic growth of Turkey has been all the more impressive. ZyFin is bringing to international investors an interesting opportunity to add Turkish, as well as other emerging market, exposure to their portfolios in an efficient and transparent way.”
Sanjay Sachdev, Executive Chairman of ZyFin, says: “Straddling the continents of Europe and Asia, Turkey's strategically important location has historically being very important. Turkey remains an investment grade destination and has enjoyed sustained GDP growth over the past 16 years with forecasts indicating continued growth of 3.5 per cent in 2016. With research insights from ABank and backed by our expertise in asset management we have structured this attractive investment solution for investors who wish to participate in the growth momentum that we believe will unfold in Turkey.”