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HSBC Asset Management launches Shariah-compliant global Sukuk UCITS ETF: HBKU

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HSBC Asset Management (HSBC AM) has further expanded its ETF and indexing product suite with the launch of a new Global Sukuk UCITS ETF.

The HSBC Global Sukuk UCITS ETF, a new ETF share class of an existing fund that was launched in January 2023, listed on 12 September on the London Stock Exchange. The firm writes that it is the first Sukuk ETF to be listed in Europe.

The firm writes that this launch builds upon HSBC AM’s commitment to serving Islamic investors worldwide, utilising the extensive expertise in Passive Islamic investing it has developed and applied in practice over more than 20 years.  

The ETF aims to track the FTSE IdealRatings Investment Grade Index, which incorporates more than 150 Shariah standards, and is also subject to oversight by a team of Shariah scholars with extensive expertise in designing Shariah compliant investment products. It is designed to meet Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards as a minimum.

This provides investors with comprehensive exposure to the global Sukuk market, while enabling Islamic investors to gain fixed income equivalent exposure with the comfort that high standards have been applied when selecting eligible Sukuk investments.

Under the IdealRatings methodology, any Sukuk which fails to comply with mandatory Shariah standards will not be deemed Shariah-compliant and will be excluded from the Index.

Olga de Tapia, Global Head of ETF & Indexing Sales, HSBC Asset Management, says: “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. 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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