HSBC Saudi Arabia, the strategic investment affiliate of Saudi British Bank (SABB), has launched its first exchange traded fund in the Middle East region.

The HSBC Amanah Saudi 20 ETF aims to offer investors capital growth over the medium to long-term by replicating the performance of the HSBC Amanah Saudi 20 Equity Index.

The index, created by Standard & Poor’s is made up of the top 20 shariah-compliant Saudi companies listed on Tadawul and comes with a Total Expense Ratio (TER) of 0.75 per cent.

The HSBC Amanah Saudi 20 will use physical replication in tracking its index – thereby unlike synthetic ETFs, will physically own the securities of the index it is tracking.

The individual investors may buy and sell ETF units directly through Tadawul via an authorised broker.

Osama Shaker, managing director and head of Financial Markets, HSBC Saudi Arabia said ETFs have enjoyed a phenomenal global success and continue to rise in popularity.

'HSBC is actively expanding its global ETF product range and is the first global bank to provide access to the Saudi equity market through an ETF, noted Shaker.

'We believe there’s international demand for Saudi exposure and expect that the Saudi economy will continue to grow, driven by high oil prices and historical government reserves as well as improving private sector spending.'

'By putting together a Saudi equity ETF, we are demonstrating our commitment to delivering products that are as transparent and simple,' he added.-TradeArabia News Service