Abu Dhabi-based asset manager Lunate Capital is set to expand its Irish-domiciled ETF line up with the launch of a quantum computing ETF.
The Boreas Solactive Quantum Computing UCITS ETF (QUANTM) will list on the Abu Dhabi Securities Exchange on 22 September with a total expense ratio (TER) of 0.49%.
QUANTM will track the Solactive Developed Quantum Computing index which offers exposure to 25 companies involved in the production of quantum computing hardware, quantum software and algorithms and quantum communication.
As the theme is in its early stages, the basket features pure play stocks such as IonQ and Rigetti, as well as firms tied to the research and development of quantum computing such as Microsoft, Nvidia and IBM.
Alongside QUANTM, the firm offers four equity UCITS ETFs providing exposure to the United Arab Emirates (UAE), Pakistan, Japan and Germany, as well as one fixed income UCITS ETF focused on UAE bonds.
Sherif Salem, partner and head of public markets at Lunate said the firm opts for the UCITS umbrella when Sharia-screening would exclude too many major companies from the ETF.
A Sharia-compliant ETFs typically filter out heavily indebted companies, as well as firms involved in non-permissible activities such as gambling, weapons or alcohol.
Salem explained, “We generally prefer to launch Sharia-compliant ETFs under the local [UAE] umbrella. However, if the Sharia screening filters out too many companies – especially well-known names that make the product less marketable – we opt for a [UCITS] ETF instead.”
The firm’s maiden ETF – the Irish domiciled Chimera S&P UAE UCITS ETF – launched in 2021. Salem explained this was due to UAE ETF regulations not being in place at the time.
“While we were working with the regulator in terms of coming up with those regulations, we thought that the easiest and fastest way to launch an ETF was to apply for UCITS,” he explained.