The $925 billion Saudi Public Investment Fund has seeded a Saudia Arabia-focused exchange-traded fund managed by State Street Global Advisors with $200 million. According to the asset manager, the ETF is the first Saudi Arabian fixed-income undertaking for collective investment in transferable securities ETF made available in Europe.
According to a State Street fact sheet, the objective of the SPDR J.P. Morgan Saudi Arabia Aggregate Bond UCITS ETF is to track the performance of liquid, U.S. dollar-denominated sovereign and “quasi-sovereign instruments” and Saudi riyal-denominated Sukuk government bonds from Saudi Arabia. Sukuk government bonds are Islamic financial certificates that comply with Islamic, or Sharia, law.
The ETF, launched in December 2024, is a sub-fund of SSGA SPDR ETF’s Europe I and is listed on the London Stock Exchange and the Deutsche Börse’s Xetra in Frankfurt, Germany. The ETF tracks the newly created J.P. Morgan Saudi Arabia Aggregate Index and is intended to provide investors with access to Saudi financial instruments.
As of January 30, the fund held $248.9 million, which means the Saudi PIF’s investment accounts for more than 80% of the fund’s total asset value.
“PIF’s investment into the first internationally listed fixed-income Saudi ETF further deepens the Saudi market, while attracting investors and strengthening cross-geography partnerships, increasing international investment in Saudi Arabia,” Yazeed Al-Humied, PIF’s head of Middle East and North Africa investments, said in a statement.
The ETF is the sovereign wealth fund’s second deal involving a Saudi Arabian ETF in the past several months. In October 2024, the Saudi PIF announced a memorandum of understanding with Japan’s Mizuho Financial Group to launch an ETF in Japan that invests in the Saudi Arabian equity market.
The One ETF FTSE Saudi Arabia Index was launched last December by Mizuho subsidiary Asset Management One. It had an initial market capitalization of more than $100 million, which according to Mizuhi, makes it the largest ETF on the Tokyo Stock Exchange that invests exclusively in the Saudi Arabian equity market.
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Tags: bond ETF, ETF, Saudi Public Investment Fund, Saudia Arabia, Sovereign Wealth Fund, State Street Global Advisors, sukuk, UCITS