Following approval granted by the Financial Conduct Authority, the Bulgaria-listed Expat Bulgaria SOFIX UCITS ETF (BGX) has been registered for trade and can be marketed to investors in the UK. The move – the first registration of a financial instrument licensed by the Bulgarian Financial Supervision Commission for trading on a foreign market – is a major step towards raising the international image of the Bulgarian financial sector.

The Expat Bulgaria SOFIX UCITS ETF (BGX) tracks the SOFIX Index, consisting of the 15 largest and most liquid companies on the Bulgarian Stock Exchange (pictured). ©Marcian – Wikipedia.

The Bulgarian lev-denominated fund tracks the SOFIX Index, the main index of the Bulgarian Stock Exchange consisting of the 15 largest and most liquid companies on BSE – Sofia. The companies included in the index must have a capitalization of more than 50 million Bulgarian levs (approx. $27m), a yearly turnover above 2 million Bulgarian levs ($1.08m) and more than 500 shareholders. Constituents are weighted by free float market capitalization.

The largest single holdings are Sopharma (17.0%), Advance Terrafund REIT (11.0%), Chimimport (10.8%), Stara Planina (8.7%) and Monbat (7.3%).

The index is up 6.1% year-to-date (7 March 2017) and has risen an impressive 37.8% over the past year (see graph below).

Source: BSE – Sofia

The ETF, created by Bulgaria’s largest wealth management company Expat Asset Management, is compliant with the UCITS directive of the European Union and is due to be rolled out on the ETF segment of the London Stock Exchange shortly.

The cross-listing of the fund on the London Stock Exchange aims to provide access for global investors to the Bulgarian stock market, boosting larger capital flows from foreign investors to the Bulgarian capital market, which, in turn, may lead to greater interest in the Bulgarian Stock Exchange – Sofia.

Fees on the ETF are 1.00% per annum.