Kazakhstan set for first ETF launch

Jul 5th, 2019 | By | Category: Fixed Income

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ITI Funds, the ETF issuing arm of emerging markets specialist Da Vinci Capital Management, is set to launch the first ETF in Kazakhstan.

Iti Funds Kazakhstan ETFs

The fund has listed on Astana International Exchange, becoming the first ETF to be available in Kazakhstan.

The ITI Funds Russia-focused USD Eurobond UCITS ETF is prepped for listing on Astana International Exchange (AIX) and is expected to commence trading later in July under the ticker RUSB.

The fund, which launched on London Stock Exchange in February 2018 and is also available on Moscow Stock Exchange (MOEX), provides exposure to Russian sovereign or corporate dollar-denominated Eurobonds.

It does this through tracking the ITI Funds Russia-focused USD Eurobond Index, calculated by Solactive.

To be eligble for inclusion in the underlying index, eurobonds must have a bullet structure and an amount outstanding of at least $750m. The index limits a maximum of two issues per corporate issuer, and can only track bonds which are equivalent or higher than Russia’s sovereign rating.

The fund comes with an expense ratio of 0.50%.

Gleb Yakovlev, CEO of ITI Funds, commented, “It is our great pleasure to announce listing of units of our ETF fund on the AIX. This listing should make our units more attractive and accessible for local investors while giving us better visibility in Kazakhstan and providing an opportunity to broaden our investors base.”

Tim Bennett, CEO of AIX, added, “We are very pleased to welcome the first ETF issuer on Astana International Exchange. The introduction of ETFs is a part of AIX’s strategy to broaden the options available on the capital market to support the development of the investor base in Kazakhstan.”

ITI Funds also offers a Russian equity ETF – the ITI Funds RTS Equity UCITS ETF – which could potentially follow suit. This fund, which comes with a slightly higher expense ratio of 0.65%, uses physical replication to track the RTS Index, Russia’s oldest and most widely used equity index for equity securities traded on MOEX. The index is currently composed of 40 equity securities of Russia’s top companies by market cap and liquidity.

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