Premia BOCHK Saudi Arabia Government Sukuk ETF

Offering Hong Kong-listed exposure to a selection of Islamic instruments issued by Saudi government and agencies, the Premia BOCHK Saudi Arabia Government Sukuk ETF is in itself not certified to be a fully Shariah compliant investment opportunity.

The prospectus clearly notes that fund manager Premia Partners can invest up to 20% of the NAV in derivatives – with the same cap upon entering securities lending transactions – when seeking to match the iBoxx Tadawul Government & Agencies Sukuk Index (SAR Unhedged) TRI performance.

Such qualifiers aside, being HKEX-listed in both US and Hong Kong dollars means this passively-managed ETF provides access to a segment of the sovereign Sukuk market that has historically been difficult to reach outside local Islamic platforms.

With an investment advisory delegated to BOCHK Asset Management, the fund adopts a representative sampling strategy for Tadawul-listed Sukuk securities issued by Saudi Arabian government and agencies.

The fund manager can also hold securities not included in the index as well as other ETFs that predominantly invest in Sukuk – provided these collectively feature a high correlation with the benchmark index.

In exceptional circumstances, the fund manager can invest in financial derivative instruments for hedging and non-hedging – aimed at reducing tracking errors – which include the use of instruments such as fully funded swaps, like total return swaps, “to acquire exposure to the performance of the index when liquidity in the market is low.”

Money market fund investments can be conducted up to 5% of the NAV, following the fund’s launch on the 27^th May 2025. Income is distributed quarterly. While the fund’s base currency is in SAR and the trading currency is in US and Hong Kong dollars, all units receive distributions in US dollars.

The sub-fund of the Premia ETF Series, an umbrella unit trust, is run as a separate pool – to be invested and administered separately from the other trust assets. All sub-funds will be ETFs listed on the HKEX.

*Disclaimer: The opinions and viewpoints expressed in this Fund Profile do not constitute recommendations for any funds highlighted. The information presented is not investment advice and should not be treated as such.

Source: Premia Partners