#Hong Kong #Investment Grade #Saudi Sukuk ETF #BOCHK Asset Management

Premia Partners Launches the First Saudi Arabia Government Sukuk ETF in Asia

On May 29, 2025, Premia Partners, a prominent ETF provider based in Hong Kong, made headlines in the financial world with the launch of the Premia BOCHK Saudi Arabia Government Sukuk ETF. This groundbreaking financial instrument marks the first of its kind in Asia, providing investors with an efficient means to access investment-grade sukuk and emerging market fixed-income securities.

Strategic Partnership

In collaboration with BOCHK Asset Management Limited (BOCHKAM), Premia devised this ETF specifically for allocators seeking diversified exposure within the realm of shariah-compliant financial products. This physical replicated ETF allows stakeholders to invest directly in government sukuk, either denominated in Saudi Riyal or US Dollars, thereby facilitating a seamless entry into the lucrative landscape of the Saudi capital market.

Rebecca Chua, Managing Partner of Premia Partners, emphasized the significance of the ETF, stating, "The launch represents a significant milestone and culmination of our year-long preparations to create an efficient tool for international allocators looking for diversification from investment-grade emerging markets and shariah-compliant solutions. In today's market environment, allocators are increasingly prioritizing values derived from well-rounded allocations with uncorrelated returns."

Fund Details and Benefits

The Premia BOCHK Saudi Arabia Government Sukuk ETF (Ticker: 3478.HK for the HKD class and 9478.HK for the USD class) tracks the iBoxx Tadawul Government Agencies Sukuk Index, which exclusively includes sukuk issued by Saudi Arabian government entities. The ETF boasts a remarkably low total expense ratio (TER) of just 0.35% per annum, ensuring cost-effective investment for participants.

Investors can expect stable income and attractive yields. Moreover, the ETF provides diversification benefits, as it exhibits low correlations with prominent bonds and major asset classes—an attractive proposition in today's dynamic economic climate. The fund's focus on A-rated sovereign issuers underscores the potential for reduced risk, backed by Saudi Arabia's robust oil reserves and sound debt levels, all aligned with the ambitions of the Kingdom's Vision 2030 strategic plans.

The Role of Key Players

In support of this significant launch, HSBC has stepped in to offer a comprehensive suite of trustee, global custody, and fund administration services for the ETF in both Hong Kong and Saudi Arabia. Faris AlGhannam, CEO of HSBC Saudi Arabia, remarked, "ETFs have become vital tools for asset managers looking to engage with the emerging Middle East-Asia investment corridor. This landmark transaction reflects the enduring demand among foreign investors for access to Saudi Arabia's transformative economic landscape and the kingdom's debt capital markets."

Additionally, Mohammed Al-Rumaih, CEO of the Saudi Exchange, stated the issuance of the ETF on HKEx symbolizes a critical achievement in enhancing global investor access to the Saudi market, thereby supporting broader portfolio diversification.

In a final note, Kangwei Yang, Director of Fixed Income Product Management at SP Dow Jones Indices, expressed satisfaction in providing the iBoxx Tadawul Government Agencies Sukuk Index to Premia Partners, underscoring the index’s role as a benchmark for shariah-compliant funding sourced from the Saudi government.

About Premia Partners

Founded in 2016, Premia Partners prides itself on creating low-cost, efficient, and innovative ETFs tailored for the Asian market. With an expanding portfolio comprising 12 equity and fixed-income ETFs as of May 29, 2025, the firm aims to provide investment solutions that align with global trends while accommodating local investor needs. For further information, you can visit their official website: www.premia-partners.com.