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PIF buys into Saudi’s first broad-based equity ETF: The Public Investment Fund (PIF) participated as an anchor investor in the newly-listed and first broad-based Shariah-compliant local exchanged-traded fund (ETF) on Tadawul from Albilad Capital, dubbed Albilad MSCI Saudi Equity Fund ETF, according to two separate statements (here and here). The open-ended fund tracks the MSCI Saudi Equity Index, covering over 250 stocks across the main and parallel markets.
The rationale: The move plays into PIF’s agenda to deepen liquidity and grow the Kingdom’s asset management market — which is on track to hit the USD 500 mn mark by 2030 according to an earlier Fitch report.
Albilad Capital completed theAlbilad MSCI Saudi Equity ETF IPO (pdf) earlier this month, raising SAR 316 mn, Argaam reported. Units were listed on Tadawul’s main market last week. The fund, which is classified as high-risk due to its 100% equity exposure and market volatility, fully replicates the MSCI Saudi Arabia Domestic Islamic Index formed of over 250 companies covering small, mid and large-cap stocks across the main and the parallel markets. Albilad Capital acting as both fund manager and market maker, Riyadh Capital as custodian, and PwC as auditor.
SOUND SMART- Why it’s a first: The Albilad MSCI Saudi Equity ETF is the first locally listed, broad-based equity fund to track an MSCI Saudi benchmark, giving investors exposure to the full domestic market (from large caps to smaller growth stocks) under a Shariah-compliant structure. Previous ETFs in the Kingdom were either sector-focused or linked to narrow thematic indices.
One more notch in Albilad’s ETF lineup: The new listing brings Albilad Capital’s total number of ETFs on the Saudi market to seven, with products spanning fixed income, commodities, global equities, and sector-focused funds, making it one of the most active issuers in the space. Albilad now manages about SAR 6 bn in ETF assets, representing 64% of Saudi ETFs and 52% across the GCC.
IN CONTEXT- The investment follows PIF’s earlier backing of the SPDR JP Morgan Saudi Arabia Aggregate Bond ETF, which debuted in Singapore last month after listings in Frankfurt, London, and Milan. PIF had seeded the fund with USD 200 mn, giving global investors exposure to Saudi sovereign and quasi-sovereign debt, including USD- and SAR-denominated sukuk.
