ADS Investment Solutions Licenses New FTSE Russel Saudi Arabia Index

  • New FTSE ADS Custom Saudi Minimum Variance Index developed in collaboration with Abu Dhabi-based ADS Investment Solutions
  • ADS Investment Solutions to launch ETF tracking the index to be listed on Abu Dhabi Securities Exchange
  • Index designed to minimise volatility of the FTSE Saudi Arabia All Cap Index
  • Reflects growing demand from investors for benchmark and analytic solutions to facilitate investments into Saudi Arabia

FTSE Russell, the global index, data and analytics provider, announced today that it has launched a new Saudi Arabia-focused index. The FTSE ADS Custom Saudi Minimum Variance Index has been developed in collaboration with Abu Dhabi-based international financial services company, ADS Investment Solutions. The index has been licensed by ADS Investment Solutions for a new exchange traded fund (ETF), incorporated in Abu Dhabi Global Market (ADGM), to be listed on Abu Dhabi Securities Exchange.

The FTSE ADS Custom Saudi Minimum Variance Index employs a rules-based approach and has been designed to minimise the volatility of the FTSE Saudi Arabia All Cap Index, based on historical return information. The index has been carefully constructed with constraints applied to enhance diversification and to avoid over concentration to any particular stock or sector.

The launch follows FTSE Russell’s recent interim country classification review and announcement confirming that Saudi Arabia will be promoted to Emerging Market status. FTSE Russell will begin including Saudi Arabian domestic stocks into the FTSE Emerging Index from March 2019. Saudi Arabia will be the largest Middle East market in the FTSE Emerging Index with an overall weighting of c. 2.7%. Within the FTSE Global All Cap Index, Saudi Arabia is projected to have an index weight of c. 0.25%. Due to this large projected size within the FTSE Emerging Index, FTSE Russell proposes to implement the inclusion of Saudi Arabia in several tranches to assist index trackers in their ability to efficiently replicate the underlying benchmark change. The inclusion is expected to be fully completed by December 2019.

Mark Makepeace, CEO, FTSE Russell:
“FTSE Russell has a strong track record of innovating for its global customers, creating a variety of custom products to capture different aspects of the market. We are delighted to collaborate with ADS Investment Solutions, to support the development of the local capital markets and the growing demand for investment in the Middle East. We look forward to continuing to collaborate with leading providers such as ADS Investment Solutions to bring new index-linked strategies to the market

Mahmood Ebraheem Al Mahmood, Chairman of ADS Investment Solutions:
“This strategic step is crucial for the financial services market in the region. The creation of a new fund platform in ADGM will open the door for local and regional investors, allowing them to capitalise on opportunities through trading in this local market. This initiative is in line with the strategic visions of Saudi Arabia and the United Arab Emirates to be key players in the financial services industry. We are keen to join efforts with FTSE Russell to offer our investors the opportunities to invest in the Saudi market. This approach is supported by our long history and experience in the financial services sector.”