As investors’ confidence continues in the Qatari market, Doha Bank and Aventicum Capital Management Qatar have marked the third anniversary of the QE Index ETF 'QETF', Qatar’s first conventional exchange traded fund (ETF) and one of the GCC’s largest.
In a statement, Doha Bank said the "timing is monumental" with the lead up to the 2022 FIFA World Cup in Qatar and the recent announcement by the Cabinet of Ministers for the proposed change to foreign investor limits to 100% for listed constituents.
The QETF has generated a total return of 39.25% since inception (first rebalance was on February 12, 2018). The QETF has assets under management of approximately QR428.5mn ($117.7mn) and is benchmarked to the QSE index as on close April 29, 2021.
The QETF tracks the performance of the QE Price Index, which offers access to the 20 largest, most highly capitalised and liquid companies in Qatar through a single listed product.
The fund is a listed transparent, liquid and low-cost investment product, which was launched in 2018 as part of the QSE’s initiative to provide local and international investors with an efficient way to gain exposure to the strongest and most liquid Qatari companies.
At the time of listing, QSE CEO Rashid al-Mansoori said: “The ETF is in line with the government’s vision of promoting sound investment products listed on the QSE, as part of the Qatar National Vision 2030.”
Commenting on the anniversary, Doha Bank CEO Dr R Seetharaman said: “Clients are seeking more income, at a time of low rates and low returns with less risk as ETF assets under management just crossed $8.3tn globally.”
The index currently offers a dividend yield of 2.70%, which the fund distributes annually. The QETF paid out dividends in each of its first three years of operations, and last year, the QETF paid out dividends in two instalments. This was the first time any listed company or investment fund had multiple payouts since the inception of the QE.
Mohsin Mujtaba, QSE director of Product and Market Development, said: “Qatari market has provided an average dividend yield of 4% over the last 10 years compared to 2% by US markets.”
Fahmi Alghussein, CEO of Aventicum Capital Management Qatar, said: “The QETF’s three-year track record of strong performance has cemented our reputation as a leading investment manager in the region across active and passive. This milestone will enable a greater number of investors and allocators to access the compelling investment opportunity in Qatar.”
The QETF also boasts one of the lowest total expense ratios (TER) among emerging market ETFs, with 0.50% in TER; the QETF was able to provide for a minimal tracking error of about 0.28% when compared to the tracked index.
The value of an investment in the QETF may go down, as well as up, and an investor may also lose all or a part of its investment. Past performance is not a reliable indicator of future performance. Tracking error is the divergence between the performance of the Index and the performance of the QETF, according to a statement.
Tracking error may occur because of, among other things, differences between the securities (or the weights of the securities) held in the QETF’s portfolio and those included in the index, differences in prices paid for the securities in the fund’s portfolio and the prices of the securities in the index, and the QETF’s holding cash and changes in the index.
The QETF is managed with a passive investment strategy. As a result, the QETF is expected to hold the constituent securities of the index regardless of the current or projected performance of a specific security or a particular industry or market sector in the index.