Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Exchange-traded funds (ETFs) in the UAE gained strong traction in 2025 and are expected to see further growth in 2026, driven by rising investor interest and greater visibility on local stock markets.
ETFs provide investors with exposure to a wide range of assets, including equities, bonds, gold, silver and, in some markets, cryptocurrencies. They can be purely equity-based, tracking a broad stock market index, or structured around specific themes through a basket of selected shares.
There are also ETFs that track fixed-income instruments such as bonds, commodities like gold and silver, and digital assets such as cryptocurrencies. In addition, some ETFs are designed as multi-asset funds, combining equities, bonds, commodities and, in certain cases, crypto assets within a single product.
At the Abu Dhabi Securities Exchange (ADX), 2025 saw the launch of three new ETFs, along with the cross-listing of two US-domiciled ETFs.
Aletihad spoke to Sherif Salem, Partner and Head of Public Markets at Lunate, the asset manager overseeing all 20 ETFs currently listed on the UAE stock markets, to assess how the year has unfolded for the ETF segment.
Total assets under management across Lunate’s ETF range currently stand at approximately Dh970 million.
“2025 was relatively light in terms of the number of launches, but strategically important for market development,” Salem said. “We began the year by launching the third product in our fixed-income range, the Chimera iBoxx US T-Bill ETF, and later introduced two thematic ETFs — both firsts for the region: the Boreas Solactive Quantum Computing UCITS ETF in September and the Boreas S&P AI Data, Power & Infrastructure UCITS ETF in November.”
The Chimera iBoxx US Treasury Bill ETF tracks the iBoxx USD Treasury Bills Mid Price Index, which is designed to reflect the performance of US Treasury bills.
The quantum computing ETF tracks a dedicated quantum computing index, providing exposure to mega-cap companies such as Alphabet, Amazon, IBM, Microsoft and Nvidia.
The ETF focused on AI data, power and infrastructure tracks the S&P Transatlantic AI-Related Data Center & Power Supply Infrastructure Index, which provides exposure to 35 companies best positioned to generate economic value from the theme globally, including Oracle, NextEra Energy, Siemens, ABB and Eaton Corp.
These launches brought the total number of ETFs managed by Lunate in the UAE to 20, with 18 listed on ADX and two on the Dubai Financial Market (DFM). “The thematic ETFs, in particular, were well received, with current assets under management of approximately Dh35 million for the quantum computing ETF and Dh67 million for the AI data and power ETF,” Salem said.
Investor appetite, he noted, was strong for differentiated and forward-looking exposures. “This was reinforced by a sustained marketing effort and Wio Invest onboarding our ETFs onto its platform, allowing retail investors to trade easily and set up recurring investments. As a result, nearly all of our ETFs now trade on a daily basis, which is a key milestone for market maturity,” Salem said.
In addition to local launches, international participation also increased. US-based asset manager KraneShares cross-listed two of its flagship ETFs on ADX during the year — the KraneShares CSI China Internet ETF (KWEB) and the KraneShares Global Carbon Strategy ETF (KRBN).
“The cross-listing of these two US ETFs into the UAE is particularly encouraging and signals that the market — which we have actively helped build since 2020 — is now reaching a level of depth and credibility that attracts international issuers,” Salem said.
Trading activity in the ETF sector has picked up steadily. “While absolute volumes are still developing, what matters more at this stage is the breadth and consistency of trading across the range,” he said.
Liquidity has also improved with increased participation from both retail and institutional investors. “Thanks to sustained investor education, marketing efforts and broader access via platforms such as Wio Invest, nearly all of our ETFs now trade daily,” Salem added.
Mutual funds and ETFs share broadly similar structures, but ETFs differ in how they are priced and traded, offering greater flexibility to investors. There are several mutual funds available in the UAE, managed by both local and offshore asset managers, but unlike ETFs, these funds are not traded on stock exchanges.
“Mutual funds have been losing market share to ETFs due to ETFs’ advantages in transparency, liquidity, cost efficiency and intraday tradability,” Salem said, adding that Lunate’s focus remains firmly on ETFs. “Global ETF assets have grown from roughly $7 trillion a decade ago to around $12 trillion today, while mutual fund growth has been comparatively muted.”
Gold ETFs have also expanded in recent years as the precious metal has outperformed many other asset classes, and Salem acknowledged the relevance of the asset class for the UAE market.
When asked about the possibility of launching a gold ETF locally, he said: “We continue to study new opportunities and product ideas across asset classes, always with a focus on investor demand, market readiness and structural feasibility.”
Lunate currently operates two ETF brands — Chimera and Boreas. Chimera focuses on core and broad-market exposures such as equity indices and fixed income, while Boreas is dedicated to thematic and innovation-driven strategies. “The distinction helps investors clearly differentiate between foundational portfolio components and higher-conviction thematic allocations, while both benefit from the same underlying platform, governance and distribution capabilities,” Salem said.
Many of Lunate’s ETFs are structured under the Undertakings for Collective Investment in Transferable Securities (UCITS) framework, a European Union regulatory regime governing investment funds and widely regarded as the gold standard in the ETF industry. The two thematic ETFs launched in 2025 fall under this framework.
“UCITS funds are subject to strict limits on single-issuer exposure, robust risk management and transparent, standardised reporting — making it easier for investors to compare costs and risks across products,” Salem said.
Lunate’s ETFs operate under two umbrella structures — a UCITS ICAV umbrella and a locally registered Securities and Commodities Authority (SCA) umbrella. “The SCA-registered umbrella is structured very similarly to UCITS in terms of diversification, oversight and investor protection,” Salem said.
