Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Lunate, the UAE asset manager that oversees all 20 exchange-traded funds (ETFs) listed on the UAE stock exchanges, is launching a new product — the Boreas S&P Absolute Luxury UCITS ETF — with a concurrent listing on the Abu Dhabi Securities Exchange (ADX) and Deutsche Börse Xetra.
The subscription period for the new ETF began on January 15 and will run until January 21, according to the offering documents. The fund tracks the S&P Europe Luxury 35/20 Capped Index, which provides exposure to Europe’s luxury sector through a diversified basket of 32 listed companies.
The index includes leading luxury names such as Hermès, Ferrari, Burberry, LVMH and Richemont, spanning fashion and leather goods, watches and jewellery, automobiles, personal care and beauty, and high-end hospitality.
Based on the index factsheet, the top 10 constituents and their approximate weights are LVMH (29.7%), Richemont (18.3%), Hermès (13.6%), L’Oréal (7.8%), Ferrari (7.6%), Mercedes-Benz (6.0%), Kering (3.8%), BMW (3.4%), Moncler (2.4%) and InterContinental Hotels Group (1.6%).
Sector-wise, fashion and leather goods account for about 55% of the index, followed by automobiles at around 20%, beauty and personal care at 15%, and leisure and hospitality at about 10%.
The offer price for each unit during the initial offering period has been set at Dh2.04, plus issuance charges of Dh0.016. The ETF is open-ended, with no cap on the number of units that can be created.
During the initial offer period, investors can subscribe through one of six authorised participants — International Securities LLC, EFG Hermes UAE, Arqaam Securities, BHM Capital, HSBC Bank and Q Market Maker — or via the ADX eIPO platform. In addition, ENBD Securities, First Abu Dhabi Bank, Wio Bank, Al Ramz Capital, BHM Capital and Mashreq Bank are also offering their customers access to the ETF during the initial offering period.
According to the prospectus, the ETF is an income-sharing fund, with dividends intended to be distributed on a semi-annual basis, when available.
The Boreas S&P Absolute Luxury UCITS ETF is expected to commence trading on ADX on January 27, 2026, and will be listed concurrently on Deutsche Börse Xetra, marking another step in Lunate’s expansion into European capital markets. The cross-listing programme began earlier this month with the Boreas S&P AI Data, Power & Infrastructure UCITS ETF, with additional thematic ETFs, including one focused on quantum computing, expected later this year.
According to the FAQs accompanying the prospectus, investing in the luxury ETF “may appeal to investors seeking exposure to Europe’s world-leading luxury sector,” as the fund invests in companies “that define craftsmanship and heritage,” combining strong global demand, pricing power and brand equity to benefit from long-term growth in high-end consumption.
Speaking to Aletihad, Sherif Salem, Partner and Head of Public Markets at Lunate, said the launch of the luxury ETF marks the third thematic ETF under the Boreas brand.
“While the first two thematic ETFs focused largely on next-generation technology, this product offers exposure to a more traditional and well-established sector, with familiar names and industries,” Salem said. “Investors are already well acquainted with many of the brands included in the ETF — some of the world’s leading luxury names.”
He added that the luxury sector has historically shown resilience across different economic cycles.
“This ETF provides investors with an opportunity to gain exposure to globally recognised luxury brands that many are already familiar with, while adding diversification and balance to the thematic range we have launched so far,” Salem said.
Salem also highlighted the growing role of ETFs compared with mutual funds.
“Mutual funds have been losing market share to ETFs due to ETFs’ advantages in transparency, liquidity, cost efficiency and intraday tradability,” he said, noting that global ETF assets have grown from about $7 trillion a decade ago to around $19.44 trillion today, while mutual fund growth has been comparatively muted.
With the new launch, the Boreas S&P Absolute Luxury UCITS ETF becomes the 23rd ETF available on UAE exchanges. It will be the 19th UAE-based ETF on ADX, with the total rising to 21 when the two recently cross-listed US ETFs are included, adding to Lunate’s expanding range of thematic products aimed at both regional and international investors.
