Turkey is the sixth largest local currency bond market among emerging economies, and this is the first such fund to be listed on the LSE. It will enable investors to invest directly into the Turkish fixed income market, said ZyFin.
The LAM Alternatif ZyFin Turkey Sovereign Bond UCITS ETF will track the ZyFin Turkey Sovereign Bond Laddered Index, which consists of a basket of sovereign bonds issued by the government of Turkey in Turkish lira (TRY), across various maturities. The index includes six government-issued bonds, selected from a universe of all bonds issued by the Turkish government which have greater than 100m TRY outstanding amount. The bonds are divided into three baskets, with each basket containing two bonds and having a residual maturity close to a target maturity of 2, 5 and 10 years respectively.
“Thanks to the steady economic growth in Turkey, there have been important steps to bring Istanbul and London even closer in terms of economic and financial relations," said Abdurrahman Bilgiç, ambassador of Turkey to the UK.
ABank in Turkey, a subsidiary of Commercial Bank of Qatar, will provide local Turkish market information including geopolitical and macroeconomic assessments, interest rate trends’ research and local market intelligence.
“Straddling the continents of Europe and Asia, Turkey's strategically important location has historically been very important. Turkey remains an investment grade destination and has enjoyed sustained GDP growth over the past 16 years with forecasts indicating continued growth of 3.5% in 2016," said Sanjay Sachdev, executive chairman of ZyFin.
"With research insights from ABank and backed by our expertise in asset management we have structured this attractive investment solution for investors who wish to participate in the growth momentum that we believe will unfold in Turkey,” added Sachdev.
Müge Öner, acting CEO at ABank, commented: "As ABank, we are glad to be the preferred counterparty and broker of this ETF in Turkey. With such partnerships, we will continue taking strong steps to be a key player both in Turkish banking sector and in the region, thanks to the support of our major shareholder The Commercial Bank (Q.S.C.).”
Index securities are issued with fixed-rates and the index is calculated in USD.