Kazakhstan Launches First Shariah-Compliant ETF in Central Asia

Kazakhstan launched the region’s first Shariah-compliant exchange-traded fund (ETF), the ITSS, on January 14, marking a significant milestone in Islamic finance, The Astana Times reported.

The ETF, listed on the Astana International Exchange, aims to replicate the performance of the ITS Shariah index, which includes 30 major global companies meeting Islamic finance standards. The initial offering raised $5 million, with investors purchasing 500,000 shares at $10 each.

The fund is monitored for Shariah compliance by an independent firm, ensuring adherence to Islamic principles. It provides investors with a diversified portfolio and trades in U.S. dollars, benefiting from tax exemptions under AIFC regulations.

The launch reflects Kazakhstan’s growing Islamic finance sector, which has made notable advancements since the introduction of relevant legislation in 2009. The development is expected to influence neighboring countries, particularly Uzbekistan, which has a larger population and greater potential for Islamic financial products.