Key Takeaways
- • HSBC Asset Management launched GBP (sterling) FX-hedged share classes for its Global Sukuk UCITS ETF, designed to provide UK-based institutional investors—particularly defined contribution pension schemes—with Shariah-compliant currency risk management.
- • The Fund held USD 547 million in assets under management as of end-June 2026, with hedged share classes available across both listed ETF and unlisted formats; the ETF listing on the London Stock Exchange is subject to final regulatory approval.
- • This launch represents the market's first Shariah-compliant FX-hedged share classes for a passive UCITS Sukuk fund, reflecting increasing institutional demand for index-based sukuk exposure combined with sterling currency hedging.
- • The product was developed through collaboration across HSBC Asset Management, HSBC Bank Middle East Limited, HSBC Global FX Services, and Islamic banking capabilities, integrating investment, distribution, trading infrastructure, and operational controls to meet both investor requirements and Shariah compliance standards.
Summary
HSBC Asset Management announced the launch of sterling-hedged share classes for the HSBC Global Funds ICAV – Global Sukuk UCITS ETF, marking a strategic expansion designed to improve accessibility for UK institutional investors seeking Shariah-compliant fixed-income exposure with reduced currency volatility. The Fund, which had historically offered only USD-based share classes, now provides GBP-hedged alternatives across both listed ETF and unlisted share class formats, with the London Stock Exchange ETF listing pending final regulatory approval.
The initiative addresses demonstrated demand from UK pension schemes—particularly defined contribution plans—for sukuk exposure without the foreign exchange risk typically associated with USD-denominated Islamic bonds. By introducing currency-hedged share classes, HSBC AM enables UK institutional investors to access Sukuk returns while managing currency exposure in a manner consistent with Shariah principles, a requirement that previously limited hedging options available to Islamic investment vehicles.
As of end-June 2026, the Fund managed USD 547 million in assets, positioning it as an established player in the European sukuk ETF market. The launch is expected to represent the first Shariah-compliant FX-hedged share classes available for a passive UCITS Sukuk fund, providing a differentiated offering in an institutional asset class.
The product development required close coordination across multiple HSBC divisions—combining investment expertise from HSBC Asset Management, distribution capability via HSBC Bank Middle East Limited, trading infrastructure from HSBC Global FX Services, and Islamic banking knowledge—to ensure both operational effectiveness and compliance with Shariah requirements. Olga de Tapia, Global Head of ETF & Indexing Sales at HSBC Asset Management, emphasized that investors increasingly seek index-based sukuk exposure with integrated currency risk management aligned to Islamic principles, a combination that this offering specifically addresses.
The initiative addresses demonstrated demand from UK pension schemes—particularly defined contribution plans—for sukuk exposure without the foreign exchange risk typically associated with USD-denominated Islamic bonds. By introducing currency-hedged share classes, HSBC AM enables UK institutional investors to access Sukuk returns while managing currency exposure in a manner consistent with Shariah principles, a requirement that previously limited hedging options available to Islamic investment vehicles.
As of end-June 2026, the Fund managed USD 547 million in assets, positioning it as an established player in the European sukuk ETF market. The launch is expected to represent the first Shariah-compliant FX-hedged share classes available for a passive UCITS Sukuk fund, providing a differentiated offering in an institutional asset class.
The product development required close coordination across multiple HSBC divisions—combining investment expertise from HSBC Asset Management, distribution capability via HSBC Bank Middle East Limited, trading infrastructure from HSBC Global FX Services, and Islamic banking knowledge—to ensure both operational effectiveness and compliance with Shariah requirements. Olga de Tapia, Global Head of ETF & Indexing Sales at HSBC Asset Management, emphasized that investors increasingly seek index-based sukuk exposure with integrated currency risk management aligned to Islamic principles, a combination that this offering specifically addresses.
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