ITS launches the first money market ETF in Central Asia with daily returns in U.S. dollars
The international trading platform ITS on November 25 offered investors access to a new instrument – the ITS Dollar Liquidity Money Market ETF (ITSD). The fund invests in repurchase agreements (REPO) secured by the most reliable collateral in the global financial market – U.S. Treasuries or shares of U.S. ETFs that hold such bonds.
"We consider the launch of the first U.S. dollar money market ETF to be a major milestone for the AIFC and for the financial industry of Kazakhstan and Central Asia as a whole. Along with the diversified index ETFs ITS World and ITS Shariah, as well as the ever‑expanding range of ITS Single Stock ETFs, this creates virtually limitless opportunities for managing savings for a wide range of retail investors and significantly expands opportunities for institutional investors," said Alexander Diakovsky, Managing Director of ITS.
The yield of ITSD is linked to the Effective Federal Funds Rate (EFFR) set by the U.S. Federal Reserve, minus 0.25% per year. The fund's investment strategy eliminates market risks related to price fluctuations in the U.S. Treasuries market, providing investors with transparent returns. Currently, the average yield of the bonds is 3.63% per year. The minimum investment amount is $1, making the instrument accessible to all categories of investors.
Investment income is generated daily through the increase in the fund's share price in line with the applicable interest rate. Additionally, liquidity support during ITSD trading hours from 10:00 AM to 03:45 AM the next day, Astana time, removes restrictions on investing in and withdrawing funds from this instrument, which sets ITSD apart from existing alternative savings management tools on the market.
The annual management and service fee for ITSD is one of the lowest on the market, at 0.1% per year. This fee is included in the fund's price and is deducted by the management company on a daily basis, amounting to less than 0.0003% per day.
IPS Capital is the managing company of ITSD, holding an AIFC license for managing funds for retail investors. The instrument is registered in the AIFC jurisdiction and has its initial listing on the AIX exchange. Income from ITSD for individuals is exempt from taxation in Kazakhstan, making this instrument more attractive than foreign money market funds that are subject to tax withholding.
ITS offers over 3,000 international securities, including more than 300 ETFs, as well as stocks and depositary receipts. The international securities available on ITS are included in major global indexes, covering most sectors of the global economy.
About ITS
ITS is an international liquidity hub. Central to ITS's business model are the principles of best execution and smart order routing technology. These principles enable investors to execute securities transactions at the best prices available on the global financial market, regardless of the transaction volume. This technology ensures that the liquidity for foreign securities on ITS matches that of leading international platforms where these securities are traded.
ITS Central Securities Depository Limited, the central depository for ITS, offers depository services for the storage and settlement of securities. The depository has received Qualified Intermediary with primary withholding responsibility (WQI) status from the U.S. Internal Revenue Service (IRS).
Operating a clearing house that acts as a Central Counterparty, ITS assumes the counterparty role for all obligations of clearing participants and manages the clearing process for transactions on the ITS trading platform.
ITS also calculates its own indexes: the ITS World index (ITSW) and the ITS Shariah index (ITSS).
ITS's direct clients include professional securities market participants from Kazakhstan and other countries, such as financial intermediaries that are accredited and directly registered at the AIFC. Investors, both private individuals and legal entities, access trading through these financial intermediaries, such as brokers and banks.
ITS Press Service