CI Capital Asset Management has launched an equity fund tracking the EGX30 Capped index, which it says is the first of its kind in the local market, the company announced in a press release (pdf). The door for subscription to the open-ended fund — dubbed “Misr Equity” — opened yesterday.

SOUND SMART- A tracker fund allows investors to purchase shares in companies listed in a specific index, bringing them long-term, cumulative returns based on the performance of the index over a specific period of time. We outline how this works — and the different kinds of tracker funds — in our explainer on passive investing here.

What they said: “The fund targets investors looking for long-term returns,” CI Capital Chief Investment Officer Tarek Shahin said in the statement. “Despite the current pressures on the global economy and the effect on the performance of equities in emerging markets, this has meant that companies are currently trading at very attractive valuations that do not reflect their growth trajectories, meaning they could outperform these prices in the long term.”

Shahin told us he wants the fund to be among the ten largest in Egypt by the end of 2023.

REMEMBER- The EGX30 is down some 16.7% YTD, as inflationary pressures and higher rates batter global equities markets and recessionary risks see foreign investors exit riskier emerging market stocks.

What’s the EGX30 Capped? Launched in 2019, the index puts a 15% limit on the weight accorded to any one security. Capped indices are calculated in much the same way as regular ones, but prevent stocks with a high freefloat percentage from causing disproportionate swings in the index — which is why CI Capital chose the capped index for this tracker fund. “The capped index has the essence of the main index, but offers more diversification and better sector representation,” Shahin tells Enterprise. (Read: The index is less likely to be swung one way or another by the performance of a single share, such as CIB, which dominates the EGX30.)

Who can subscribe? The fund is open to CI Capital and CI Capital Asset Management’s clients, as well as clients of Misr Capital Brokerage and Mubasher. The minimum investment is EGP 100, or 10 mutual fund units at EGP 10 each. “We really want to democratize the investment industry,” Shahin says of the low minimum buy-in, adding that the fund targets both retail investors and institutions.