Currently, there are a few good options for investors looking to access the Middle East market (See all Africa-Middle East Equity ETFs here).
Market Vectors Gulf States Index ETF Fundamentals (NYSEARCA:MES) and WisdomTree Middle East Dividend Fund (NASDAQ:GULF) are good choices for investors wanting a broad exposure to Gulf States.
Also, Van Eck Egypt Index ETF (NYSEARCA:EGPT) and PowerShares MENA Frontier Countries Portfolio (NASDAQ:PMNA) are good picks for inventors respectively looking for concentrated Egyptian exposure, or a diversified exposure across both the Middle East and North Africa (read: Inside the Surging Egypt ETF).
Though we currently have a Zacks ETF Rank #3 (Hold) on the above mentioned ETFs, MES currently has a Zacks ETF Rank #2 (Buy) rating
MES uses a replication strategy to track the performance of its index, Market Vectors GDP GCC Index. The index tracks the performance of the biggest and most liquid companies in the Gulf Cooperation Council (GCC) region.
The fund’s exposure in Qatar and UAE is expected to be highly beneficial for the fund. These regions have been upgraded for inclusion in the MSCI Emerging Markets Index, which will prompt funds tracking the index to buy the stocks of these nations.
The prospect of a Saudi Arabia ETF is pretty interesting, though one has to wonder what kind of companies will be included in the product. Also, small niche country funds have had trouble accumulating assets in the past, so it will be interesting to see if a Saudi Arabia ETF (should it pass regulatory hurdles) is able to break the trend.
This article is brought to you courtesy of Eric Dutram.