ETFs providing exposure to MENA
The Middle East is slowly reasserting their value in the wake of suppressed energy prices as some countries in the region take steps to stimulate their domestic economies and encouraging foreign investment. Traditionally dependent on oil, these economies are now redirecting their resources to develop newer industries as they brave a potentially longer period of low oil prices. While some countries have opened up their stock markets for foreign investors, these economies remain largely difficult to invest in due to illiquidity and poor trading exchanges.The best way to bet on the Middle East is therefore through ETFs that provide exposure to the entire region.
Investors seeking exposure to the Middle East can consider the following ETFs.
- Wisdom Tree Middle East Dividend Fund (GULF)
- SPDR S&P Middle East and Africa ETF(GAF)
- iShares MSCI Frontier 100 ETF (FM)
These ETFs provide investors with diversified exposure to Middle East stocks without the purchase of ADRs or individual country ETFs.
The Wisdom Tree Middle East Dividend Fund invests in a basket of dividend paying companies in the Middle East. This fund invests primarily in the financial sector and provides diversified exposure to oil producing Middle East nations like Kuwait, United Arab Emirates, Qatar, and Morocco among others. Year to date, shares of the GULF ETF have gained 3.1%.
The iShares MSCI Frontier 100 ETF (FM) tracks an index composed of 100 frontier market stocks. This ETF provides diversified exposure to the financials, telecommunication and energy sectors in Middle East nations like Kuwait, Oman, Bahrain, and some exposure to Iraq. Year to date, this ETF has returned 16%.
The SPDR S&P Emerging Middle East & Africa ETF tracks the S&P Mid-East and Africa BMI Index. YTD this ETF has returned 7.6%.