BlackRock’s iShares to launch two Gulf-focused ETFs

on Feb 18, 2014
Updated: Oct 21, 2019
Listen Tuesday, February 18: BlackRock’s iShares, the world’s leading ETF provider, has filed for the inception of two Gulf-focused funds, aiming to offer investors exposure to what is often an overlooked market. One of the funds will be focused on Qatar while the other will have an emphasis on the United Arab Emirates. This will be the first time that iShares will be able to offer exposure to the Middle East outside of Israel.

The proposed funds will be called iShares MSCI Qatar Capped ETF and iShares MSCI UAE Capped ETF. They will be passively managed funds, tracking two indexes – the MSCI All Qatar Capped Index and the MSCI All UAE Capped Index.
The underlying indexes aim to give exposure to listed companies that are classified in the UAE, according to the MSCI Global Investable Market Indices methodology, as well as domiciled and listed in UAE. The ETFs will have holdings in companies across the entire range of market capitalisations.

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iShares is the second major ETF provider to file for Gulf-focused funds this month – last week Global X applied for a Saudi Arabia-focused ETF under the name of Global X MSCI Saudi Arabia. The fund is designed to match the performance of the MSCI Saudi Arabia Domestic Islamic 25/50 index. This benchmark gives exposure to publicly traded companies domiciled and listed in Saudi Arabia, or those that generate at least 80 percent of their revenues from the country.

As yet no information is available on the iShares and Global X funds’ expense ratios, holdings and ticker symbols.
**Existing Gulf-focused funds**
Two existing Gulf-focused funds investors can buy into are WisdomTree Middle East Dividend Fund (NASDAQ:GULF) and Market Vectors Gulf States Index ETF Fundamentals (NYSEArca:MES). GULF’s top holdings are in Qatar (31.58 percent) and the UAE (26.49 percent), while MES has more than one-third of its assets in the UAE and 24.3 percent in Qatar. GULF’s expense ratio is lower – 0.88 percent compared to MES’s 0.99 percent. Both ETF’s have more than half of their assets tied to the financial sector.

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MSCI and GULF have performed well so far in 2014, both posting returns of over 10 percent for their investors.
**As of 11.00 UTC buy Market Vectors Gulf States Index ETF Fundamentals at $30.06.**
**As of 11.00 UTC sell Market Vectors Gulf States Index ETF Fundamentals at $30.04.**
**As of 11.00 UTC buy WisdomTree Middle East Dividend Fund at $22.06.**
**As of 11.00 UTC sell WisdomTree Middle East Dividend Fund at $22.04.**
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