As markets pause on news about Dubai World’s extension on debt payments, there are still plenty of reasons to give Middle East-focused exchange traded funds (ETFs) a look.

Debt concerns about Dubai remain after a credit rating agency cut its ratings on six state-connected companies in the country. Dubai asked the government if it could defer payments on $60 billion in debt owned by Dubai World for at least six months. Dubai World is the city-state’s primary investment arm. (Will it blow over?)

But just because Dubai is mired in a potential crisis, it doesn’t mean investors should shy away from ETFs that focus on the Middle East. For one, Middle East ETFs can mitigate your exposure to risk by being allocated across a number of countries instead of focused on just one.

The Middle East is a large area of the world. North Africa can sometimes be lumped in with the region, which explains the acronym MENA: Middle East and North Africa.

Ron Rowland for Money and Markets says other regions include the area between the Red Sea and Africa. (Is the Middle East the next big thing?)

A variety of funds to choose from are available:

  • SPDR S&P Emerging Middle East and Africa (NYSEArca: GAF): 62.6% in South Africa; 25% in Israel; 6% in Morocco
  • WisdomTree Middle East Dividend Fund (NYSEArca: GULF): 34% in Qatar; 17.7% in Egypt; 15.9% in United Arab Emirates; 15.5% in Kuwait
  • Market Vectors Gulf States ETF (NYSEArca:MES): 47.7% in Kuwait; 25.5% in United Arab Emirates; 18% in Qatar
  • PowerShares MENA Frontier Markets (NYSEArca: PMNA): 23.7% in United Arab Emirates; 20.3% in Egypt; 19.1% in Kuwait; 13.8% in Jordan

One of the biggest risks of investing in the region is that it depends heavily on oil prices being high in order to generate income. There are also geopolitical risks, thanks to ethnic and political clashes. This can often lead to volatility, but you can protect yourself with an exit strategy if it gets to be too high. (Consider frontier markets).

For more stories about the Middle Mast, visit our Middle East category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.