Thanks to vast reserves of oil and free-flowing cash, the Middle East has become an investing hot spot. The jewel in the crown of Middle East exchange traded funds (ETFs), however, just might be Qatar.
The Gulf has continued to beat the odds laid out by the global financial crisis and continues to gain investment capital from foreign investors. Among property developers in London, the west’s top auction houses and investment bankers around the world, the word of the day is Qatar, says Roula Khalaf and Martin Dickson for The Financial Times. [Middle East: A Good Area To Invest?]
Qatar has continued to beat the odds by getting creative: buying Harrod’s, investing in a Brazilian bank, and buying Islamic art. The region is the world’s largest exporter of liquefied natural gas, and Qatar is investing the cash heavily overseas.
The obstacle? Qatar’s fate hinges on the abilities of its leader, Sheikh Hamad bin Khalifa al-Thani. [Investing In the Islamic Triangle With ETFs.]
The broader Middle East does face a few other upward battles, but as the markets there become fortified and the foreign investment flow continues, the region will attract more fund investors. ETFs are a good way to get exposure to this volatile and politically sensitive region of the world, thanks to the risk-mitigating qualities of these stock baskets. Emerging Money on Seeking Alpha states that the ETF Guggenheim Frontier Markets ETF (NYSEArca: FRN) has a YTD performance has been a respectable 20% — making it one of the top globally diversified funds out there.
There are other ways to get exposure to the Middle East, too:
- SPDR S&P Emerging Middle East & Africa ETF (NYSEArca: GAF): Egypt is 5%; Morocco is 6.5%
- WisdomTree Middle East Dividend ETF (NYSEArca: GULF): Kuwait is 32%; Qatar is 23.5%; United Arab Emirates is 18.9%; Oman is 3.1%
- Van Eck Market Vectors Gulf States ETF (NYSEArca: MES): Kuwait is 39.4%; Qatar is 23.8%; United Arab Emirates is 17.9%
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.