On news the militant group Islamic State in Iraq and Syria (ISIS) has declared itself an official Islamic state and amid increased speculation of a bursting property bubble, shares of the iShares MSCI UAE Capped ETF (NasdaqGM: UAE) are down 4.4% Monday on volume that is already close to the daily average.

UAE’s glum Monday showing not only makes the newly minted ETF the day’s worst-performing non-leveraged fund, but extends a decline of nearly 26% since June 6, putting the $55.9 million ETF firmly in bear market territory. [Iraq Violence Plagues UAE ETF]

In Dubai, the benchmark DFM General Index tumbled 4.4%, sending stock there to the worst monthly performance since November 2008. “The index is now poised for its first loss in a quarter since June 2012, with none of the regularly traded stocks in the 30-member gauge trading above their 50-day moving average,” reports Laurence Dodds for The Telegraph.

Shares of construction firm Arabtec fell another 3.2%, underscoring fears of an overheating property market, the same catalyst that plagued UAE equities during the global financial crisis. Arabtec , which is UAE’s 17th-largest holding at a weight of 2.36%, has plunged 59% since touching a record high on May 14.

Although Arabtec is a small part of UAE, the stock’s weakness and increasing concern about the property market there, something the central bank recently cautioned about, has made the fund vulnerable due to a massive 67.7% weight to the financial services sector.

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