By far the worst offender of the three single-country OPEC ETFs over the pat month has been the iShares MSCI UAE Capped ETF (NasdaqGM: UAE), which has tumbled 15%. UAE is now off 15.3% year-to-date while QAT is higher by half a percent. The two countries combine for nearly 11% of FM’s weight, though they will soon depart the ETF as a result of their promotion to emerging markets status.
Making the oil-related slides for QAT and UAE all the more ominous is this fact: Neither of those ETFs are excessively weighted to the energy sector, the result of the largest oil companies in those countries being state-run enterprises that are hard to access for foreign investors.
QAT’s energy sector weight is just 7.6%, merely the ETF’s fourth-largest sector allocation. UAE devotes just 5.3% to energy stocks, also that ETF’s fourth-largest sector weight. That is just a fraction of the nearly 69% the fund devotes to financial services names. NGE had a large energy weight of almost 29.3% at the end of the second quarter, but even that was well behind the nearly 44% the ETF devotes to financial services stocks.
Global X MSCI Nigeria ETF