The $51.5 million QAT is not even 14 months old, so the ETF was not around when FIFA decided to award Qatar the 2022 World Cup. That does not mean the ETF is not vulnerable to Qatar potentially losing its coveted hosting duties.
The bulk of the market value for Qatar’s equity market is held by banks and real estate firms, companies expected to benefit from the World Cup. QAT reflects as much with a 56.4% weight to the financial services sector. Throw in a 13.4% weight to industrials, which could benefit from World Cup-related building projects, and it is impossible to say QAT would not be in for some downside if Qatar loses the World Cup. [Catalysts for the Qatar ETF]
There is some precedent for how QAT and Qatar-heavy ETFs could react if Qatar’s hosting privileges are revoked. For the month after FIFA awarded the World Cup to Qatar in December 2010, the WisdomTree Middle East Dividend Fund (NasdaqGM: GULF) rose more than 6% while the Market Vectors Gulf States Index ETF (NYSEArca: MES) gained nearly 5%.
GULF and MES have Qatar weights of 33.7% and 23.9%, respectively.
iShares MSCI Qatar Capped ETF
