Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Using ETFs to Invest in the Middle East

Stock-Markets / Middle East Dec 03, 2009 - 03:42 PM GMT

By: Ron_Rowland

Stock-Markets

Best Financial Markets Analysis ArticleThe Middle East is big news this week with a state-owned company in the tiny emirate of Dubai asking for an extension on debt payments. Markets around the globe are watching intently.

I’m not especially surprised about this …


If you’ve been to Dubai or seen pictures of the shiny new skyscrapers, you know the place has grown like wildfire. With much smaller oil reserves than its neighbors, Dubai has made its mark as a trading center and playground for the wealthy.

Dubai
Dubai is growing like crazy.

Thanks to exchange traded funds (ETFs), more Americans are investing in Middle Eastern markets. Timing is critical, of course, but you now have several quick and easy ways to trade the region’s growth. Today I’ll tell you about some of them.

6 ETFs to Trade the Middle East

The Middle East is a big, varied region. Some analysts lump North Africa into the mix — so sometimes you’ll see the acronym MENA, which stands for Middle East and North Africa. Others focus specifically on the oil-rich states between the Red Sea and the Indian Ocean.

Here is the full list of ETFs that cover the region, or portions of it.

  • iShares MSCI Israel Capped Investable Market (EIS)
  • iShares MSCI Turkey Investable Market (TUR)
  • SPDR S&P Emerging Middle East & Africa (GAF)
  • WisdomTree Middle East Dividend Fund (GULF)
  • Market Vectors Gulf States Index ETF (MES)
  • PowerShares MENA Frontier Countries Portfolio (PMNA)

You’ll notice that the first two funds, EIS and TUR, target single countries. Israel and Turkey are not the biggest countries in the region by any means, but they do have the most developed capital markets. Additional single-country ETFs in the region are expected to be launched next year.

The other ETFs on the above list are based on indexes that cover multiple world markets, sometimes ranging outside the Middle East. The exact mixture of countries varies considerably.

Some ETFs that sound “regional” are really quite concentrated …

Dubai
The Middle East is a huge, diverse region.

For example, Market Vectors Gulf States Index ETF (MES) has almost half of its portfolio invested in Kuwaiti stocks.

SPDR S&P Emerging Middle East & Africa (GAF) has more than 60 percent in South Africa, with most of its Middle East exposure in Israel.

And PowerShares MENA Frontier Countries Portfolio (PMNA) has about 30 percent in Qatar.

Dubai, in case you’re wondering, is part of the United Arab Emirates (U.A.E.). WisdomTree Middle East Dividend Fund (GULF) has about 17 percent in the U.A.E. while PMNA has around 23 percent.

2 Additional ETFs to Consider …

JETS Dow Jones Islamic Markets (JVS) is a special case. The portfolio isn’t geographically based. Instead, JVS includes international companies that conduct their business in accord with Islamic practices — avoiding alcohol, for instance. Many of the stocks held by JVS are from the U.K., France, Canada, Switzerland, Japan and other markets.

Barclays Asian & Gulf Currency Revaluation ETN (PGD) provides exposure to some of the regional currencies such as the Saudi Arabian riyal and United Arab Emirate dirham. However, it is not a pure play as three Asian currencies are also included.

Should You Buy the Middle East Now?

Undoubtedly, there are risks in the Middle East: Much of the region depends on high oil prices to generate steady income, and no one knows what oil prices will do. Ethnic and political tensions create geopolitical risks. And the area sits astride key trade routes, making it important to far-away powers as they compete for business.

What’s more, most Middle Eastern countries are still classified as “emerging” and “frontier” markets. That means they can represent a tremendous growth opportunity — or a chance for huge losses.

Another point to keep in mind is that all the ETFs, and exchange traded notes (ETNs), I’ve mentioned are fairly new and haven’t attracted huge assets. Volume is usually low, and the bid/ask spreads can be significant. So for now you need to be extremely careful when trading any of these funds. However, if the Middle East prospers, I expect they will do very well over time.

The bottom line is that thanks to the new world of ETFs, investing in the Middle East is now almost as easy as investing in the U.S. And if the Middle East gets through the current turbulence intact, now may be a great time to consider buying one of these ETFs.

Best wishes,

Ron

P.S. I’m now on Twitter. You can follow me at http://www.twitter.com/ron_rowland for frequent updates, personal insights and observations about the world of ETFs.

If you don’t have a Twitter account, sign up today at http://www.twitter.com/signup and then click on the ‘Follow’ button from http://www.twitter.com/ron_rowland to receive updates on either your cell phone or Twitter page.

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in