Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 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