Another Gulf States ETF

Posted by Bull Bear Trader | 7/25/2008 08:47:00 AM | , , | 0 comments »

As reported at IndexUniverse, another ETF focusing on the Middle East is available. The new fund, called the Gulf States Index ETF (NYSEArca: MES), tracks the Dow Jones index of public companies headquartered or doing most of their business in Gulf Cooperation Council (GCC) countries - an economic alliance between six Gulf State member nations. The focus on the GCC is what makes this ETF unique. The current weightings in the index include: Kuwait (52.3%), United Arab Emirates (25.8%), Qatar (14.9%), Oman (4.4%), and Bahrain (2.6%). As with the other Gulf State ETFs, Saudi Arabia is not included since it does not have any companies open to foreign investment.

The ETF is heavily weighted in the banking and financial services sector, with over 60% of the total weighting. The sector breakdown includes banks (38.5%), financial services (21.6%), real estate (10.5%), technology (7.6%), construction and materials (7.2%), industrial goods and services (7.1%), and telecommunications (3.6%). Large-caps currently make up 37.7% of the fund, mid-caps are at 47.1% weight, while small-caps make up the remaining 15.2% of the fund.

The annual net expense ratio of the fund is 0.98%, which is a little more than the Invesco PowerShares MENA Frontier Countries Portfolio (PMNA), which we discussed in an earlier post. Another recently offered fund for those interested is the WisdomTree Middle East Dividend Fund (GULF).