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DeAWM launches Europe’s first ETF providing exposure to GCC equities including Saudi Arabia


Deutsche Asset & Wealth Management (Deutsche AWM) has listed Europe’s first ETF to provide equity exposure to Middle Eastern Gulf States, including Saudi Arabia.

The db x-trackers MSCI GCC Select Index UCITS ETF tracks the equity markets of all the Gulf Cooperation Council (GCC) countries, with a 65% weighting to Saudi Arabia2. The other countries in the GCC are Bahrain, Qatar, Kuwait, Oman and the United Arab Emirates. The ETF has been listed on the London Stock Exchange and the Deutsche Börse.

“The Saudi Arabian stock market has traditionally been difficult for foreign investors to access, so the launch of an index tracker providing exchange-traded exposure to all the GCC countries is a significant step forward,” says Manooj Mistry, Deutsche AWM’s head of exchange-traded products, EMEA.

The ETF has an annual All-in Fee3 of 0.65% and tracks the MSCI GCC Countries ex Select Securities Index, which is based on the MSCI GCC Countries Index4 but with the exclusion of a small number of stocks due to restrictions on foreign ownership. The underlying index is market capitalisation-weighted and currently consists of 82 securities.

There are currently over 60 Deutsche AWM emerging market and frontier market ETFs, offering a range of equity and fixed income exposures. Deutsche AWM’s suite of emerging markets ETFs are designed to provide investors with a high level of granularity, allowing for the targeting of specific countries, regions and sectors. The db x-trackers MSCI GCC Select Index UCITS ETF is therefore an important addition to the range. 

According to the International Monetary Fund’s latest Regional Economic Outlook for the Middle East and Central Asia, oil exporting nations have been put under pressure by the recent slump in the oil price, however the organisation estimates that capital reserves held by GCC states are sufficiently high to avoid steep spending cuts and limit the drag on growth. The GCC states are an important trading partner for the European Union, accounting for approximately four per cent of total European Union exports to non-member countries, while the GCC region also benefits from increasing trade with China and India, and high energy demand from Asia.

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