In a recent Investor’s Business Daily article, Jesse Emspak discusses a new Van Eck Global ETF which covers the Persian Gulf in First There Was BRIC – Now, The Gulf Gets ETF”
Van Eck recently introduced the Gulf States Index ETF (MES). Jan Van Eck, company principal, claims that the reason the firm introduced a pure play is that the region is growing and its markets are “doing relatively well.”
Van Eck says that while the Gulf is home to many countries that have historically based their economies on oil, many are now diversifying. In fact, the three largest components of the index are Mobile Telecommunications Co. of Kuwait, Kuwait Finance House and the National Bank of Kuwait. These three companies make up 30.6% of the fund.
Van Eck says that the nations of the Gulf are taking advantage of the current high oil prices in order to build other industries.
More than 77% of the index is based on companies in Kuwait or the United Arab Emirates. Companies in the index do not have to be based in the Gulf, but at least 50% of their revenue must come from the region.
Van Eck mentions that the ability to invest in the Gulf reflects a greater openness to foreign investors, which has helped many emerging markets.