The new Market Vectors Gulf States Index ETF (NYSEARCA:MES) launched on July 23rd, the most recent region specific ETF to hit the market. The Gulf States fund is based on the Dow Jones GCC Titans 40 Index, which is comprised of public companies that are headquartered in countries that belong to the Gulf Cooperation Council [GCC] or that generate most of their revenues from countries belonging to the council. In addition to being part of the GCC, companies in the index must have market caps greater than $100 million, a 3-month average daily turnover of $1 million, and trade on recognized stock exchanges. MES is country heavy in Kuwait (52%), the United Arab Emirates (26%), Qatar (15%), and Oman (4%).
The Gulf States Index ETF is the most recent of a slew of Middle East, Africa, and frontier market ETFs to become available. PowerShares recently launched a similar, but more diverse MENA Frontier Countries Portfolio ETF (NASDAQ:PMNA) which also has top country exposure in Kuwait, and exposure in Qatar, the United Arab Emirates, and Oman. Other similar ETFs include State Street's Emerging Middle East and Africa Fund (NYSEARCA:GAF), Market Vectors Africa Index Fund (NYSEARCA:AFK), and Claymore's Frontier Markets ETF (NYSEARCA:FRN).
The top 10 holdings in the Gulf States Index ETF are:
- Mobile Telecommunications Co. - 12.14%
- Kuwait Finance House - 10.45%
- National Bank of Kuwait - 7.92%
- Emaar Properties - 7.21%
- National Industries Group - 5.43%
- Qatar National Bank - 3.28%
- Public Warehousing Co. - 2.87%
- Global Investment House - 2.83%
- First Gulf Bank - 2.65%
- Commercial Bank of Kuwait - 2.63%
The fund has a heavy weighting in banks (38%), followed financial services (22%), and real estate (11%). The expense ratio for the fund is 0.98%, and trades on the NYSE Arca exchange.