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FM, KWT: Kuwait Upgrade From 'Frontier' To 'Emerging' Unlikely Bullish For Either Fund


  • Late last year, MSCI upgraded Kuwait from a "Frontier" to an "Emerging Market" status, and iShares launched the iShares MSCI Kuwait ETF.
  • Around seven years ago, we saw a similar upgrade and iShares launch on two neighboring markets: Qatar and the UAE, with both benchmarks delivering negative total returns since.
  • Kuwait remains heavily exposed to the oil cycle, and its 64% allocation to financials means you can't model Kuwait's returns without modeling its banks.
  • Bottom line, the Kuwait ETF portfolio has a relatively low return on equity rate and valuation ratios that aren't that cheap, so does not seem like an attractive standalone investment for now.
  • Looking for a helping hand in the market? Members of Long Run Income get exclusive ideas and guidance to navigate any climate. Learn More »

An aerial shot of the Kuwait Towers during sunset with the view of the skyscrapers at the background.
Photo by Anson Fernandez Dionisio/iStock via Getty Images

In late 2020, MSCI upgraded Kuwait from "Frontier Market" to "Emerging Market" shortly after BlackRock launched the iShares MSCI Kuwait ETF (BATS:KWT) in September. Kuwait was by far the

Data by YCharts

Data by YCharts

Data by YCharts

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This article was written by

Tariq Dennison profile picture
International investing in plain English

Tariq Dennison TEP runs a registered investment adviser focused on international clients and portfolio strategies. His marketplace service "The Expat Portfolio" shares his on-the-ground experience as an expat investing in diverse foreign markets. Tariq is the author of the book "Invest Outside the Box: Understanding Different Asset Classes and Strategies".  He lives in Central Europe, and teaches two classes at the Masters in Finance program at ESSEC Business School in Singapore.

Analyst’s Disclosure: I am/we are long FM, IEMG, VWO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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