This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Invest in the Middle East -- but Not With Oil

Two new frontier-market funds have come out recently -- the WisdomTree Middle East Dividend Fund (GULF) and the Market Vectors Gulf States Index ETF (MES). Like the PowerShares MENA Frontier Markets Fund (PMNA), they obviously focus on the Middle East.

What's more, they could be right for your portfolio, if you take the time to figure out which of them works best for you.

The frontier segment is becoming more important, as opposed to the emerging-market segment, because these frontier countries are building their economies, and funds such as these can be useful for portfolio diversification. The correlation for most emerging markets to the U.S. has gone up in recent years, as U.S.-based investors have flooded that segment, but frontier-segment countries continue to have little correlation.

To make matters even better, the frontier space is becoming more accessible -- and anyone interested in the space should look at all the choices, decide whether any exposure is appropriate, and then try to choose the fund that makes the most sense to them.

The differentiator for the dividend fund from WisdomTree is that it weights the holdings by dividends paid. MES stands out for being more narrowly focused on just the Gulf Cooperation Council states weighted by market cap, and it excludes Egypt and Morocco, which both weigh prominently in the other funds.

Beyond those structural differences, the funds take divergent paths at the country and sector level. MES invests in only five countries: Kuwait 52%, U.A.E. 25%, Qatar 15%, and then much smaller weights for Oman and Bahrain. GULF favors Kuwait, but only at 25% of the fund, followed by U.A.E. 20%, Qatar 15%, Egypt 11%, Morocco 9% and, again, much smaller weights in Jordan, Oman and Bahrain.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
PMNA $13.61 0.44%
GULF $20.83 -0.43%
MES $28.05 -0.99%
AAPL $125.01 -0.63%
FB $78.10 0.70%

Markets

DOW 17,841.98 -86.22 -0.48%
S&P 500 2,080.15 -9.31 -0.45%
NASDAQ 4,919.6440 -19.6830 -0.40%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs