Middle East and Africa Etf Market- Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Middle East and Africa Etf Market- Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The ETF has proved to be most resilient during the most turbulent financial market due to the Covid-19 pandemic. The ETF model has proved to be a critical emergence in the faster more dynamic world of digital investing. Despite the pandemic, worldwide economic slow-down, and drastic lockdown measures the ETF market in the Middle East and Africa has shown a remarkable growth trajectory.

Although the global ETF market has a history of almost 30 years, the ETF market in the Middle East and Africa is still underdeveloped. Globally there are more than 7,000 ETFs traded with more than USD 7 trillion of ETF assets, the number of ETFs based on the Middle East and Africa assets is abysmally low with only a handful of locally-listed ETFs, and trading volumes are low. ETF has hardly taken off in the Middle East Market. The number of ETFs domiciled in the Middle East region is quite low. Saudi Arabia and Qatar have developed ETF market compared to other regions in Middle East but even, the number of ETFs domiciled in both countries are in single digit. However, the Middle East countries focused ETF’s that are domiciled outside the region is increasing. This reflects the interest of the foreign investors in the emerging market indices of Middle East region. Even-though the number of ETFs based on GCC assets, including those domiciled in the USA are quite low. The low asset size of ETFs domiciled in Saudi Arabia compared with ETFs domiciled outside Saudi markets shows the lack of interest for the funds. The awareness about the ETFs and the participation from retail investors are very low compared to other developed and emerging markets.

The ETF market in the Middle East has not taken off owing to various reasons such as lack of financial literacy and investor participation in the Capital Market. Similarly, long-term institutional investors like pension funds, university endowments, and sovereign wealth funds, do not have a targeted allocation to regional equity markets. In addition, there is a lack of regulations around authorized investment advisors, who advise clients on an optimal asset allocation to meet their investment needs. The number of local ETFs is increasing steadily since 2018 and will continue to grow in future

With the economies reviving after the COVID-19 pandemic, the roll-out of vaccines looking imminent, the ETF market in MENA is expected to bounce in coming years. There is the possibility of investors moving away from US investments and instead of looking to international markets, the Middle East is reasserting itself and opening up to foreign investment which will further increase the MENA ETF’s domiciled in the region or outside.

There are very few numbers of players offering ETFs in the Middle East and Africa Market. Numbers of Foreign players have also entered the market with ETFs focused in the MENA but domiciled in the other regions such as America and Europe. Local Players include Al Biland, Alinma Investment, Al Rayan Investment. Other Foreign Players include Blackrock, Invesco, Franklin Templeton, Xtrackers, etc

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support