Daily ETF Watch: Qatar, UAE Funds Near

April 17, 2014

iShares is putting the final touches on two Mideast-focused ETFs.

iShares has put into registration three new ETFs: one covering the fixed-income space, and two equity ETFs focused on Qatar and the UAE—two vibrant countries in the middle of the oil-rich Middle East that will be promoted into the MSCI Emerging Markets Index next month.

Besides setting up the possibility of creating two new single-country ETFs, the promotion of the two countries will also have important implications for iShares’ $35 billion emerging markets fund, the iShares MSCI Emerging Markets ETF (EEM | B-100).

UAE, Qatar ETFs

iShares filed regulatory paperwork to market the iShares MSCI UAE Capped ETF (UAE) to track the MSCI All UAE Capped Index, which is designed to measure the equity market in the United Arab Emirates across a broad range of market cap in the energy, financials and industrials sectors.

In the same vein, the proposed iShares MSCI Qatar Capped ETF (QAT) will track the MSCI All Qatar Capped Index, which is designed to measure the equity market in Qatar, according to its regulatory filing.

Both proposed ETFs have an expense ratio of 0.61 percent, or $61 for every $10,000 invested.

New Expiring ‘iSharesBond’

On the fixed-income front, the company plans to market an iSharesBond Dec 2016 Corporate Term ETF (IBDF) will track the Barclays December 2016 Maturity Corporate Index, which is composed of U.S. dollar-denominated, investment-grade corporate bonds maturing Dec. 31, 2016.

The fund may also invest in other ETFs, U.S. government securities, short-term paper, cash and cash equivalents. It has an expense ratio of 0.10 percent, or $10 for every $10,000 invested, according to its regulatory filing.

The proposed fund comes at a time when equity assets are under pressure, as evidenced by the sell-off in momentum securities in the first quarter as investors continue to grapple with weak economic data both in the U.S. and in China, as well as rising tensions between Russia and Ukraine.


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