Van Eck May List Two Saudi Arabia-Specific ETFs

Van Eck, the parent company of Market Vectors and the fifth-largest U.S. ETF issuer by assets, has filed plans with the Securities and Exchange Commission to possibly list two Saudi Arabia-specific ETFs. If the funds do come to market, they would be the first ETFs devoted to the largest producer among the OPEC member states.
 
Van Eck has filed plans for the Market Vectors Saudia Arabia ETF and the Market Vectors Saudi Arabia Small-Cap ETF.
 
The Market Vectors Saudi Arabia ETF would track the Market Vectors Saudi Arabia Index, which includes companies either based in the kingdom or those that derive at least half of their revenue in the oil-rich country. Companies must have market caps above $150 million on the index's rebalancing date to be included.
 
The small-cap fund will track the Vectors Saudi Arabia Small-Cap Index, a modified cap-weighted index, which generally only includes Saudi Arabian companies ranking in the bottom 90-98% of the range of full free-float market capitalizations of all Saudi Arabian companies, but may also include companies whose market value falls outside of this range but within the bottom 15% of companies ranked by market capitalization, according to the filing.
 
Filings for both funds did not include tickers or expense ratios.
 
Perhaps surprisingly there are currently no ETFs on the market today offering exposure to Saudi Arabia. The WisdomTree Middle East Dividend ETF (Nasdaq: GULF) offers exposure to Qatar, Kuwait, the United Arab Emirates, Morocco, Oman and Jordan. The Market Vectors Gulf States Index ETF (NYSE: MES) tracks stocks from Kuwait, Qatar, UAE, Bahrain and Oman. GULF and MEX have $13.8 million and $12.5 million in AUM, respectively.
 
Currently, foreigners cannot own Saudi stocks directly, but Saudi equities have performed well this year and the country looks poised to be promoted to emerging markets status from frontier market by MSCI. MSCI's Web site does not list Saudi Arabia among frontier markets at the moment.

By The ETF Professor