Saudi Arabia Fund Lures In Cash Before FTSE Ruling: ETF Watch

(Bloomberg) -- Cash is pouring into an exchange-traded fund that tracks Saudi Arabian stocks as investors await index provider FTSE Russell’s decision Wednesday on whether to add the country to its emerging-markets category.

The iShares MSCI Saudi Arabia ETF, or KSA, has gathered around $132 million in assets, more than $95 million of which has come this year, according to Bloomberg data. Investors have placed some of their biggest bets this month, with almost $54 million flowing in to the fund over the past four weeks. The fund also has climbed more than 10.5 percent in March.

If FTSE Russell includes Saudi Arabia in its emerging-markets bucket, KSA could attract billions of dollars starting next year, according to estimates by EFG-Hermes Holding. The country currently isn’t classified by FTSE Russell.

KSA’s top holdings include Saudi Basic Industries Corp., comprising 14.7 percent of the fund, Al Rajhi Bank at 10.2 percent and National Commercial Bank at 8.6 percent. The ETF’s top allocations are to banks, which make up more than 36 percent of the exposure, and chemical companies, which account for 23.9 percent.

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