Saudi Arabia Fund Quadruples in Size as Cash Pours In: ETF Watch

(Bloomberg) -- Inflows this year have quadrupled the amount of assets in an exchange-traded fund that invests in Saudi Arabian equities, data compiled by Bloomberg show. While the iShares MSCI Saudi Arabia ETF (ticker KSA) may still be relatively small with just under $58 million in assets, buyers have been pouring money into the fund that had about $14 million in assets at the start the year.

Speculation about Saudi Arabia’s potential inclusion in the FTSE Russell and MSCI emerging-markets indexes, expectations of an initial public offering from Aramco and rising oil prices are all boosting flows into Saudi equities, according to Andrey Glukhov, a money manager at TCW Group who helps oversee more than $100 million in emerging-market equities.

• iShares MSCI Saudi Arabia ETF (ticker KSA), which has about $58 million in assets, tracks a broad-based index of Saudi Arabian companies
  • KSA’s top holdings include: Saudi Basic Industries (14.4%), Al Rajhi Bank (10.9%), National Commercial Bank (8.6%), Saudi Telecom (5.6%), Samba Financial Group (4.5%), Saudi Arabian Mining (3.9%)
  • The fund’s top industry allocations are: banks (38.1%), chemicals (24.2%), telecommunications (7%), food (6.7%), mining (3.9%)
  • Buyers have poured about $43 million into the fund this year; an inflow of over $12 million on Feb. 22 was the largest ever
• MORE: Al Rajhi Lending to Grow; Cost of Risk to Rise: Earnings Outlook
• MORE: Dubai to Doha: A Guide to the Mideast Bank Stocks Tipped to Gain
• MORE: Saudi Arabia Has Done What Is Needed for EM Inclusion, MSCI Says

--With assistance from Carolina Wilson

To contact the reporter on this story: William Mathis in New York at wmathis2@bloomberg.net.

To contact the editors responsible for this story: Rita Nazareth at rnazareth@bloomberg.net, Morwenna Coniam, Alec D.B. McCabe

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