Saudi Shares Overtake Turkey as Destination for U.S.-Based Funds

(Bloomberg) -- The amount of money that U.S.-based investors are pouring into Saudi Arabian equities has overtaken flows into Turkish stocks, a sign of the contrasting recent fortunes of the two markets.

An exchange-traded fund focused on Saudi stocks has been increasing its assets under management steadily this year, surpassing a peer focused on Turkish shares for the first time since July. Both funds are offered by BlackRock Inc. and have most of their allocations in banking stocks.

Inflows have been pouring into the Saudi ETF this year ahead of the kingdom’s inclusion in major emerging-market benchmarks compiled by FTSE Russell and MSCI Inc. For the Turkish counterpart, outflows accelerated last month in advance of local elections, with volatility surging after a slump in the lira dragged down other Turkish assets.

The main stock gauges in Istanbul and Riyadh each fell 0.1 percent as of 11:55 a.m. in both markets. While the former has fallen 18 percent in the past year, the latter has gained 14 percent.

Read more:

• Erdogan’s Golden Chance to Make Up to Markets May Not Last Long
• March 27: Turkey Stocks Revert to Roller-Coaster Mode as Polls Loom
• March 14: Saudi EM Inclusion Begs Question About Elephant in the Room

To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Paul Jarvis, Tom Lavell

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