Invesco has launched the first exchange traded funds (ETF) in Europe that provides pure passive exposure to Saudi Arabia.
The initiative will offer investors access to the largest economy in the Middle East. The Invesco MSCI Saudi Arabia UCITS ETF is available in USD on the London Stock Exchange.
Saudi Arabia began opening its equity markets to foreign investors in 2015 and has since eased foreign investor requirements and brought trade settlement more in line with global standards.
As a result, MSCI has included Saudi Arabia in its annual review process, with an announcement due on 20 June 2018 as to whether they will raise it to emerging market status.
If successful, Saudi Arabia would be included in the MSCI Emerging Markets Index from 2019.
Chris Mellor, head of Europe, Middle East and Africa ETF equity and commodity product management at Invesco, said: “Saudi Arabia is in the early stages of an exciting transformation. The reforms within the ‘Saudi Vision 2030’ programme are intended to reduce the economy’s dependence on government funding and oil exports.”
Pietro Poletto, head of fixed income and listed products, London Stock Exchange Group, commented: “London is the premier listing and trading venue for ETFs in Europe and we are delighted that Invesco has chosen to issue its first European product tracking the Saudi Arabian market here.”
He added: “This is the first of its kind in Europe and demonstrates the dynamic growth of the industry and London’s ability to offer the widest diversity of products and access to international investors. We are seeing exciting growth in the number of listings and trading activity on our markets and expect appetite for these products to remain very strong.”
