Saudi fails to draw investors; Russia's sanctions silver lining; Dubai comes to Nasdaq
Oct 24, 2019
Few investors are willing to follow their benchmarks when it comes to backing Saudi Arabia’s entry to MSCI’s Emerging Markets index.
While MSCI has ramped up the weighting allotted to Saudi Arabian equities in the MSCI EM Index, Global Emerging Markets funds remain starkly underweight, with an average holding of just 14bps, some 2.45% below the benchmark index weight, according to analysis from Copley Fund Research, which monitors flows in funds with $1.2 trillion under management.
That makes Saudi Arabia the deepest underweight among global emerging market countries after China and Hong Kong.
While some investors have increased allocations in the past six months, 85% of global EM funds have yet to invest any money at all in Saudi Arabia.
"High valuations, a relatively small investment universe and reputation risk a year on from the Khashoggi debacle are of foremost concern for investors,” said Steven Holden, CEO of Copley Fund Research.
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