The widespread selling in equity markets around the world has left most regions in the red for year-to-date performance, based on a set of exchange-traded funds as of yesterday’s close (Nov. 20). The conspicuous exception: stocks in the Middle East. The US market, which has fallen sharply in recent weeks, is holding on to a fractional gain for 2018, but the razor-thin increase is no match for the still-solid increase so far this year for markets in the Middle East
WisdomTree Middle East Dividend (NASDAQ:GULF), which tracks a fundamentally weighted index of companies that pay dividends, is up 8.5% this year through yesterday’s close. The fund (the only regional Mideast equity ETF) has declined in recent trading sessions, but the setback has been mild compared with the selling wave in the rest of the world’s regions.
It’s debatable if the relative strength in Mideast stocks will endure. “Weak sentiment is clear across the region,” notes Tariq Qaqish, managing director for asset management at Menacorp Financial Services in Dubai. “It’s accompanied by geopolitical issues, the recent developments in Saudi (with the killing of journalist Jamal Khashoggi) and the possible outcome from that incident,” he tells Reuters.
Technically, the US stock market is still above water for year-to-date results, based on the SPDR S&P 500 (NYSE:SPY). But after yesterday’s sharp selloff, which follows weeks of mostly down days, this widely traded ETF proxy for US equities is up a fractional 0.3% for 2018 through yesterday’s close.