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The sector also dealt with more comprehensive macro headwinds, including a more careful policy background in China and international risk-off sentiment driven by geopolitical tensions and higher energy costs. Thematic ETFs likewise had a hard time for the most part, especially those connected to carbon and high-growth innovation, as appraisal pressures and international rate dynamics weighed on efficiency.
The petrochemical ETF considerably outperformed. Circulations in Q1 2026 were modest and highly concentrated, reflecting selective allotment rather than broad market participation. Despite weak efficiency, ETFs tape-recorded $27.1 million in net inflows, with just a small number of products attracting brand-new capital. This suggests that financiers were targeting specific direct exposures, while lowering or rotating out of others.
Trading activity stayed stable, with typical 30-day volumes around 33,000 shares, focused in a handful of bigger and more liquid ETFs. The majority of activity appears to have happened in the secondary market, allowing financiers to change positions without significant main productions or redemptions. While recent geopolitical events have actually led to more monetary pressure on GCC nations, the area remains resilient and well capitalized to handle the situation.
In January, Boreas launched its S&P Global High-end UCITS ETF, adding a niche thematic exposure focused on worldwide high-end and customer brand names. Momentum continued into April with the approval of KraneShares AGIX and KWIN ETFs by the CMA for cross-listing on ADX. These funds are anticipated to launch in April pending a last approval from ADX.
Q1 2026 showed some progress associating with ETFs in the GCC. We anticipate more global and thematic ETFs to list in the GCC during 2026. While the conflict has actually affected sentiment and costs throughout the quarter, it has driven more volume and interest in local assets.
Regardless of ongoing geopolitical stress and security dangers throughout the Middle East, the economies of the Gulf Cooperation Council (GCC) have continued to demonstrate durability, maintaining positive growth momentum in the last few years. While conflicts in the wider area and global financial unpredictability remain a structural restraint, GCC countries have actually up until now restricted their influence on domestic financial performance through strong financial positions, policy connection, and continual investment.
The World Bank, on the other hand, projects 3.2 percent development in 2025, accelerating to 4.5 percent in 2026. The IMF likewise sees momentum improving, with GCC output growth projected to increase from 1.7 percent in 2024 to 3.3 percent usually in 2025, showing a shift towards more positive total conditions.
The IMF's World Economic Outlook (October 2025) projects international growth easing to 3.1 percent in 2026, with sophisticated economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that comparison, a 4.44.5 percent GCC growth would put the region materially ahead of the world average and somewhat above (or broadly in line with) the emerging-market aggregate, reinforcing the GCC's status as a fairly high-growth pocketprovided that regional risk conditions stay consisted of and reform momentum holds.
Information from the GCC Statistical Center reveal that non-oil sectors already represent more than 73 percent of total GDP, a share that has actually continued to rise as federal governments expand investment in services, infrastructure, and innovation. According to Oxford Economics, non-energy activity throughout the GCC is forecasted to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and rising financial investment in technology and AI-related infrastructure.
Public-sector investment and reform stay central to sustaining this pattern. Policy steps intended at attracting foreign direct investment, alleviating foreign ownership rules, broadening capital markets, and supporting private-sector involvement continue to underpin non-oil growth and minimize the region's exposure to oil cost volatility. While hydrocarbons no longer control the development outlook, oil incomes are anticipated to play a supportive function in 2026.
3.2 percent development in 2025, accelerating to 4.5 percent in 2026. Sees momentum improving, with GCC output development forecasted to increase from 1.7 percent in 2024 to 3.3 percent on average in 2025, reflecting a shift towards more favorable total conditions.
The IMF's World Economic Outlook (October 2025) jobs international growth easing to 3.1 percent in 2026, with advanced economies around 1.5 percent and emerging market and establishing economies just above 4 percent. On that comparison, a 4.44.5 percent GCC growth would place the area materially ahead of the world average and somewhat above (or broadly in line with) the emerging-market aggregate, enhancing the GCC's status as a fairly high-growth pocketprovided that local threat conditions stay included and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors currently represent more than 73 percent of total GDP, a share that has actually continued to rise as federal governments broaden financial investment in services, facilities, and technology. According to Oxford Economics, non-energy activity throughout the GCC is predicted to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and rising financial investment in innovation and AI-related facilities.
Public-sector investment and reform remain central to sustaining this trend. Policy measures intended at drawing in foreign direct financial investment, reducing foreign ownership rules, broadening capital markets, and supporting private-sector involvement continue to underpin non-oil growth and reduce the area's direct exposure to oil cost volatility. While hydrocarbons no longer control the development outlook, oil profits are anticipated to play a supportive role in 2026.
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