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The sector likewise faced broader macro headwinds, consisting of a more cautious policy backdrop in China and worldwide risk-off sentiment driven by geopolitical tensions and higher energy prices. Thematic ETFs also had a hard time for the a lot of part, especially those linked to carbon and high-growth technology, as valuation pressures and worldwide rate dynamics weighed on efficiency.
The petrochemical ETF considerably outperformed. Flows in Q1 2026 were modest and highly concentrated, showing selective allotment instead of broad market participation. In spite of weak efficiency, ETFs taped $27.1 million in net inflows, with just a small number of items bring in new capital. This indicates that financiers were targeting specific exposures, while lowering or turning out of others.
Trading activity stayed steady, with typical 30-day volumes around 33,000 shares, focused in a handful of larger and more liquid ETFs. Many activity appears to have taken place in the secondary market, making it possible for financiers to change positions without considerable primary creations or redemptions. While current geopolitical events have resulted in more financial pressure on GCC countries, the region stays durable and well capitalized to deal with the circumstance.
In January, Boreas launched its S&P Global High-end UCITS ETF, including a niche thematic exposure focused on worldwide luxury and consumer brands. ETFs by the CMA for cross-listing on ADX.
Q1 2026 showed some development relating to ETFs in the GCC. We anticipate more global and thematic ETFs to list in the GCC during 2026. While the dispute has affected belief 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 show strength, preserving favorable development momentum in the last few years. While conflicts in the broader region and international economic unpredictability stay a structural constraint, GCC countries have up until now limited their influence on domestic financial performance through strong financial positions, policy connection, and continual financial investment.
3.2 percent development in 2025, speeding up to 4.5 percent in 2026. Sees momentum improving, with GCC output growth projected to rise from 1.7 percent in 2024 to 3.3 percent on average in 2025, reflecting a shift toward more favorable general conditions.
The IMF's World Economic Outlook (October 2025) jobs international development reducing to 3.1 percent in 2026, with sophisticated economies around 1.5 percent and emerging market and developing economies just above 4 percent. On that comparison, a 4.44.5 percent GCC expansion would place the area materially ahead of the world average and slightly above (or broadly in line with) the emerging-market aggregate, enhancing the GCC's status as a reasonably high-growth pocketprovided that local danger conditions stay included and reform momentum holds.
Information 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 increase as federal governments broaden investment in services, infrastructure, and technology. 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 increasing financial investment in innovation and AI-related infrastructure.
Public-sector financial investment and reform stay main to sustaining this trend. Policy measures targeted at bring in foreign direct investment, relieving foreign ownership guidelines, expanding capital markets, and supporting private-sector involvement continue to underpin non-oil expansion and reduce the area's direct exposure to oil cost volatility. While hydrocarbons no longer control the growth outlook, oil profits are anticipated to play a helpful role in 2026.
The World Bank, on the other hand, tasks 3.2 percent growth in 2025, accelerating to 4.5 percent in 2026. The IMF Sees momentum improving, with GCC output growth predicted to increase from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift toward more favorable total conditions.
The IMF's World Economic Outlook (October 2025) jobs worldwide 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 expansion would place the region materially ahead of the world average and slightly above (or broadly in line with) the emerging-market aggregate, reinforcing the GCC's status as a reasonably high-growth pocketprovided that regional risk conditions stay consisted of and reform momentum holds.
Information from the GCC Statistical Center show that non-oil sectors currently represent more than 73 percent of overall GDP, a share that has continued to increase as federal governments broaden investment in services, infrastructure, and innovation. According to Oxford Economics, non-energy activity throughout the GCC is projected to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and increasing financial investment in innovation and AI-related facilities.
Why 2026 Is the Year of Niche Outsourcing ModelsPublic-sector investment and reform remain main to sustaining this trend. Policy steps targeted at bring in foreign direct financial investment, alleviating foreign ownership guidelines, expanding capital markets, and supporting private-sector involvement continue to underpin non-oil expansion and reduce the region's direct exposure to oil rate volatility. While hydrocarbons no longer dominate the development outlook, oil incomes are anticipated to play a supportive role in 2026.
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