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The sector likewise faced wider macro headwinds, consisting of a more mindful policy background in China and worldwide risk-off sentiment driven by geopolitical stress and higher energy costs. Thematic ETFs also struggled for the many part, particularly those connected to carbon and high-growth innovation, as evaluation pressures and global rate dynamics weighed on efficiency.
Circulations in Q1 2026 were modest and extremely focused, showing selective allowance rather than broad market involvement. In spite of weak performance, ETFs tape-recorded $27.1 million in net inflows, with only a small number of items attracting new capital.
Trading activity remained steady, with average 30-day volumes around 33,000 shares, focused in a handful of bigger and more liquid ETFs. A lot of activity appears to have taken location in the secondary market, making it possible for investors to change positions without significant primary creations or redemptions.
In January, Boreas launched its S&P Global Luxury UCITS ETF, including a specific niche thematic direct exposure focused on global high-end and customer brand names. ETFs by the CMA for cross-listing on ADX.
Q1 2026 showed some progress relating to ETFs in the GCC. We anticipate more global and thematic ETFs to list in the GCC during 2026. While the conflict has actually impacted sentiment and costs during the quarter, it has driven more volume and interest in regional possessions.
Despite continuous geopolitical stress and security risks across the Middle East, the economies of the Gulf Cooperation Council (GCC) have continued to show strength, maintaining positive development momentum recently. While conflicts in the broader area and international financial uncertainty stay a structural restraint, GCC countries have actually so far restricted their effect on domestic financial efficiency through strong fiscal positions, policy continuity, and sustained investment.
The World Bank, on the other hand, projects 3.2 percent development in 2025, accelerating to 4.5 percent in 2026. The IMF Sees momentum improving, with GCC output growth projected to rise from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift toward more positive general conditions.
The IMF's World Economic Outlook (October 2025) jobs international growth relieving to 3.1 percent in 2026, with advanced economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that contrast, a 4.44.5 percent GCC expansion would position the area 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 fairly high-growth pocketprovided that regional danger conditions remain contained and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors currently represent more than 73 percent of overall GDP, a share that has actually continued to rise as federal governments expand investment in services, facilities, and innovation. 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 increasing investment in innovation and AI-related facilities.
Public-sector investment and reform remain main to sustaining this trend. Policy procedures aimed at drawing in foreign direct investment, relieving foreign ownership guidelines, expanding capital markets, and supporting private-sector participation continue to underpin non-oil growth and decrease the region's direct exposure to oil cost volatility. While hydrocarbons no longer dominate the growth outlook, oil profits are anticipated to play a supportive role in 2026.
3.2 percent growth in 2025, accelerating to 4.5 percent in 2026. Sees momentum improving, with GCC output development projected to increase from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift towards more positive total conditions.
The IMF's World Economic Outlook (October 2025) tasks global development alleviating 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 contrast, a 4.44.5 percent GCC expansion would position the area 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 relatively high-growth pocketprovided that regional threat conditions stay included and reform momentum holds.

Information from the GCC Statistical Center show that non-oil sectors already account for more than 73 percent of overall GDP, a share that has continued to rise as governments broaden financial investment in services, facilities, and innovation. According to Oxford Economics, non-energy activity across the GCC is predicted to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and increasing investment in innovation and AI-related infrastructure.
Navigating the Next Middle East Business EnvironmentPublic-sector financial investment and reform remain central to sustaining this trend. Policy steps targeted 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 area's direct exposure to oil cost volatility. While hydrocarbons no longer dominate the development outlook, oil incomes are anticipated to play an encouraging role in 2026.
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