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The sector also dealt with more comprehensive macro headwinds, including a more mindful policy background in China and international risk-off sentiment driven by geopolitical tensions and higher energy rates. Thematic ETFs also struggled for the many part, particularly those linked to carbon and high-growth innovation, as appraisal pressures and international rate characteristics weighed on efficiency.
The petrochemical ETF significantly outperformed. Circulations in Q1 2026 were modest and extremely concentrated, showing selective allowance rather than broad market participation. In spite of weak efficiency, ETFs taped $27.1 million in net inflows, with only a little number of products attracting brand-new capital. This suggests that investors were targeting specific direct exposures, while minimizing or rotating out of others.
Trading activity stayed consistent, with average 30-day volumes around 33,000 shares, focused in a handful of larger and more liquid ETFs. A lot of activity appears to have happened in the secondary market, allowing investors to change positions without significant main creations or redemptions. While recent geopolitical occasions have actually resulted in more monetary pressure on GCC countries, the region remains resistant and well capitalized to handle the scenario.
In January, Boreas released its S&P Global High-end UCITS ETF, including a niche thematic exposure focused on global luxury and consumer brands. ETFs by the CMA for cross-listing on ADX.
Q1 2026 showed some progress connecting to ETFs in the GCC. We anticipate more international and thematic ETFs to list in the GCC during 2026. While the dispute has actually impacted sentiment and rates during the quarter, it has actually driven more volume and interest in local assets.
Despite ongoing geopolitical stress and security risks throughout the Middle East, the economies of the Gulf Cooperation Council (GCC) have continued to show durability, preserving favorable development momentum recently. While disputes in the wider area and international financial unpredictability remain a structural restraint, GCC nations have so far limited their effect on domestic economic efficiency through strong fiscal positions, policy continuity, and continual investment.
The World Bank, on the other hand, jobs 3.2 percent growth in 2025, speeding up 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, reflecting a shift toward more positive total conditions.
Expanding Industrial Growth Across Dubai and the GCCThe IMF's World Economic Outlook (October 2025) projects worldwide development alleviating 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 contrast, a 4.44.5 percent GCC growth would place the region 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 relatively high-growth pocketprovided that local threat conditions stay contained and reform momentum holds.
Data from the GCC Statistical Center reveal that non-oil sectors already account for more than 73 percent of overall GDP, a share that has actually continued to increase as federal governments expand financial investment in services, facilities, and technology. According to Oxford Economics, non-energy activity across the GCC is projected to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and rising financial investment in innovation and AI-related facilities.
Public-sector financial investment and reform stay central to sustaining this trend. Policy measures focused on drawing in foreign direct investment, alleviating foreign ownership guidelines, broadening capital markets, and supporting private-sector involvement continue to underpin non-oil expansion and decrease the area's exposure to oil price volatility. While hydrocarbons no longer dominate the growth outlook, oil earnings are expected to play a helpful function in 2026.
The World Bank, on the other hand, jobs 3.2 percent development in 2025, accelerating to 4.5 percent in 2026. The IMF Sees momentum improving, with GCC output development 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) tasks worldwide growth relieving to 3.1 percent in 2026, with innovative 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 put the area materially ahead of the world average and a little above (or broadly in line with) the emerging-market aggregate, strengthening the GCC's status as a relatively high-growth pocketprovided that local threat conditions remain consisted of and reform momentum holds.
Information from the GCC Statistical Center reveal that non-oil sectors currently account for more than 73 percent of total GDP, a share that has actually continued to increase as federal governments broaden financial investment in services, infrastructure, and innovation. According to Oxford Economics, non-energy activity across the GCC is forecasted 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.
Expanding Industrial Growth Across Dubai and the GCCPublic-sector financial investment and reform remain central to sustaining this pattern. Policy procedures targeted at drawing in foreign direct financial investment, relieving foreign ownership rules, expanding capital markets, and supporting private-sector involvement continue to underpin non-oil growth and lower the region's exposure to oil price volatility. While hydrocarbons no longer dominate the growth outlook, oil earnings are expected to play a supportive role in 2026.
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