Middle East: Fixed income, equity, local and international assets – a demand for all
Fund managers in the region are finding demand for a wide range of products, even though many investors still have very local interests at heart.
Product is an exciting field in a state of rapid evolution in the Middle East. Local managers are moving rapidly from country-specific equity funds to a host of other asset classes; internationals are finding appetite for a wide range of their global product book.
For local managers, equities remain the dominant asset class, although that is shrinking somewhat. Looking at the asset allocation of local mutual funds in Saudi Arabia and Kuwait from 2005 to the middle of 2007, the proportion of assets that is in shares was 72% in 2005, before falling with the 2006 stock market crash and hitting 52% in 2007.
These have traditionally been local country funds. Almost every fund manager of any consequence in the Gulf offers one in their home market. The Dubai-based research group Zawya tracks 208 products, and 93 of them are single-country equity funds.