The Tabula GCC Sovereign USD Bonds UCITS ETF aims to offer exposure to government bonds issued by six GCC countries: Saudi Arabia, the UAE, Qatar, Oman, Bahrain and Kuwait.
It tracks the ICE Gulf Cooperation Council Government Bond ex-144a index, which was developed by Tabula and is composed of around 100 AA- to B-rated government bonds denominated in US dollars.
Tabula’s index has a 25% country cap and to be included bonds require a minimum one year maturity and a minimum amount outstanding of $500m. The index has a current yield of 5.2% and a duration of 7.8 years.
The ongoing charges figure for the ETF is 0.45%, a spokesperson said.
“With recession fears and continued economic uncertainty remaining a predominant global concern, investors may now find it an auspicious time to reassess asset allocation decisions, with a view to increasing diversification across regions and instrument types,” said Tabula CEO Michael John Lytle.
“Sovereign bonds issued by GCC countries have historically exhibited a superior Sharpe ratio when compared to broad EM, and still offer high income.
“As the GCC region undertakes numerous initiatives to diversify revenue streams away from oil and gas, a more granular allocation to the region could play a significant role in building more defensive portfolios.”
