Tabula Investment Management has launched the world's first Gulf Cooperation Council government bond ETF.
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."
