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Key takeaways

  • The Middle East region is growing—fast. Countries in the Gulf Cooperation Council (GCC) have successfully reduced their dependence on oil and gas, opened their capital markets and diversified their economies.
  • Of the six members of the GCC, Saudi Arabia, UAE, Qatar, Oman, Kuwait and Bahrain, four are constituents of the MSCI Emerging Market Index, with a fifth, Oman potentially joining in 2027.
  • Saudi Arabia’s Vision 2030 is driving investment and economic growth, positioning the Kingdom as the premier destination for international events and enhancing its tourism offering.
  • Dubai’s new airport and solar power investment is fulfilling its sustainable tourist development plan with a goal of raising renewables share of the energy mix and tourism’s contribution to GDP.
  • Investment in Qatar’s North Field gas expansion will double liquified natural gas production by 2030.
  • Kuwait is showing signs of a long-awaited economic awakening. Its recently approved a sovereign debt law and new mortgage law, could unlock growth in the banking, real estate and construction sectors.

The structural reforms, improved governance and rising investor confidence have contributed to a decline in the equity risk premium from a 10 year high of 6.6% in 2016 to 2.4% in March 2025. A lower equity risk premium should, other things equal, lead to a decline in the cost of capital for a company, potentially increasing returns for shareholders in GCC companies.

WHAT ARE THE RISKS

All investments involve risks, including possible loss of principal.

Equity securities are subject to price fluctuation and possible loss of principal.

International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in companies in a specific country or region may experience greater volatility than those that are more broadly diversified geographically.

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IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.

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