KUW8 undergoes last rebalance before Kuwait’s inclusion in MSCI

LONDON, March 26: The KMEFIC FTSE Kuwait Equity ETF (KUW8) underwent its quarterly rebalance on 19th March 2020, resulting in one addition and one deletion, according to a report by HANetf.

KMEFIC FTSE Kuwait Equity UCITS ETF was issued via the HANetf white-label ETF platform with KMEFIC (Kuwait & Middle East Financial Investment Company) as main sponsor and advisor. KMEFIC are a provider of asset management, brokerage and wealth management services headquartered in Kuwait.

Tracking the FTSE Kuwait AllCap 15% Capped Index, the KMEFIC FTSE Kuwait Equity UCITS ETF enables investors to gain exposure to 17 Kuwaiti companies with a combined market capitalisation of ~$US28.1 Billion[1]. Rebalances occur quarterly at which constituents are capped at 15% to reduce concentration in larger-cap securities. Having 17 companies represented in the index makes it the most diversified Kuwaiti ETF available globally. The ETF has a TER of 80bps.

Added: Mabenee (MABANEE KK) Sector: Real Estate. Mabanee was listed on the main market of the Kuwait Stock Exchange in 2009. It operates under five main business lines: real estate development, real estate project management, logistics, shopping mall construction and management and real estate investment portfolios. Mabanee enters the ETF with an initial weight of 4.25%.

Deleted: Mezzan Holding Co (MEZZAN KK) – Sector: Food & Beverage - A manufacturer and distributor of food, beverages, pharmaceutical and FMCG.

Abdullah Al-Basairi, Co-creator of the KMEFIC FTSE Kuwait Equity UCITS

ETF (KUW8) said: “This marks the final rebalance leading up to the MSCI inclusion in May/June. Last year Goldman Sachs estimated that flows of USD $2.3 billion in passive flows and $8billion of active flows into Kuwait stocks. With March volatility leading to a price correction in the local Kuwaiti market, investors who missed the first window on gaining the post-announcement premiums in December2019 /January 2020 could have a second opportunity in March and April to build a position coming into the inclusion period in May.”

Ignatius Faissal, Director of Product Management at HANetf said: “The Kuwaiti economy continues to diversify away from its oil-rich roots as part of the Vision 2035 project. This is being reflected in the addition of real-estate management companies to an ETF that already includes Banks, financial services providers, telecoms and industrial goods.”

For more information on the ETF, visit the KMEFIC FTSE Kuwait Equity ETF (KUW8) fund page.

For more information on the use of ETFs, read the article Why trade a Kuwait ETF over single stocks?

Read more about Kuwait’s inclusion on the MSCI Emerging Markets Index and what it means for investors.

When you trade ETFs, your capital is at risk. For professional investors only. This content is issued by HANetf Limited, an appointed representative of Mirabella Advisers LLP, which is authorised and regulated by the Financial Conduct Authority.

[1] Goldman Sachs Equity Research Report ‘Your questions on potential MSCI EM inclusion answered’ June 25th 2019

[2] FTSE Kuwait All Cap 15% Capped Index