Tabula Investment Management study: Pension funds/wealth managers/professional investors predict strong growth in the GCC fixed income market
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Michael John Lytle CEO of Tabula Investment Management
According to new research conducted by European ETF provider Tabula Investment Management Limited, most European professional investors, including pension funds, fund managers, and wealth managers, who collectively manage over US$250 billion, believe that the Gulf Cooperation Council (GCC) region will continue to outperform many developed economies in terms of GDP growth. This, in turn, is expected to positively influence the region’s accelerating fixed income market.
As a result of strong economic growth, counties in the region are seeing credit rating upgrades. 16% of professional investors surveyed by Tabula anticipate a dramatic increase in this trend, while 77% expect an increase.
Tabula recently launched the Tabula GCC Sovereign USD Bonds UCITS ETF (TGCC LN), which provides exposure to a broad portfolio of USD-denominated government bonds issued by the six GCC countries: Saudi Arabia, the UAE, Qatar, Oman, Bahrain and Kuwait.
Over the next five years, 90% of European institutional investors and wealth managers expect the level of issuance of bonds from GCC governments to increase, with 36% anticipating a dramatic rise. The average annual level of GCC bond issuance is currently around $80 billion, and roughly half of those surveyed expect it to rise to around $85 billion this year, with 33% anticipating the numbers to be even higher.
| Value of GCC bond issuance | Percentage of European professional investors who expect this value of GCC bond issuance in 2023 |
| Under $75 billion to $80 billion | 14% |
| $80 billion to $90 billion | 53% |
| $90 billion to $100 billion | 32% |
| Over $100 billion | 1% |
“The GCC region is experiencing a growing and expanding fixed income market, which is a testament to the maturing economic and fiscal environment in the area,” says Tabula CEO Michael John Lytle.
“This trend makes the GCC fixed income market an attractive option for investors seeking to broaden their search for yield and diversify their portfolios.”
Source : ETFWorld.co.uk
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