Tabula Investment Management study reveals pension funds/institutional investors plan to increase their portfolio allocations to the (GCC) fixed income market
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Michael John Lytle CEO of Tabula Investment Management
New research from European ETF provider Tabula Investment Management Limited (Tabula) reveals that 88% of European professional investors expect pension funds and other institutional investors to increase their allocation to the Gulf Cooperation Council (GCC) fixed income market in the next 12 months, with 34% of respondents believing there will be a dramatic increase. Meanwhile, 91% of investors surveyed expect allocation levels to this asset class to increase by 2028.
Earlier this year, Tabula launched the first Gulf Cooperation Council (GCC) government bond ETF. The Tabula GCC Sovereign USD Bonds UCITS ETF (TGCC LN) 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).
Tabula’s new study with European professional investors – pension funds, fund managers and wealth managers, who collectively manage over US$250 billion of assets – found nearly all (97%) agree with the view that “investing in the GCC region enables investors to seek exposure to countries with rapid economic development and ambitious plans to liberalise and diversify their economies”.
Between now and 2028, 22% of European professional investors believe there will be a dramatic increase in the number of ETFs offering exposure to GCC sovereign USD bonds, and a further 65% believe there will be a slight increase. Nine out of ten (89%) of those surveyed expect this will directly lead to an increase in allocations to this asset class.
“The GCC is the largest oil producing region in the world. This, coupled with economic reforms throughout the region, means it represents an increasingly attractive investment opportunity. However, until recently there have been no fixed income ETFs providing direct exposure to this market. Sovereign bonds issued by GCC countries have historically exhibited a superior Sharpe ratio when compared to broad emerging markets, and still offer high income,” says Tabula CEO Michael John Lytle.
Source : ETFWorld.co.uk
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