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The sector also faced wider macro headwinds, consisting of a more cautious policy backdrop in China and global risk-off sentiment driven by geopolitical tensions and higher energy rates. Thematic ETFs also had a hard time for the most part, particularly those linked to carbon and high-growth innovation, as evaluation pressures and international rate dynamics weighed on performance.
The petrochemical ETF significantly outshined. Flows in Q1 2026 were modest and extremely concentrated, showing selective allocation rather than broad market participation. Regardless of weak performance, ETFs tape-recorded $27.1 million in net inflows, with just a small number of items bring in new capital. This suggests that financiers were targeting particular direct exposures, while decreasing or rotating out of others.
Trading activity stayed consistent, with typical 30-day volumes around 33,000 shares, concentrated in a handful of bigger and more liquid ETFs. Most activity appears to have actually occurred in the secondary market, making it possible for financiers to adjust positions without considerable primary creations or redemptions. While recent geopolitical occasions have actually resulted in more financial pressure on GCC countries, the region stays durable and well capitalized to deal with the circumstance.
In January, Boreas introduced its S&P Global High-end UCITS ETF, including a niche thematic exposure focused on worldwide high-end and customer brand names. ETFs by the CMA for cross-listing on ADX.
Q1 2026 showed some development associating with ETFs in the GCC. We anticipate more global and thematic ETFs to list in the GCC during 2026. While the conflict has actually affected sentiment and rates during the quarter, it has driven more volume and interest in regional possessions.
Despite continuous geopolitical stress and security risks across the Middle East, the economies of the Gulf Cooperation Council (GCC) have continued to show strength, preserving positive development momentum over the last few years. While disputes in the wider region and international economic unpredictability remain a structural restriction, GCC nations have up until now limited their effect on domestic financial efficiency through strong financial positions, policy continuity, and continual investment.
The World Bank, on the other hand, tasks 3.2 percent growth in 2025, accelerating to 4.5 percent in 2026. The IMF similarly sees momentum improving, with GCC output development predicted to rise from 1.7 percent in 2024 to 3.3 percent typically in 2025, showing a shift towards more positive overall conditions.
The Advantages for Operational Efficiency in 2026The IMF's World Economic Outlook (October 2025) tasks worldwide development relieving to 3.1 percent in 2026, with sophisticated economies around 1.5 percent and emerging market and developing economies just above 4 percent. On that comparison, a 4.44.5 percent GCC expansion would put the region materially ahead of the world average and slightly above (or broadly in line with) the emerging-market aggregate, enhancing the GCC's status as a reasonably high-growth pocketprovided that local danger conditions remain consisted of and reform momentum holds.
Data from the GCC Statistical Center reveal that non-oil sectors currently account for more than 73 percent of overall GDP, a share that has continued to rise as federal governments expand investment in services, infrastructure, and technology. According to Oxford Economics, non-energy activity across the GCC is projected to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and increasing investment in technology and AI-related facilities.
Public-sector financial investment and reform stay central to sustaining this pattern. Policy steps targeted at drawing in foreign direct investment, relieving foreign ownership guidelines, broadening capital markets, and supporting private-sector participation continue to underpin non-oil growth and reduce the area's exposure to oil cost volatility. While hydrocarbons no longer dominate the development outlook, oil incomes are expected to play an encouraging function in 2026.
3.2 percent growth in 2025, accelerating to 4.5 percent in 2026. Sees momentum improving, with GCC output development projected to increase from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift toward more favorable overall conditions.
The IMF's World Economic Outlook (October 2025) jobs international development alleviating to 3.1 percent in 2026, with sophisticated economies around 1.5 percent and emerging market and developing economies simply above 4 percent. On that comparison, a 4.44.5 percent GCC expansion would put the area materially ahead of the world average and slightly above (or broadly in line with) the emerging-market aggregate, reinforcing the GCC's status as a fairly high-growth pocketprovided that regional danger conditions remain contained and reform momentum holds.
Information from the GCC Statistical Center reveal that non-oil sectors currently represent more than 73 percent of overall GDP, a share that has actually continued to rise as federal governments expand investment in services, infrastructure, and technology. According to Oxford Economics, non-energy activity across the GCC is projected to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and rising financial investment in technology and AI-related facilities.
Public-sector investment and reform stay main to sustaining this trend. Policy steps focused on attracting foreign direct investment, easing foreign ownership guidelines, broadening capital markets, and supporting private-sector involvement continue to underpin non-oil growth and minimize the area's direct exposure to oil price volatility. While hydrocarbons no longer control the development outlook, oil earnings are expected to play a helpful function in 2026.
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