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The sector also dealt with more comprehensive macro headwinds, including a more mindful policy background in China and global risk-off sentiment driven by geopolitical tensions and higher energy costs. Thematic ETFs Had a hard time for the many part, especially those connected to carbon and high-growth innovation, as valuation pressures and worldwide rate characteristics weighed on efficiency.
The petrochemical ETF substantially outshined. Flows in Q1 2026 were modest and highly focused, showing selective allotment instead of broad market participation. Regardless of weak efficiency, ETFs tape-recorded $27.1 million in net inflows, with just a little number of items attracting new capital. This shows that financiers were targeting specific exposures, while reducing or rotating out of others.
Trading activity stayed constant, with average 30-day volumes around 33,000 shares, focused in a handful of larger and more liquid ETFs. Most activity appears to have taken place in the secondary market, enabling financiers to adjust positions without considerable primary developments or redemptions. While current geopolitical events have actually led to more monetary pressure on GCC countries, the area stays durable and well capitalized to deal with the scenario.
In January, Boreas introduced its S&P Global Luxury UCITS ETF, including a niche thematic direct exposure focused on global luxury and customer brand names. Momentum continued into April with the approval of KraneShares AGIX and KWIN ETFs by the CMA for cross-listing on ADX. These funds are anticipated to launch in April pending a last approval from ADX.
Q1 2026 showed some progress associating with ETFs in the GCC. We anticipate more international and thematic ETFs to list in the GCC during 2026. While the dispute has actually affected sentiment and costs throughout the quarter, it has actually driven more volume and interest in regional possessions.
Regardless of continuous geopolitical tensions and security dangers across the Middle East, the economies of the Gulf Cooperation Council (GCC) have actually continued to show resilience, preserving positive growth momentum in the last few years. While disputes in the larger region and global economic unpredictability remain a structural restraint, GCC countries have actually so far restricted their impact on domestic financial performance through strong fiscal positions, policy connection, and continual financial investment.
3.2 percent growth in 2025, speeding up to 4.5 percent in 2026. Sees momentum improving, with GCC output development forecasted to rise from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift towards more favorable total conditions.
The IMF's World Economic Outlook (October 2025) tasks international growth reducing to 3.1 percent in 2026, with innovative economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that contrast, a 4.44.5 percent GCC growth would place the area materially ahead of the world average and somewhat 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 contained and reform momentum holds.
Data from the GCC Statistical Center reveal that non-oil sectors currently represent more than 73 percent of total GDP, a share that has actually continued to rise as federal governments expand investment in services, facilities, and technology. According to Oxford Economics, non-energy activity throughout the GCC is forecasted to grow by around 4.1 percent in 2026, supported by strong labor markets, enhancing credit conditions, and increasing investment in innovation and AI-related infrastructure.
Public-sector financial investment and reform remain main to sustaining this trend. Policy measures aimed at bring in foreign direct financial investment, alleviating foreign ownership guidelines, expanding capital markets, and supporting private-sector participation continue to underpin non-oil growth and lower the area's exposure to oil cost volatility. While hydrocarbons no longer control the growth outlook, oil revenues are anticipated to play a supportive function in 2026.
The World Bank, on the other hand, tasks 3.2 percent growth in 2025, accelerating to 4.5 percent in 2026. The IMF likewise sees momentum improving, with GCC output growth forecasted to increase from 1.7 percent in 2024 to 3.3 percent typically in 2025, reflecting a shift towards more favorable general conditions.
The IMF's World Economic Outlook (October 2025) tasks worldwide development easing to 3.1 percent in 2026, with sophisticated economies around 1.5 percent and emerging market and establishing economies just above 4 percent. On that contrast, a 4.44.5 percent GCC growth would put the area materially ahead of the world average and a little above (or broadly in line with) the emerging-market aggregate, reinforcing the GCC's status as a relatively high-growth pocketprovided that local danger conditions remain contained and reform momentum holds.
Data from the GCC Statistical Center reveal that non-oil sectors currently represent more than 73 percent of total GDP, a share that has actually continued to rise as federal governments expand investment in services, facilities, 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 innovation and AI-related facilities.
Future-Focused Operational Models Within 2026 MarketsPublic-sector financial investment and reform remain main to sustaining this trend. Policy measures focused on attracting foreign direct financial investment, easing foreign ownership guidelines, broadening capital markets, and supporting private-sector participation continue to underpin non-oil expansion and minimize the region's direct exposure to oil rate volatility. While hydrocarbons no longer dominate the development outlook, oil earnings are anticipated to play a supportive function in 2026.
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