Franklin Templeton has today (29 October) launched two new products giving investors exposure to Saudi Arabia.
It a “strategic market” that the firm was keen to get exposure to given its fast-growing equirty market, which is currently valued at $2.8trn, according to global advisory service EVP Adam Spector.
Saudia Arbia also has the largest and fastest-growing bond market among Golf Cooperation Countries, hence its launch of the the Franklin Saudi Arabia Bond fund, which will invest in debt securities and obligations issued by government and corporate entities in the region.
It will be managed by the firm’s chief investment officer for fixed income, Mohieddine Kronfol, who said: “Despite this growth, and increasing share of emerging market issuance, debt metrics remain robust and sustainable, on a relative and absolute basis, so that investing in Saudi bonds can potentially deliver attractive returns with valuable diversification benefits.”
Its second product, the Franklin FTSE Saudi Arabia UCITS ETF, will track the FTSE Saudi Arabia 30/18 Capped index, which consists of 64 large and mid-cap Saudi Arabian equities. Dina Ting and Lorenzo Crosato will managed the fund.
Saudi stocks were only available to local investors until it was opened to foreign capital in 2015. Since then it has become over 4% of the FTSE Emerging Market index.
Spector anticipates further growth potential ahead for the market beyond the oil exports that have increased its wealth, accounting for 25% of the world’s conventional reserves.
“Through its Vision 2030 plan, the country continues to take steps to improve the business environment and diversify its economy away from oil and attract foreign investments,” he said.
“As one of the fastest growing economies globally, this is a strategic market for us, and we are excited to offer international investors the opportunity to participate in Saudi Arabia’s growth story.”
