Middle East funds

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Although there might be investment opportunity from the rise of Middle East funds created recently, it’s not for the risk-averse. For example, Schroder International Selection Fund Middle East, with investments in Bahrain, Egypt, Israel, Kuwait, Qatar, Saudi Arabia, Turkey and United Arab Emirates, returned 8.29 percent in December 2007. But the T. Rowe Price Africa & Middle East Fund, which invests primarily in Bahrain, Egypt, Jordan, Kenya, Lebanon, Morocco, Nigeria, Oman, Qatar, South Africa and United Arab Emirates, has a year-to-date return of negative-3.65 percent.

On the one hand, “six member countries of the Gulf Cooperative Council are investing more into infrastructure than even China, a total of more than two times their GDP,” which might boost the economy, says Bruce Fenton of Atlantic Financial, which runs the new Arab Gateway Fund–US. (Returns were not provided to CD for that fund.) He says infrastructure investment results “can be seen in Bahrain, Dubai, Abu Dhabi and Saudi Arabia.” On the other hand, there’s the matter of thousands of years of turmoil in this region, which leads Wayne Rogers, president of Wayne M. Rogers and Co., to say there’s too much risk.