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The sector also faced wider macro headwinds, consisting of a more cautious policy backdrop in China and international risk-off belief driven by geopolitical tensions and greater energy prices. Thematic ETFs also struggled for the most part, particularly those connected to carbon and high-growth innovation, as assessment pressures and international rate characteristics weighed on efficiency.
Circulations in Q1 2026 were modest and extremely concentrated, showing selective allotment rather than broad market participation. In spite of weak efficiency, ETFs tape-recorded $27.1 million in net inflows, with only a small number of products attracting new capital.
Trading activity stayed consistent, with typical 30-day volumes around 33,000 shares, concentrated in a handful of larger and more liquid ETFs. Many activity appears to have taken location in the secondary market, allowing investors to change positions without significant primary productions or redemptions.
In January, Boreas launched its S&P Global Luxury UCITS ETF, adding a niche thematic exposure focused on global high-end and consumer brands. ETFs by the CMA for cross-listing on ADX.
Q1 2026 revealed some progress connecting to ETFs in the GCC. We anticipate more global and thematic ETFs to list in the GCC throughout 2026. While the conflict has affected sentiment and rates during the quarter, it has actually driven more volume and interest in local possessions.
In spite of ongoing geopolitical tensions and security threats throughout the Middle East, the economies of the Gulf Cooperation Council (GCC) have continued to demonstrate durability, keeping positive growth momentum recently. While conflicts in the larger region and worldwide financial unpredictability remain a structural constraint, GCC countries have so far limited their effect on domestic financial performance through strong fiscal positions, policy continuity, and sustained financial investment.
The World Bank, on the other hand, projects 3.2 percent development in 2025, accelerating to 4.5 percent in 2026. The IMF likewise sees momentum improving, with GCC output development forecasted to rise from 1.7 percent in 2024 to 3.3 percent typically in 2025, reflecting a shift toward more positive total conditions.
How to Succeed in Saudi Arabia's Competitive Center LandscapeThe IMF's World Economic Outlook (October 2025) projects global growth reducing to 3.1 percent in 2026, with advanced economies around 1.5 percent and emerging market and establishing economies just above 4 percent. On that comparison, a 4.44.5 percent GCC growth 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 relatively high-growth pocketprovided that local risk conditions stay contained and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors already represent more than 73 percent of total GDP, a share that has actually continued to increase as federal governments broaden financial investment in services, infrastructure, and technology. According to Oxford Economics, non-energy activity throughout the GCC is predicted 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 infrastructure.
Public-sector financial investment and reform remain central to sustaining this pattern. Policy steps focused on bring in foreign direct investment, easing foreign ownership guidelines, broadening capital markets, and supporting private-sector participation continue to underpin non-oil expansion and decrease the area's exposure to oil price volatility. While hydrocarbons no longer dominate the growth outlook, oil revenues are anticipated to play a supportive role in 2026.
3.2 percent growth in 2025, speeding up to 4.5 percent in 2026. Sees momentum improving, with GCC output growth predicted to rise 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 growth 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 growth would position the area materially ahead of the world average and a little above (or broadly in line with) the emerging-market aggregate, enhancing the GCC's status as a reasonably high-growth pocketprovided that regional threat conditions remain contained and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors already 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 innovation. According to Oxford Economics, non-energy activity across the GCC is forecasted to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and increasing financial investment in innovation and AI-related facilities.
Public-sector investment and reform remain central to sustaining this trend. Policy steps intended at drawing in foreign direct investment, easing foreign ownership guidelines, broadening capital markets, and supporting private-sector participation continue to underpin non-oil expansion and decrease the area's direct exposure to oil cost volatility. While hydrocarbons no longer dominate the growth outlook, oil earnings are expected to play a helpful role in 2026.
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