Exchange Traded Funds or ETFs are great instruments for both investing and trading. They allow traders to simultaneously trade and invest in hundreds of assets. For investors, they provide dividends, for traders they are used as speculative instruments. This can be very beneficial for traders who want to speculate on a specific sector or market. Below, we will describe our main Saudi ETF picks you don’t want to miss. So, stay tuned.
Intro to ETFs
Exchange-traded funds are interesting asset classes where instead of buying just one stock or any other asset, you are buying a whole basket of bonds, stocks, commodities, or a combination of assets. These baskets are designed to track the performance of specific indices, sectors, or markets. Here is how ETFs work in simpler terms. The ETF sponsor who is behind the fund buys a bunch of securities to create a fund. After the creation is completed, the ETF sponsor issues shares of the fund. These shares can be bought or sold just like any other trading instrument, offering traders and investors the ability to speculate on a bunch of securities with just one share. The ETF sponsor keeps an eye on the portfolio to make sure it’s tracking the target index or market as closely as possible. When it’s time to cash out, investors sell their ETF shares back to the ETF sponsor, and they redeem the shares for the underlying securities in the portfolio. With reputable sponsors, ETFs can be a great source of income as they pay dividends on a regular basis. Typically, this happens yearly or quarterly. So, investors and traders can also gain long-term benefits by holding the asset.
Saudi ETFs to watch closely
For investors and traders who want to gain exposure to Saudi Arabian stock markets. To define important notes before we describe the ETFs let’s remember that the past performance of an ETF is not a guarantee of future results, and investing in any security, including ETFs, involves a degree of risk. For those who are interested in Saudi Arabia ETFs anyway, here are some of the most popular ETFs you want to know
iShares MSCI Saudi Arabia ETF (KSA) – NYSE Arca
NYSE Arca is the first all-electronic exchange in the USA to list ETFs and therefore very useful as it provides pricing data to TradingView charts. It provides charting and is a good source of information about ETFs. If we observe the chart below, it seems very easy to predict the next move, as KSA tends to follow certain patterns and trends.
With a lineup of more than 1250 ETFs globally, iShares offers various opportunities to its investors. The company has been in the ETFs market for more than two decades and advertises itself as an industry leader.
Franklin FTSE Saudi Arabia ETF (FLSA) – NYSE Arca
If we look at the FLSA daily chart, its moves feel similar to the KSA ETF. Therefore, this ETF too deserves close attention as it has the power to measure the pulse of Saudi Arabia’s stock markets. Franklin Templeton exposes you to Large and Mid-Cap Equities with its FLSA ETF. The Fund has been operating on the financial scene for decades and aims to assist investors to achieve financial freedom. They are one of the largest asset managers in the world, with total assets under its control being more than $1.5 trillion.
Global X MSCI SuperDividend EAFE ETF (EFAS) traded on NASDAQ
The charts of these securities look very predictive, similar to KSA, as it tends to follow its trends too, and uses moving averages as a dynamic support. Because of this, EFAS deserves attention and would be a nice addition to your ETFs watch list. From the three ETFs discussed, EFAS seems the most predictable instrument as it almost follows the trend like from a book page.
Although the instrument seems very trader-friendly, it still manages to go off-rails sometimes by completely ignoring the indicators, so investors and traders should watch it carefully and not jump on the first signal of buy or sell. Other than that, the EFAS will be a nice addition to a well-diversified portfolio, offering its holders the long Saudi Arabia stock market.
ETFs are great instruments as they offer the ability similar to indices to simultaneously short many underlying assets with just one instrument. Because of this advantage, traders and investors can gain exposure to certain markets by speculating on one asset. There are several ETFs from Saudi Arabia traders that should watch closely this year, iShares MSCI Saudi Arabia ETF (KSA) and Franklin FTSE Saudi Arabia ETF (FLSA). Both are traded on NYSE Arca and their price seems to respect important trading levels and trend movements. For experienced traders and investors, these instruments can have a positive impact. ETFs can be used for diversifying a portfolio together with monitoring certain markets or sectors. EFAS or Global X MSCI SuperDividend EAFE ETF is traded on Nasdaq and seems the most noteworthy asset as it tends to respect moving average dynamic support and resistance levels. These ETFs are traded on the most reputable exchanges, adding to their legitimacy and reputation. Franklin Templeton has been on the scene for decades.