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The sector also faced wider macro headwinds, including a more mindful policy backdrop in China and international risk-off sentiment driven by geopolitical tensions and higher energy rates. Thematic ETFs Had a hard time for the most part, especially those connected to carbon and high-growth technology, as valuation pressures and global rate characteristics weighed on efficiency.
Circulations in Q1 2026 were modest and extremely concentrated, showing selective allowance rather than broad market participation. Despite weak performance, ETFs recorded $27.1 million in net inflows, with just a small number of items drawing in 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. Most activity appears to have taken location in the secondary market, making it possible for investors to change positions without considerable primary developments or redemptions.
In January, Boreas introduced its S&P Global Luxury UCITS ETF, including a niche thematic direct exposure focused on global high-end and customer brands. ETFs by the CMA for cross-listing on ADX.
Q1 2026 showed some development connecting to ETFs in the GCC. We expect more international and thematic ETFs to list in the GCC during 2026. While the dispute has affected sentiment and prices throughout the quarter, it has driven more volume and interest in regional properties.
Despite continuous geopolitical tensions and security threats throughout the Middle East, the economies of the Gulf Cooperation Council (GCC) have actually continued to show resilience, maintaining favorable development momentum over the last few years. While conflicts in the broader region and worldwide economic uncertainty stay a structural restraint, GCC countries have actually up until now limited their influence on domestic economic performance through strong financial positions, policy continuity, and sustained financial investment.
The World Bank, on the other hand, jobs 3.2 percent development in 2025, speeding up to 4.5 percent in 2026. The IMF likewise sees momentum improving, with GCC output growth projected to increase from 1.7 percent in 2024 to 3.3 percent usually in 2025, reflecting a shift towards more favorable overall conditions.
Emerging Strategic Trends Defining the 2026 Regional EconomyThe IMF's World Economic Outlook (October 2025) tasks worldwide development relieving to 3.1 percent in 2026, with advanced economies around 1.5 percent and emerging market and establishing economies simply above 4 percent. On that comparison, a 4.44.5 percent GCC expansion would position the area 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 fairly high-growth pocketprovided that regional danger conditions remain consisted of and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors currently account for more than 73 percent of total GDP, a share that has continued to increase as federal governments expand investment in services, facilities, and innovation. According to Oxford Economics, non-energy activity across the GCC is predicted to grow by around 4.1 percent in 2026, supported by strong labor markets, improving credit conditions, and increasing investment in innovation and AI-related facilities.
Public-sector financial investment and reform stay main to sustaining this trend. Policy measures aimed at attracting foreign direct investment, alleviating foreign ownership rules, broadening capital markets, and supporting private-sector involvement continue to underpin non-oil expansion and minimize the area's exposure to oil rate volatility. While hydrocarbons no longer dominate the growth outlook, oil incomes are anticipated to play a supportive role in 2026.
The World Bank, on the other hand, projects 3.2 percent development in 2025, speeding up to 4.5 percent in 2026. The IMF Sees momentum improving, with GCC output growth predicted to increase from 1.7 percent in 2024 to 3.3 percent on average in 2025, showing a shift toward more favorable general conditions.
The IMF's World Economic Outlook (October 2025) projects worldwide growth alleviating to 3.1 percent in 2026, with advanced economies around 1.5 percent and emerging market and developing economies just above 4 percent. On that contrast, a 4.44.5 percent GCC expansion would position 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 regional risk conditions remain included and reform momentum holds.
Data from the GCC Statistical Center show that non-oil sectors already account for more than 73 percent of overall GDP, a share that has continued to increase as governments broaden financial investment in services, facilities, 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, improving credit conditions, and rising financial investment in technology and AI-related facilities.
Public-sector investment and reform stay central to sustaining this trend. Policy measures focused on bring in foreign direct investment, relieving foreign ownership guidelines, expanding capital markets, and supporting private-sector participation continue to underpin non-oil expansion and minimize the area's exposure to oil cost volatility. While hydrocarbons no longer dominate the development outlook, oil revenues are expected to play a supportive role in 2026.
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