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Schroder ISF Middle East Fund

Schroder is launching a middle east fund. The trading date will on 31 Jan 2008. It is cash only investment.

Earlier, SG Asset Management has also launched a middle east fund. The different between Schroder and SG is that, Schroder’s investment include Israel and Turkey in its portfolio while SG has Lebanon and Tunisia in its portfolio. Apart from that there might be other subtle differences in investment objectives, style etc.

Middle East is probably the last investment frontier yet to be explored. In the past, the region prohibited foreign investors. However, the region is opening up to embrace the foreign investors. For instance, on 30 Aug 2007, UAE allows family businesses to retain 70% of their shares after listing, up from 45% in the past (Source: Bloomberg 30 Aug 2007). The move would encourage more family businesses to be listed. Another example is on 25 Sept 2007, Saudi Arabia allows Gulf citizens including Kuwait and Qatar to trade shares freely for the first time (Source: Bloomberg 25 Sept 2007). This implied foreign can participate in Gulf Cooperation Council (’GCC’) countries.

One of the attractions of investing into this region is that it is lowly correlated to the world. The region has a population size of 220m of which 60% are under 30 years old (Source: JP Morgan, World Bank). The implication of huge young population is that these are the group that are willing to consume!