FLSA - FLSA: Preferable To KSA, But Not A Good Time To Pursue

2025-04-17 07:45:00 ET

Summary

• Saudi equities, while still down this year, have underperformed emerging markets and outperformed global markets.
• We examine how FLSA, a little-known ETF that covers Saudi equities, stacks up against its larger peer- KSA, and find that the former, while hardly flawless, does pretty well.
• Saudi's prospects are still heavily reliant on oil, and conditions here don't look too alluring.
• FLSA is currently witnessing strong bearish momentum, and its valuations are pricey.

Introduction

The Franklin FTSE Saudi Arabia ETF ( FLSA ), which provides focussed access to Saudi Arabian equities (of which over two-thirds of the portfolio are giant caps and large-caps), hasn’t had the sunniest start to the year. While there is some comfort in seeing it outperform global stocks by around 447bps, it hasn’t quite managed to fare better than other emerging market equities that are almost flat YTD (on average). Incidentally, all three pockets are in the red this year....

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