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QAT: A High Dividend Single-Country ETF With A Near-Zero Beta

Published Wed, 21 Aug 2019 06:52:08 -0400 on Seeking Alpha

(Source - Sohel Patel/Pexels)
The iShares MSCI Qatar ETF (QAT) has to be one of the most interesting single-country ETFs on the market today. Although it is an equity ETF, it has almost no daily correlation with the S&P 500 or other major indices. Despite its lower systemic risks, it has low valuations and pays a dividend yield of over 5%. Even better, it is in one of the fastest-growing areas of the world.
That said, everything is not perfect with Qatar's economy and geopolitical position. The ETF is highly exposed to the financial sector and the country is currently in a deflationary recession. Further, the country is highly dependent on crude oil and has struggled to see economic growth for the past seven years. And, of course, we cannot forget the ongoing Qatar-Saudi Arabia diplomatic crisis.
Let's dig into the financial and economic data and see if Qatar is the highly diversified value buy it appears or yet another value trap that could be catalyzed by geopolitical tensions.
The iShares MSCI Qatar ETF
As I often say, it is as important to know your product as it is to have an opinion on it, particularly with single-country ETFs. Too often, investors buy a fund only to find it does not hold exactly what they expect.
QAT is relatively new (inception 2014) and still largely unknown by the broad investment community. The fund currently has $48M in assets under management and does not have options available so it is less liquid than most funds. Let's take a... Read more


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