GCC allocations have fallen back from their 2025 highs, but there is little evidence that GEM managers are abandoning the region. Instead, the holdings data points to an internal rotation, with Saudi Arabia gaining ground at the expense of the UAE. A few highlights:

• Ownership remains resilient: average GCC exposure has fallen to 2.12%, but three-quarters of GEM funds remain invested, close to the highest level on record.
• Saudi Arabia is gaining ground: around 10% of funds have moved from overweight to underweight the UAE over the past six months, while positioning in Saudi Arabia has moved in the opposite direction.
• The stock story is broadening: managers have reduced exposure to major UAE property and banking names, including Emaar Properties and Aldar Properties, while interest has grown in Saudi companies such as Rasan Information Technology, Jarir Marketing and Riyad Bank.