Saudi Arabia’s asset management sector demonstrated notable resilience during the opening quarter of 2026, even managing minor growth despite peak geopolitical volatility from the regional conflict. A new report by Fitch Ratings estimates that industry assets under management (AUM) surged 17% year-on-year to clear $340 billion by the end of Q1—representing roughly 26% of national GDP. This upward trajectory is expected to continue, with total AUM projected to cross the $400 billion milestone by 2027. Sector expansion is primarily anchored by accommodative regulatory updates, lower entry barriers, and intensifying engagement from domestic, foreign, institutional, and retail investors. International and regional capital market institutions capitalized on this growth, boosting their share of industry revenue to 20% in the first quarter of the year, up from 15% in mid-2025.
While bank-affiliated asset managers still command about 60% of industry revenue, private funds continue to dictate the market’s layout. They hold a dominant 54% share of total AUM—fueled by a 26% year-on-year increase concentrated heavily in real estate (54%) and equities (30%). Discretionary portfolio management (DPM) holds a 28% market share despite a mild 0.4% year-on-year contraction, while public funds comprise the remaining 18%. Driven primarily by money-market instruments, public fund AUM climbed 20% year-on-year. Simultaneously, broader equity capitalization on the Tadawul grew 7% year-on-year by late May, shaking off intense wartime volatility. The Islamic finance footprint remains near absolute, with over 97% of listed mutual funds operating under Sharia-compliant frameworks. Furthermore, sukuk (Islamic bonds) comprised over 60% of the Kingdom’s outstanding debt capital market volume by May, with 98% of Fitch-rated Saudi sukuk securing investment-grade statuses—over 90% of which sit comfortably in the ‘A’ rating bracket with stable outlooks.
The recent diplomatic breakthrough between the United States and Iran has the potential to cultivate a far more stable macroeconomic and credit environment, though analysts warn that any implementation delays or fresh friction could disrupt this outlook. Government-led updates are expected to provide an additional layer of stability. The Capital Market Authority (CMA) has floated a draft framework to optimize securities business efficiency, headlined by a proposed 60% reduction in the minimum capital threshold required for custody activities. Alongside opening secondary markets to international participants, the CMA has greenlit simplified investment fund rules and robo-advisory regulations, running parallel to the Public Investment Fund’s (PIF) newly signed memorandums with international asset managers.
International trading desks have responded strongly to these structural changes. Foreign ownership accounted for 44% of total buy orders and 37% of sell orders on the main exchange in early June, scaling up from 34% and 30% respectively in late 2025. Total foreign ownership settled at 12.6% of the free float by mid-June. Conversely, foreign participation in primary domestic government bond issuances slid to roughly 8% in the first quarter as the active conflict briefly dented risk appetite. Looking ahead, liquidity and asset class diversification are poised for a significant structural buffer following JP Morgan’s announcement that Saudi Arabia will be integrated into its Government Bond Index – Emerging Markets in 2027. Despite these positive indicators, the local asset management ecosystem remains inherently tied to broader systemic risks, including oil price fluctuations, global interest rate shifts, and lingering regional geopolitical exposures.
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