Despite ongoing wars and heightened geopolitical tensions in the region, stock markets in the Middle East overall are outperforming the rest of the world so far in 2018, based on a set of exchange-traded funds.

WisdomTree Middle East Dividend (GULF) – the lone multi-country regional US-listed ETF for the Mideast – is up 9.3% year to date through Wednesday’s close (June 27), well ahead of the rest of the field. The top-three country allocations for the fund are Saudi Arabia (31%), United Arab Emirates (21%), and Qatar (19%), according to ETFdb.com.

One factor supporting the GULF portfolio is last week’s MSCI decision to add more than 30 Saudi Arabia shares to its emerging markets index in 2019 – a change that adds up to nearly 3% of the benchmark’s holdings.

“Saudi inclusion marks a significant milestone for a market that until now has been dominated by domestic investors,” notes James McManus, investment manager at online broker Nutmeg, via FT.

US stocks are the year’s second-strongest regional performer for global shares. The SPDR S&P 500 (SPY) is ahead by 1.8%.

The worst regional performer year to date is Latin America. The formerly high-flying region, which was the leader early in 2018, is now off by nearly 16% this year through Wednesday’s close, based on iShares Latin America 40 (ILF). The fund’s top-three country allocations: Brazil (48%), Mexico (23%), and Chile (10%), according to ETFdb.com.

Political factors are part of the headwinds for ILF. This Sunday’s presidential election in Mexico is expected to deliver a victory to Andrés Manuel López Obrador, a populist who analysts say poses a threat to country’s market-oriented reforms in recent years.

Meanwhile, Brazil’s general election in October is seen as “the most uncertain since the end of the country’s military regime, according to a new study by Itau bank,” Bloomberg reports. “The uncertainty comes from the high percentage of voters who still have no candidate, as well as the dispersal of votes between the large number of presidential contenders.”

ILF’s technical profile is the weakest of all the ETFs listed above. The fund is only one of two ETFs in this regional set of portfolios with its 50-day moving average below its 200-day average. The other is iShares MSCI Japan (EWJ), although this fund’s 50-day average is only fractionally below its 200-day average. By comparison, ILF’s 50-day average is far below its 200-day average, which suggests that further weakness for the ETF is likely in the near term.