GULF starts out by screening for the 100 largest companies by market-cap size in its eight-country investment horizon. But it weights each by dividends paid. And if any single country grows to more than a third of the benchmark, it'll automatically rebalance each year back to no more than 25% of the total weighting.

The dividend yield on GULF's index now is running at 5.38%, more than double what the S&P 500 is paying, points out Schwartz. "If you're an investor interested in that region, you might not trust the accounting standards of these countries. But at least you'll know these companies are strong enough to pay dividends."

WisdomTree's emphasis on dividends also can help serve as a cushion in such tiny and often-volatile markets, he adds. "We find that a fundamentally weighted methodology works best in markets where stock prices tend to rise much more quickly than their underlying fundamentals," Schwartz said. "In a market like the Middle East, with companies that tend be smaller than even emerging markets, you've got to worry about hot money chasing fast-rising stocks."

Country weightings also vary between the two ETFs. Egypt tops PMNA at 20.18%, while it only represents 13.77% in GULF (see chart below).

And sector weightings are also quite different between the two. So are market-cap allocations between the two portfolios and top components.

But the biggest similarity could be the key reason why investors find both attractive new alternatives for their portfolios. Each sports a bondlike correlation to U.S. stocks. In the case of GULF's index, it's around 0.22 over the past three years. To put that into perspective, the MSCI Emerging Markets Index has a correlation more than three times that level.

Correlation numbers, of course, measure how closely different indexes or funds move in unison. The closer to 1.0, the more related their performances are likely to be through different markets over time.

A Glance At GULF ...

... And At PMNA

Source: WisdomTree and Invesco PowerShares

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