A third exchange-traded fund investing in Middle Eastern oil kingpins is now out, offering a more concentrated and a bit pricier portfolio.

The Gulf States Index ETF (NYSEArca: MES) launched on Thursday. It tracks a Dow Jones index of public companies headquartered or doing most of their business in Gulf Cooperation Council countries.

The GCC was set up in 1981 both as an economic alliance as well as a way for the six-member nations to protect themselves against geopolitical threats in the region. Each also endorses free-trade policies and has set up a common marketplace to exchange goods and services.

Major corporations are working to establish a presence in the GCC countries. General Electric's revenues in the region jumped 50% last year. The U.S. conglomerate also just set up a joint venture there to have a GE Capital unit in the Mideast.

Focused Exposure

"Given the current completive landscape, if an ETF investor wants pure exposure to the countries around the Persian Gulf, this is the only one focused on the GCC states," said Harvey Hirsch, Van Eck Global's senior vice president.

As of July 10, the ETF's benchmark included five GCC countries: Kuwait (52.3%); United Arab Emirates (25.8%); Qatar (14.9%); Oman (4.4%) and Bahrain (2.6%). Saudi Arabia, a driving force behind formation of the GCC, was not listed in the index at that time.

"Currently, the index doesn't include stocks from Saudi Arabia because the country isn't open to foreign investment," said Adam Phillips, managing director at Van Eck.

The major sector weightings covered by the underlying index for MES included: banks (38.5%); financial services (21.6%); real estate (10.5%); technology (7.6%); construction and materials (7.2%); industrial goods and services (7.1%); and telecom (3.6%).

The index has gained more than 6.5% so far this year and 28%-plus in the past 12 months, according to Dow Jones.

Large-cap stocks, or those with more than $6 billion in market capitalization, made up 37.7% of the benchmark earlier this month. Mid-caps, starting at around $1.5 billion in size, comprised 47.1% of the weightings. At the same time, small-caps held about 15.2%.

The ETF's index tracks 40 companies in the GCC using a modified market-cap size weighting methodology. It's expected to wind up with an annual net expense ratio of 0.98%. That's slightly more than the Invesco PowerShares MENA Frontier Countries Portfolio (NasdaqGM: PMNA). It's based on the NASDAQ OMX Middle East North Africa Index and charges 0.95%.

Both PMNA and the WisdomTree Middle East Dividend Fund (NasdaqGM: GULF) launched earlier this month. (See related article here.) The PowerShares fund, which was the first Middle East-centric ETF to launch, on July 9, has attracted nearly $20 million since then. WisdomTree's GULF, which came out on July 16, has slightly less than $5 million in assets.

Segment Your Portfolio

Besides offering different cost structures and sector weightings to the region, MES also provides investors a way to segment their Middle Eastern portfolios more. Both GULF and PMNA include the same countries, but in much smaller doses.

So why play such developing markets, which can be incredibly volatile, with such a focused theme?

"The other indexes for the other ETFs include North Africa—Morocco and Egypt. The Dow Jones index we use doesn't include either of those countries," said Van Eck's Hirsch.

The reason why this ETF is targeting GCC countries, he added, is to provide the most direct exposure for U.S. investors to markets reaping the most benefits from rising demand for oil. "It's not just the demand for oil, but the influx of petro dollars into GCC countries," Hirsch said.