Best investment funds in the UAE 2023
Mutual funds are a great financial tool for developing wealth in the UAE. This article will provide you with the most popular and best investment funds in the UAE.
The current economy of the United Arab Emirates enjoys a high percentage of per capita income along with a large trade surplus achieved annually. Thus, it is safe to say that the UAE market can offer great potential for investors who want to build their wealth and grow their money. Investment funds are among the best investment options available to investors in this country, especially for people who wish to invest passively. Mutual funds are an appropriate way to get exposure to the market for several reasons, including the huge internal diversification they offer and the benefit of the best expertise in the field of investment and money management.
Before moving on to get to know the best of these funds, let us first learn about one of the most important things that you must do before investing in anything, which is the investment plan.
Top 10 investment funds in the UAE
Scottish mortgage
The Scottish Mortgage is an investment fund, which is a special type of mutual fund available in the UAE because it is traded just like a regular stock. It is listed on the FTSE 100 and you can easily trade it via any of the share trading sites, which offer UK share trading opportunities.
This fund is a growth investment fund that is suitable for long-term positions. It houses some of the leading technology companies such as Facebook, Amazon and Alibaba. Which makes it one of the best actively managed investment funds in the UAE.
Dunn Capital Fund
It is a global mutual fund founded in 1974 by William Dunn, who pioneered rule-based and data-based investment decisions and avoided any emotional and subjective involvement in it.
Dunn Capital aims to make money regardless of whether the market is going up or down. For example, this investment fund grew an impressive 15% in 2008 during the height of the global financial crisis, when markets were down about 40%.
Fundsmith stock fund
Fundsmith, managed by the famous Terry Smith, is the best qualified global investment fund to invest in in the UAE. This fund invests in a very small amount of high quality, globally growing, flexible companies, which trade at an attractive value and can be held for a long time. Major holdings of this fund include companies such as Amadeus IT, Novo-Nordick, Dr. Pepper Snapple and PayPal.
Fidelity Global Dividend Fund
Those people who want to make an income are advised to go for the Fidelity Global Dividend Fund as one of the best organizations focused mutual funds, which pays exclusive dividends while also having the potential for share price growth. This fund targets global equities with healthy dividend flows and strong balance sheets, which are trading at good valuations.
The best holdings of this fund include Royal Dutch Shell, Procter and Gamble, Taiwan Semiconductor Manufacturing, and Johnson and Johnson.
Ardevora Global Equity Funds
This fund is based in Ireland with several short and long positions in individual institutions and huge market sentiment. For stock picking, this company uses a bottom-up approach, looking for those instances where market sentiment remains out of sync with underlying fundamentals such as valuations and share prices.
This fund as one of the best investment funds in the UAE invests heavily in the United States. Then in Japan, Europe and other parts of the world.
Fidelity Emerging Markets Fund
This fund invests in rapidly growing countries in Asia, Africa, Latin America, Indian Subcontinent, Middle East and Eastern Europe. It is able to form a good core portfolio. This fund aims to access high quality growth stocks and avoid those with poor corporate governance.
It also has priorities on stocks that have high returns on equity, which can fund growth with the help of free cash flow. This prudent approach has historically made this fund one of the best investment funds in the UAE and all over the world due to the low risks involved.
Schroeder Fund Mid Cap US
Actively managed fund managers usually find it hard to beat the US market, especially as tech giants such as Facebook and Amazon lead it. This fund avoids these giant companies to find value in medium-sized institutions, which are mispriced by the stock market or look ready to turn around.
The managers of this fund are highly experienced with this approach and are aware of the rate that is being paid to the companies. Mid-strength businesses can be a fun way to make money with the amount of interest others have in the huge US stocks.
Invesco Perpetual Asian Fund
Invesco Perpetual, the fund manager, has a long history of healthy earnings in Australia and Asia with a consistent track record of outperformance. Another director, Will Lamm, is experienced in broader and more detailed macroeconomic analysis of a company to find the most compelling opportunities.
As a result, they have an impressive portfolio of 50-70 stocks, which Mr. Lam believes will outperform the market. The flexible and hands-on approach of this fund is able to respond to changes in changing and volatile market conditions.
Crux European Special Case Fund
Crux European Special Situations Fund is managed by veteran Richard Pease with 3 decades of experience, whose approach focuses on companies with exceptional management as well as high market standing.
This manager takes a high conviction approach and finds more opportunities in SMEs. Although this can be more volatile compared to the volatility endured by competitors, it always proves that talented stock pickers can add significant value.
M&G Global Macro Bond Fund
Investors who want to offset their riskier stock holdings with exposure to the bond market should consider this fund. This fund invests in a wide range of fixed income assets including corporate and government bonds in both emerging and developed countries. Jim Leevis, the fund’s manager, has the autonomy to choose which global assets he believes have the potential to benefit from current economic conditions and market trends.
How do I create an investment plan?
Lack of an investment plan is the first problem that many people who want to invest money in the Emirates may face. As the saying goes, “He who fails to plan plans to fail.”
Before you begin your investments, you should be sure to create an easily implementable investment plan to guide your wealth-making decisions. Whichever best investment fund in the UAE you choose, your investment must start with a plan.
The number one reason why some investors lose all their money in the market may be the lack of a comprehensive investment plan to guide them. Some of them may start investing just because everyone else is doing it, which is wrong.
In order for us to help you now to create your investment plan to invest in investment funds in the UAE, follow the following four basic steps:
First, understand your current situation
Start by understanding your current situation, because the investment goals and options of a 25-year-old just entering the job market will be different than those of a 55-year-old with 10 more years to retire.
Regardless of age, consider all of your current investments, which could include land, rental property, or owning some stock in a company. Then create an outline of your current assets. Also try to make a list of all your debts. If you owe money on a mortgage, business loan, or car loan, list it as well.
Second, set clear investment goals
This mainly relates to why you want to invest. For some people, they may want to gain financial independence so that they can retire when they want to. Others want to grow their fortunes so that they can leave an inheritance to their children. Others may invest so that they can finally start their dream business. At this point, you must also decide what your investment goals are.
Once you’ve identified the reasons behind your investment, turn those reasons into smart, clear goals. A SMART goal can be defined as a goal that is specific, measurable, achievable, relevant, and time-bound.
I want to make AED 10,000,000 in the next 25 years is a smart goal. I want to retire with 15,000,000 dirhams and leave 10,000,000 dirhams for my children is another smart goal.
Third, create an investment budget and specify the amount you would like to invest
Now that you have identified your investment goals, you should move on to the next step in order to achieve them, and that means creating a budget. Despite the importance of this step in the investment process, some people may jump directly to the search for how to invest money in the United Arab Emirates without going through this crucial step.
To create your budget, financial planners often recommend the budgeting practice known as the 50:30:20 rule, where you allocate 50% of your income to essentials, 30% to discretionary spending, and saving or investing the remaining 20%.
You can choose the budget formula that works best for you. However, you need to understand that the best way to achieve your investment goals is to allocate a fixed percentage of your money every month only to investments. Doing so will help you build a habit of spending less than you earn and will also be able to enjoy the benefit of compounding. Keep in mind that investing 5,000 dirhams per month is more than investing 60,000 dirhams at the end of the year.
Fourth, get an emergency fund
Before thinking of putting your money into one of the best investment funds in the UAE, you should learn how to get an emergency fund first.
An emergency fund is money that you can set aside for unplanned and unexpected expenses resulting from job loss, medical crises, natural disasters, unexpected repairs, etc.
If you start investing without having an emergency fund, you may end up liquidating your investment when you encounter an emergency or unexpected situation.
For an emergency fund, the primary factor that makes it serious is accessibility (liquidity) rather than profitability. Put your emergency funds where you can access them when (and only when) you have an emergency.
Now that you know how to create an investment plan, let’s move on to learn about the best investment funds in the Emirates that you can benefit from its many advantages.
These were some of the best investment funds in the UAE that you can consider to grow your money and benefit from great investment experiences and high management competencies, especially if you want to earn returns on your money with less risk and without effort.
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