With its strategic location and business-friendly policies, the UAE has attracted investors from all over the world. When it comes to the best investment options in the UAE, there are several worth considering based on your risk appetite and investment goals. An optimal investment portfolio for investors in the UAE should be well-diversified across multiple assets. This provides stability against volatility and maximizes long term returns.
Real estate continues to be a top investment choice in UAE
The UAE, especially Dubai, is known for its spectacular high-rises and luxurious properties. With its growing population and businesses, demand for residential and commercial real estate remains strong. Though prices have moderated recently, real estate values generally hold well and rental yields are attractive compared to other global cities. Investors can consider completed or off-plan properties, REITs as well as real estate funds.
Equity funds provide exposure to UAE’s stock markets and economic growth
The UAE stock markets have delivered decent returns over the past decade. Investors can gain exposure by investing in mutual funds focused on UAE equities. The funds provide professional management and portfolio diversification. With the UAE pushing ahead with economic initiatives under Vision 2021 and preparing for World Expo 2020, the stock markets offer long term growth potential.
Fixed income offers stability and regular income
For investors who prioritize capital preservation and regular income, bonds issued by the federal government, GREs and local corporations are worthwhile options. Sukuks also provide fixed Shariah-compliant returns. The central bank’s proactive measures and stronger oil prices bode well for stability of bond issuers in the country.
Precious metals act as hedges in times of uncertainty
Gold and silver have historically performed well during times of economic crises and uncertainty. While the UAE dirham is pegged to the US dollar, precious metals provide portfolio diversification benefits as their prices often move in opposite direction of mainstream assets.
Look beyond UAE for optimal asset allocation
While UAE offers stable political climate and pro-business environment, geographic diversification is key to managing risks. Investors should allocate a suitable portion of their portfolio to assets in other markets such as US, Europe and Asia based on goals and risk tolerance. This ensures stability during local downturns while participating in global upturns.
In conclusion, UAE investors should aim to build a resilient portfolio across equities, bonds, precious metals and international assets. This diversified approach helps achieve long term returns while minimizing risk.