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Written by Money Mata - aka - Damodhar Mata
on July 28, 2016

You can invest your savings in International Mutual Funds in UAE; to achieve your financial goals.

They help you mitigate risks like inflation and currency depreciation.

A robust portfolio of International Mutual Funds and a proper asset allocation help in reducing market risks to a large extent.

You can invest in Mutual funds in US Dollar denomination directly through banks and fund houses, but the costs involved can be high.

There is an initial charge of 3% - 6% and a brokerage charge, every time you buy and sell funds to balance your portfolio.

Large institutions like Generali, MetLifeZurich, Oman Insurance, Friends Provident and Salama who fall under the institutional investor category, have access to a particular class of funds at a huge discount.

They offer short to long-term saving plans, through which you can invest in International Mutual Funds at a fraction of the costs you will incur if invested directly.

The mutual funds are the most important factor in a savings plan, and a wide range of good funds is key to the growth of your savings invested in such programs.

Empty Freight Train

A plan by itself is like an empty freight train, and the funds are like the goods that can be loaded on the freight train.

When goods like gold, machinery and other valuable goods are transported on the freight train, higher freight charge is received, when goods like cement, steel or other lower value goods are transported, then the freight charge received is less.

Likewise, when quality funds with good earning potential are selected, they earn good returns.

The Investor should spend more time with his financial advisor in choosing an ideal portfolio, based on his goals, timeline and risk appetite.

Savings Plan UAE

The following are the broad classification of funds, also known as asset classes, available on international offshore plans in UAE;

Asset Class

Geography

Industry 

Yield and Risk

Equity

Global

Information Technology

Government Bonds

Bonds

Regional

Pharmaceuticals 

US Treasuries

Property

Single Country

Bio technology / Medical

Corporate Bonds

Money Market

 

Healthcare

High Yeld

Commodity

 

Industrials 

 

Hedge

 

Financials

 

Mixed Assets

 

Consumer Discretionary

 

Specialist / Thematic

 

Consumer Staples

 
   

Utility

 

 

Mutual Funds Fact Sheet

The fund facts sheet of each fund can be downloaded from third party websites like Turstnetoffhore.com or Morningstar.com.

This fact sheet provides a lot of information about the funds and careful analysis of the factsheet is essential before choosing a fund.

The following picture shows the vital information captured on a Fact Sheet.

Investment Funds in UAE

Picture Source : https://www.barclaysstockbrokers.co.uk/investments/Funds/Pages/funds-factsheets.aspx.

Risk and Reward 

The return on investment on such funds largely depends on the amount of risk an investor is willing to take over a given period.

It is a well-known fact that funds with lower risk offer lower returns and funds which expose an investor to a higher risk offer greater rewards.

Having said that, an investor can build a robust portfolio of investment funds, by diversifying in multiple asset classes, geographies and industries.

Investment Horizon

What is Investment Horizon?

Mutual Funds in UAE

Investment horizon is the total length of time that an investor is willing to hold a particular investment before cashing to our for his specific needs. It depends on his needs and goals like retirement, children's education, proper investment, etc...

The amount of risk an investor is willing to take largely depends on the investment horizon. For e.g. if a 25-year-old investor is planning to save for his retirement, then he can choose a high-risk portfolio.

But if he is looking to save for his marriage in the next 2 - 3 years, his risk appetite would be relatively low.

Ascertaining the investment horizon is one of the most important steps while creating an investment portfolio.

The following chart showing the growth of $10,000 in 10 years if invested in the S&P Index, confirming that the markets offer higher returns in the long run.

Screenshot 2018-03-04 16.25.36.png

Links

The following are the links lead to the list of funds under each platform.

Zurich Vista Funds -

Generali Vision Funds- 

FPI Funds - 

Summary

International Mutual Funds can help an investor achieve his financial goals while mitigating risks like inflation and currency depreciation when put together in a robust portfolio.

A robust portfolio should incorporate the above-discussed aspects. Regular monitoring and rebalancing of the portfolio are necessary to ensure growth and protect the downside risks.

To know more about mutual funds in UAE and to help you build a robust portfolio, you can arrange a free initial meeting with me.

Let Us Know What You Thought about this Post.

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