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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 also 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 relatively high.

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

International Insurance companies like Generali, MetLifeZurich, Oman Insurance, Friends Provident and Salama fall under the institutional investor category. They provide retail investors access to the Institutional class of funds on their respective savings plans for a fraction of the cost.

Depending on your investment horizon and financial goals, you can choose to invest over short medium or long terms through these plans. 

You can build a well-diversified portfolio of Mutual funds investing in various asset classes, geographies and sectors through these plans.

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 items are transported on the freight train, a 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.

As an Investor you should spend more time with your financial advisor in choosing an ideal portfolio, based on your goals, investment horizon 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 Yield
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, Morningstar.com or ft.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 you are willing to hold on to a particular investment before cashing out to pay for specific goals/needs, like retirement, children's education, proper investment, etc...

In other words it is the time between now and when your goals are due.

As we already know that the return on a certain investment is directly proportional to the risk we are willing to take. Higher the risk, higher the return and vice versa. To determine your risk appetite for a particular investment, it is necessary to ascertain the investment horizon.

Longer the horizon, the higher risk you can take and if your investment horizon is short you may want to invest in low risk or guaranteed investments.

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 you achieve your 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, arrange a free initial meeting with me 

Click Here to Arrange a Free Consultation

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