UAE investors are choosing investment portfolios that align with their risk levels: Study

Pedro Gonçalves
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UAE investors are choosing investment portfolios that align with their risk levels: Study

UAE based investors are increasingly aware of the importance of their investment portfolios aligning with their risk comfort level according to research from Old Mutual International and Quilter Cheviot Investment Management.

81% of respondents said this is the most significant factor they look for when looking to invest their finances with a Discretionary Fund Manager (DFM), up from 73% in 2017.

Other important attributes that UAE investors look for in DFMs are that tight controls are in place to protect them against investment losses (65% versus 58% in 2017); while over half (54%) of respondents said they are looking for trusted and established brands that have a proven performance track record in delivering growth, compared to 47% last year.

Issues such as stagnation in the world economy and political challenges across the globe are clearly playing on the minds of investors, but this risk can be alleviated by investing with a DFM"

Mark Leale, head of Quilter Cheviot Investment Management's Dubai representative office, said: "Issues such as stagnation in the world economy and political challenges across the globe are clearly playing on the minds of investors, but this risk can be alleviated by investing with a DFM. By actively managing investments and investing in a range of diverse asset classes, our investment managers are able to respond to market changes and minimise risk. They are in regular contact with clients to ensure that their portfolio aligns with their risk comfort level, and only make decisions with a long-term view in mind."

The survey also showed that UAE investors place significance on DFMs that can create tailored portfolios to meet their investment requirements (44%), and also DFMs that have access to industry leading global investment research (39%).

Greater numbers of investors are also more averse to risk than previously. Nearly a quarter of respondents (22%) said they are risk averse, compared to 15% in 2017; while 44% now consider themselves risk neutral, down from over half (53%) of respondents in 2017. This sense of investor unease is further reflected in an increase in those checking investments monthly or quarterly (75% vs 68% in 2017).

Paul Evans, head of Region, Middle East & Africa, Old Mutual International, added: "Managing risk is a key part of the investment process. Controlling volatility, and managing the downside, is all part of risk management and it is therefore crucial that the portfolio is correctly matched to the risk profile of the investor and that this is reviewed on an ongoing basis."

The study targeted investors living in the UAE (mainly Dubai and Abu Dhabi) who use the services of a professional to invest in the stock market, with at lest of $50,000 invested.