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UAE: Investment portfolios that align with risk levels highly prioritized

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

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.

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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, commented: “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.”

Mark added: “We have seen increasing demand for tailored portfolio services from investors who have high investment expectations, but also recognise the importance of having them managed in a secure way. Having access to research from our 22 strong in-house analyst team means our investment managers can invest in a diversified global portfolio for clients, helping to protect them against losses as well as achieving their investment goals.”