Smartest investment and life plans in UAE

Top 10 Best mutual funds in UAE to invest in 2021

By Saad Bin Shoket
  | Published: 28 April 2021

Invest smart today for a better tomorrow

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Smartest investment and life plans in UAE

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It is amazing to see how far the UAE has come in the duration of some decades. The region of impoverished deserts has now become one of the most diversified and the largest economies in the gulf area.

The economy of UAE is enjoying a high amount of per capita income along with a considerable trade surplus annually. Hence, it is safe to say that the UAE market has great potential for investors. There are plenty of available investment opportunities for receiving high returns.

If you talk about investment instruments, mutual funds in UAE sound like a good option to many investors. For the people who wish to invest passively, mutual funds are a suitable option. It is a convenient way of taking exposure within the market, which provides built-in diversification along with stress-free mechanism. Basically, you invest your funds in a tool, which is an investment pool managed by a professional fund manager.

There are various mutual fund investments for serving the different requirements of the investors. After you invest in mutual funds, you don’t need to stress about the regular movement in the market. Your fund manager will take care of that on your behalf.

In this article, we have listed some of the best mutual funds for you. A lot of these funds are registered in the countries of Europe such as Luxembourg, Ireland, Germany, and France, and also the UK. They are usually available in US dollars, euros, and sterling.

The best way of buying them is via an online advisory website or stock broker in your country or through an offshore platform. This is generally more economical than buying directly from a fund manager because the best portals discount the charges on initial funds or altogether drop them, saving you from an upfront charge of around 3-5%. Some of them even provide a rebate on annual management fees of the fund.

However, you must remember that even the best fund managers are simply human, and hence fallible. The performance in the past does not guarantee success in the future and with the stock market changing frequently, you must beware of the corrections.

Top Mutual Funds in the UAE

Here is a list of the most popular best mutual funds available in the UAE.

1. Scottish Mortgage

This is an investment trust, which is a special kind of mutual fund where the shares get traded just like the ordinary stocks. It is listed on the FTSE 100. You can easily trade it through any of the share-dealing websites, which provide UK equities. This trust invests in the global portfolios of companies.

The portfolio remains high conviction and involves a growth tilt and long-term positions when it comes to technology winners like Facebook, Amazon, and Alibaba. It is amongst the most economical mutual funds that are managed actively.

2. Dunn Capital

It is a global mutual fund that was founded by William Dunn in 1974 who was the pioneer when it came to making an investment decision that is rules-based entirely on data by eliminating all emotion and subjectivity.

Dunn Capital aims of making money no matter the market is going up or down. For instance, it grew around 15% impressively in 2008 during the height of the global financial crisis, when the markets were down by around 40%.

3. Fundsmith Equity Fund

Run by the famous Terry Smith, Fundsmith is an eligible global fund to invest in. This fund invests in a small amount of resilient, high quality, globally growing companies that trade at an attractive value and it plans to hold for a long time.

The top holdings involve Amadeus IT, Novo-Nordick, Dr. Pepper Snapple, and Paypal. In the US, it has a large weighting that makes up almost the two-third of the portfolio, along with UK-based companies and some European exposure.

4. Fidelity Global Dividend

Those people who wish to generate income are recommended to go for Fidelity Global Dividend that focuses on organizations, which pay exclusive dividend yields having the potential of growth of share price also. The fund targets global stocks having quality earning streams and strong balance sheets trading at good valuations.

The top holdings in this fund include Royal Dutch Shell, Procter and Gamble, Taiwan Semiconductor Manufacturing, and Johnson and Johnson.

5. Ardevora Global Equity Funds

This is an Irish-domiciled fund that takes both short and long term positions on individual organizations and huge market sentiment. For stock selection, this company uses a bottom-up approach, looking for those cases where the market sentiment remains out of line with the fundamentals that are underlying like valuations and stock prices.

This mutual fund is invested in majorly invested in the United States. The remaining is invested in Japan, Europe, and the other parts of the world.

6. Fidelity Emerging Market Fund

This fund invests in the countries that are growing fast in Asia, Africa, Latin America, the Indian sub-continent, the Middle East, and the Eastern Europe region. It is capable of forming a good core portfolio holding. This fund aims at high-quality growth stocks and avoids those having bad corporate governance.

It also has priorities on stocks that involve high returns on equity, which can fund the growth with the help of free cash flow. This prudent approach has made this fund historically one of the low-risk funds amongst a volatile peer group. 

7. Schroder Mid Cap US Fund

Usually, the managers of actively-managed funds find it difficult to beat the US market, especially because the S&P 500 is driven by tech-giants like Facebook and Amazon. This fund avoids such behemoths for finding value in the medium-sized organizations, which get mispriced by the stock market or look ready for a turnaround.

The managers involved are highly experienced and experienced in their approach and conscious regarding the rate they pay for the companies. The mid caps can turn out to be an interesting way for gaining exposure in the US with this amount of attention on huge US stocks.

8. Invesco Perpetual Asian

Invesco Perpetual, the fund manager for this mutual fund, comes with a strong pedigree in Australia and Asia with a consistent outperformance track record. The other manager Will Lam has expertise in detailed and wider macro-economic analysis of the company for finding the opportunities that are most compelling.

As a result, they have an amazing portfolio of 50-70 stocks, which Mr. Lam believes will be outperforming the market. The flexible and pragmatic approach is capable of responding to the changes in the market conditions.

9. Crux European Special Situations

This fund is managed by the veteran Richard Pease who comes with an experience of 3 decades and focuses on those companies having exceptional management as well as a top position in the market.

He follows the approach of high conviction and finds more opportunities in smaller and medium companies. Although this can turn out to be more volatile as compared to the competitors, he proves that talented stock selectors can add considerable value.

10. M&G Global Macro Bond

The investors who wish to offset stock market holdings having higher risk with bond market exposure must consider this fund. It invests in a wide range of assets with fixed-income including corporate and government bonds in both emerging as well as developed nations. Jim Leaviss, the manager has the independence of selecting any global assets that he thinks have the possibility of benefiting from the present economic conditions and market trends.

These are some of the best mutual funds that you can invest in UAE. Mutual funds can be the perfect investment tool for those who want to invest their funds to earn returns at a lower risk.