10 Best Mutual Funds to Invest in UAE, 2024

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In recent years, mutual funds have surged in popularity in the UAE. They have emerged as one of the top investment choices for those looking to diversify their portfolios and secure their financial futures. These investment instruments are particularly well-suited for you if you want to balance risk and enjoy the benefits of a professionally managed fund.  With a variety of mutual funds in UAE to meet different investment goals and risk tolerances, you, as an investor, are spoilt for choice!  We will highlight options registered in European countries such as Luxembourg, Ireland, Germany, France, and the UK.

 

Best Performing Mutual Funds in UAE

 

Available in major currencies like US dollars, euros, and sterling, the top mutual funds offer a spectrum of opportunities if you want to invest in the region's vibrant market.

Here is a list of the best mutual funds in UAE —

 

1. Shelton NASDAQ-100 Index Direct (NASDX)

 

The Shelton NASDAQ-100 Index Direct (NASDX) is a mutual fund that is designed to replicate the performance of the largest non-financial companies listed on the NASDAQ stock exchange. This is one of the best mutual funds in UAE if you want exposure to major technology and non-financial companies without picking individual stocks. It provides a convenient way to invest in a broad section of the tech-heavy NASDAQ-100 index. 

 

Here are some features of this mutual fund in UAE -

  • Your portfolio is designed from approximately 100 equities that are part of the NASDAQ-100 index and works on imitating the index’s performance.
  • To keep up with the performance, the portfolio maintains the same sector weightage as the index. 
  • It replicates the performance of the top non-financial companies in the NASDAQ exchange.
  • You gain access to a high-performing index fund at an affordable price. 
  • Most investments made here are in tech giants. 

 

2. Voya Russell Large Cap Growth Index Fund (IRLNX)

 

The Voya Russell Large Cap Growth Index Fund (IRLNX) is set to match the performance of the Russell Top 200 Growth Index. Primarily investing in large-cap U.S. equities with high growth potential, this fund is designed for those looking to capitalise on large-cap growth stocks. 

 

The key features of this mutual fund in UAE are as follows —

  • Investments are in stocks of large-cap companies and focus on long-term growth potential. 
  • The fund aims to identify companies that have experienced cash flow growth, return on investment, sustainable competitive benefits, and the potential to manage profitable growth. 
  • At least 80% of the net assets in equity funds are included in the index at the time of investment. 

 

The fund has experienced varied performance, with a notable year-to-date return of 9.04% and a five-year average return of 19.72%. In 2023, it achieved its best one-year total return of 45.99%. However, it also faced challenges in 2022, evident in its – 30.03% return.

 

Investment Plan

 

3. Fidelity NASDAQ Composite Index (FNCMX)

 

The Fidelity NASDAQ Composite Index Fund (FNCMX) tracks the NASDAQ Composite Index. This is among the best mutual funds in UAE if you want to invest in tech and non-financial sectors.Detailed below are the features of this mutual fund —

  • At least 80% of the investment is in common assets included in the index. It can be operated as a non-diversified fund. 
  • It aims to provide ROI that is similar to the price and yield performance of the NASDAQ Composite Index. 
  • The fund manager creates the portfolio after considering several factors into account — capitalisation, dividend yield, price-to-book ratio, growth of earnings, industry exposure, price-to-earnings ratio, and more. 

 

It has shown a year-to-date return of 6.35% and a five-year average return of 17.24%. The fund experienced significant growth in 2023 with a best annual return of 45.13% — this happened despite a challenging 2022, where it faced a -32.39% return.  On the whole, this performance reflects the tech market's volatility and growth potential.

 

4. Voya Russell Large Cap Index Port I (ILRX)

 

The Voya Russell Large Cap Index Portfolio Class I (IRLX) mirrors the performance of the Russell Top 200 Index, focusing on large-cap U.S. equities. It aims to offer investment results that correspond closely with the total return of the index. Some major features of this mutual fund in Dubai are stated below —

  • At least 80% of the investments are in equity securities of the companies listed on the index at the time of investment, convertible securities that can be converted into stocks that are part of the index, and other derivatives whose return is similar to the returns of the investment or its components. 
  • The portfolio under this mutual fund in UAE has a reasonable cost advantage over competitors and can be bought at an affordable rate. 

 

As of the end of February 2024, the fund has seen a significant one-year change, indicating a positive performance within the said time frame.

 

5. Fidelity 500 Index Fund (FXAIX)

 

The Fidelity 500 Index Fund (FXAIX) tracks the S&P 500 and focuses on large-cap U.S. equities. Recently, it reported a 6.53% year-to-date return and a five-year average return of 14.63%. 

Here are the key features of this mutual fund in UAE —

  • Provides results that correspond to the total return as per the performance of the common stocks traded publicly. 
  • At least 80% of the investment is invested in common equities that are part of the S&P 500 index. 
  • This is a large-blend portfolio that has investments across a variety of industries as per their exposure. 

 

In 2023, the fund notably achieved a 26.29% return, recovering from a challenging 2022 where it saw an -18.13% return. 

 

6. Fidelity Global Dividend Fund

 

One of the best mutual funds in the UAE, Fidelity Global Dividend Fund uses a bottom-up approach to find and target the best dividend-paying companies around the globe. 

The focus of this fund is on harnessing the income and long-term capital growth potential. 

Discussed below are the key features of this fund —

  • The major investment is made in equity funds.
  • The investment is focused on companies that outperform even difficult market scenarios. 
  • At least 70 to 75% of funds get invested in equities of global companies including the ones in emerging markets. 
  • At least 50% of the fund investment is in securities with positive ESG (environmental, social, and governance) characteristics. 
  • The funds are relatively low volatile. 
  • You get the flexibility to invest in a wide range of assets for a better risk-return profile. 

 

7. Fundsmith Equity Funds

 

Next on the list of best mutual funds in the UAE is Fundsmith Equity Funds. Here, your funds are invested in global equities. The approach of this mutual fund is to make you a long-term investor in its selected stocks. 

The investment manager for this mutual fund needs to adhere to stringent investment criteria to create your portfolio. As per the criteria, the investments must be in —

  • High-performing businesses that can sustain high ROI
  • Businesses that don’t require high-end leverages to generate returns
  • Businesses that have growth potential upon reinvesting their cash flows at high rate of return
  • Businesses that are resilient to change especially technological innovation
  • Bunsinesses with promising valuation as per the fund 

Note that this mutual fund does not invest in derivatives and is not confined to any exposure arising from within operations of a business the money is invested in.

 

Investment Plan

 

8. Fidelity Emerging Market Funds

 

In this mutual fund in UAE, the money is invested in the emerging markets of Latin America, Eastern Europe, South East Asia, Africa, and the Middle East. This mutual fund aims to achieve capital appreciation over time. 

The money is usually invested in companies with strong market positioning and competitive advantage. The fund also prefers companies that offer superior returns on their assets and have capitalised balance sheets. 

Listed below are the key features of this mutual fund —

 

  • The fund manager invests 70 to 75% of the funds in equities of companies that are experiencing rapid economic growth in emerging markets. 
  • At least 50% of the funds are invested in asset securities that meet ESG characteristics. 
  • The fund manager seeks to create a balanced risk portfolio. The manager considers the company’s financial condition and industry position to make investments. 

 

9. 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, among the top mutual funds in UAE, avoids such behemoths and finds value in medium-sized organisations that get mispriced by the stock market or look ready for a turnaround.

The following are the key features of this mutual fund —

  • The fund manager uses a bottom-up and research-based approach for investment. 
  • They identify the companies with convincing business models, solid management teams, and high valuation levels. 
  • The aim is to achieve capital growth. 
  • About 80% of the investment is in equity and equity-related securities of medium-sized US companies. 

 

10. Invesco Perpetual Asian

The Invesco Perpetual Asian Fund aims for long-term growth by investing in Asian and Australasian companies, excluding Japan. It primarily targets the technology and financial services sectors, with significant investments in top companies like Taiwan Semiconductor and Samsung Electronics. 

The features of this mutual fund in Dubai include —

  • At least 80% of the investment is in stocks and other equity-based securities of the companies that have been founded, domiciled or majorly operating in Asia or Australasia. 
  • The fund manager also invests some portion in transferable securities, money-market instruments, deposits, collective investment schemes, and cash.
  • The aim of the fund is to achieve long-term capital appreciation. 

 

Final Say

 

This article provided you with a list of the top 10 mutual funds to consider for investment in 2024. Nevertheless, it's crucial to conduct your own research and consult an investment advisor before making any investment decisions. Remember, the performance of mutual funds can vary based on market conditions — it's important to invest according to your risk tolerance and knowledge level. Always make informed choices when it comes to your investments.

 

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