Top 5 SIP Plans for Investment in UAE

Investing in mutual funds through a Systematic Investment Plan (SIP) is a smart and disciplined approach to building wealth over time. In the UAE, choosing the best mutual funds for SIP can help you achieve your financial goals, whether you are saving for retirement, a child's education, or simply growing your wealth. ...read more

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What are Mutual Funds for SIP?

Mutual funds are essentially a portfolio of stocks, bonds, and other market-linked securities and are purchased using pooled capital of investors. These portfolios are managed by professional fund managers.  

You can invest in mutual funds either by paying a lump sum amount or via a Systematic Investment Plan (SIP). This is an investment mechanism that involves contributing a small fixed investment amount towards mutual funds at regular intervals, such as, monthly, weekly, or quarterly.

Best SIP Plans for Short-Term

The following are the best 5 mutual funds for SIP for short-term holdings -

1. Ardevora Global Equity Funds

The minimum holding for Ardevora Global Equity Funds is 5 years. This global equity fund uses a bottom-up approach. The majority of the mutual fund’s investments are done in the United States. The remaining funds are split between Europe, Japan, and other parts of the world. 

  • These good mutual funds for SIP are invested in and gain exposure from equity-related and equity securities that are listed or traded on the Regulated Market. 
  • The investment manager seeks to structuralise the portfolio in a manner that it has a long or short ratio of 150/50. 

2. M&G Global Macro Bond Fund

This is a ‘Go-anywhere’ bond fund that invests in any bonds issued by governments or companies worldwide and can be invested in any global currency. 

The investments are made after considering the macroeconomic conditions, creating a portfolio that is designed to capitalize on short-term tactical investments. 

This is a good fund for SIP and offers global bond exposure. It is a good choice if you want to balance risky stocks with safer investments. It invests in different fixed-income assets from both emerging and developed markets, including corporate and government bonds. 

3. Schroder US Mid Cap Fund

This is one of the best SIP plans and aims to provide capital growth and income through investment in the Russell 2500 Total Return Logged index. The investment tenure is at least 3 to 5 years into equity and equity-related securities of medium-sized US companies. 

  • At least 80% of the investment is done in equity and equity-related securities. 
  • The fund employs thorough company analysis that leads to selecting the best stock selection over time. 
  • This best SIP plan uses a 3-bucket approach and can hold well in difficult markets. 

Three-Bucket Investment Approach

The savings strategy uses three virtual buckets to manage your finances -

Bucket 1: Emergency and Short-Term Goals

This bucket is for immediate needs and short-term goals. It should contain liquid assets like cash or easily accessible investments. Aim to save 3-6 months of income here to cover emergencies. Once that’s set, you can use the funds for short-term goals like vacations or electronics.

Bucket 2: Financial Well-Being

This bucket focuses on medium-term goals like a down payment or paying off debt. It includes less liquid assets like stocks or bonds, with a time frame of 1-5 years. Allocate 10-30% of your savings here.

Bucket 3: Financial Independence

The long-term bucket is for goals like retirement or children’s education, with a time frame of 5+ years. Invest 50-70% of your savings here for future security.

4. Voya Russell Large-Cap Growth Index Fund

This is one of the best mutual funds for SIP, investing in the equities of large-sized companies in the United States within the Russell 1000 Growth Index. Approximately,  80% of the funds are invested in companies with opportunistic business momentum, valuations with growth potential, and market recognition. 

The Voya Russell Large-Cap Growth Index Fund offers the following -

  • Focus on consistency
  • Round-the-clock investment and wealth management

5. Amundi Funds Emerging Markets Equity Funds

This is another best SIP for the short term. With a minimum investment tenure requirement of 5 years, this fund invests assets in emerging markets. The focus is on quality, high cash flow generation, positive incremental return on invested capital, and top-notch corporate governance.

7 Best Short term Investment Options with High Returns in the UAE

Investment Plan

Best SIP Plans for Long-Term

The following are the best 5 mutual funds for SIP for long-term holdings -

1. Scottish Mortgage Investment Trust 

This is the best mutual fund for SIP that actively invests in equities and helps to earn high returns on investment in the long term. The investment is usually in equities. 

  • Portfolio composition: Typically holds between 50 and 100 stocks and can be fairly concentrated. 
  • Investment Scope: No strict limits on geographic, industry, or sector investments. 
  • Asset Allocation: Primarily invests in liquid, publicly traded stocks, but it may also include fixed-income securities, convertible securities, funds, and other assets. 
  • Private Investments:  Cap of 30% of the total assets can be invested in non-publicly traded companies.
  • Performance Goals: The goal is to achieve returns greater than the FTSE All-World Index (in sterling) over a rolling five-year period or longer. 

2. Fundsmith Equity Fund

This is the best SIP for AED 1,000 per month especially for long-term investors. The Fundsmith Equity Fund invests globally in stocks with a long-term and avoids short-term trading. 

Key Investment Criteria: 

  • High-quality businesses with strong returns on capital
  • Companies with hard-to-replicate advantages
  • Firms that don’t rely heavily on debt for returns
  • Businesses with reliable growth from reinvested cash flows
  • Companies resilient to change and technological advancements
  • Stocks that the fund considers attractively priced

3. Fidelity Emerging Market Funds

This is one of the best mutual funds for SIP and focusing on capital appreciation. Fidelity Emerging Market Funds usually invest the money in securities like the MCSI Emerging Markets Index and depository receipts that represent the securities included in the index. 

The investment takes the following factors into account -

  • Industry exposures
  • Dividend yield
  • Price/book ratio 
  • Price/earnings ratio
  • Earnings growth
  • Capitalisation 
  • Effect of the foreign taxes
  • Country weightings 

4. Invesco Perpetual Asian Fund

This is another long-term SIP of AED 20,000 per month in the UAE focusing on capital growth. The Invesco Perpetual Asian Fund invests at least 80% of the funds in shares or equity-related securities of companies established or primarily located in Asia and Australasia (excluding Japan). 

The fund manager can also invest in other transferable securities (including non-Asian or non-Australasian companies), collective investment schemes, deposits, money-market instruments, and cash.

5. Fidelity Global Dividend Fund

This is a major global fund and one of the best SIPs for AED 1,000 per month. Fidelity Global Dividend Fund promotes capital appreciation over the long tenure and helps in earning. 

  • This best mutual fund for SIP invests at least 70% of its funds in equities from companies from anywhere in the world including the emerging markets. 
  • This fund allocates at least 50% of the assets in securities of companies with characteristics of environmental, social, and governance. 
  • The funds can also be invested in money market instruments.
  • This mutual fund emphasises high-quality global companies that can maintain and grow their dividends with time. 
  • The equities in which the money is invested offers a promising opportunity to generate income and provide broad exposure to industries and companies. 
Top 10 Best mutual funds in UAE to invest in 2024

Who Should Invest in SIP?

Systematic Investment Plans (SIPs) are a great option for various types of investors due to their flexibility, convenience, and potential for long-term wealth growth. Here's who should consider the best SIP Plans -

  • People who want to enter the stock market in an organised way
  • Individuals who wish to build a habit of regular saving and investing
  • Investors looking for a balanced and diversified stock portfolio
  • Individuals who prefer a lower-risk investment approach
  • Those planning for long-term equity growth
  • Beginners with little market knowledge
  • People who value flexibility in their investments
  • Individuals with long-term goals like travel, home ownership, or education
  • Investors who are interested in benefiting from compounding and cost averaging 
  • Those who prefer not to invest a lump sum at once
What are the Different Investment Options for Expats in UAE?

How to Select the Best SIP Plans in the UAE?

Choosing the right SIP (Systematic Investment Plan) of AED 20,000 per month in the UAE involves several steps to match your financial goals, risk tolerance, and preferences. Here are some tips to help you - 

Set Your Financial Goals Decide what you want to achieve - wealth accumulation, retirement, education funding, etc. Determine how much you can invest regularly and establish your investment timeframe.
Assess Your Risk Tolerance Consider your risk tolerance based on age, income, and financial responsibilities. If you can handle higher risks, equity SIPs might be suitable. For lower risk, consider debt-oriented SIPs.
Which SIP to Invest in Understand different SIP types like equity, debt, balanced, or sector-specific funds. Choose funds that fit your risk level and goals.
Check Fund Performance Look at past performance, consistency, and volatility, but remember that past results don't guarantee future returns.
Diversify Choose SIPs that diversify investments across asset classes, sectors, and regions to reduce risk.
Read Scheme Documents Carefully review the scheme’s objectives, strategy, and risks by reading the offer documents.
Get Professional Advice If you're unsure, consult financial experts like Dhanguard for personalized recommendations.

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