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 ...read more
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.
The following are the best 5 mutual funds for SIP for short-term holdings -
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.
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.
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.
Three-Bucket Investment ApproachThe 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. |
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 -
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.
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The following are the best 5 mutual funds for SIP for long-term holdings -
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.
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:
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 -
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.
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.
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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 -
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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. |