UAE investors take a shorter term view, says Schroders

Added 29th June 2016

Investors in the United Arab Emirates have a shorter time horizon for investments than in other parts of the world and expect higher returns than the global average, according to a recent Schroders survey.

UAE investors take a shorter term view, says Schroders

The survey also revealed investors based in the UAE do not expect to live as long after their retirement. Their predictions are the lowest of all the countries surveyed.

Conducted by an independent research company on behalf of Schroders, the survey covered 20,000 investors in 28 countries between 30 March and 25 April.

It found that on average investors in the UAE hold their investments for 2.8 years, compared with 3.2 years for the global average. More than a third (36%) have a very short-term view, investing for up to a year.

High expectations

These investors like a relatively high average investment income of 11.3%, compared with 9.1% globally. Fewer than three in 10 (28%) would be happy with a return of less than 10%.

UAE investors are driven primarily by wealth creation and income generation. More than half aim to reinvest income and grow their portfolios (51%). Around two-fifths invest to supplement income (41%), provide income for relatives (39%) or supplement their pension (38%).

"UAE investors have very high income expectations and a short-term investment horizon."

“The survey shows investing plays a bigger role in pension savings for UAE investors. The main reason they invest is to reinvest and grow their portfolio, which reflects a good appetite to meet financial goals in the region,” said Schroders’ William Wells, director – Middle East.

Disappointment likely

“However, the 2016 study found UAE investors have very high income expectations and a short-term investment horizon. “This could lead to some investors being disappointed and it is important not to sacrifice longer-term goals, particularly retirement savings,” he said.

Reasons driving the choice of products in the UAE are mixed but tally with global averages. UAE investors are keen to get back at least the amount invested at the end of the term, they seek long-term potential growth and are keen to get a return higher than inflation.

They also seek out investments with a good track record, where the reputation of the company or manager is good and they prefer to invest in an industry or country with which they are familiar.

Respondents predicted they would live for fewer than 20 years (17.7) after retiring, compared with the global average of 21.2 years.

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Richard Hubbard

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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