UAE passion for crypto and gold sparks diversification call

UAE residents are showing as much appetite for speculative bets on cryptocurrencies, particularly amongst younger investors (18-24) as they are for funds that buy shares in companies, according to a new survey from International Financial Group Ltd (IFGL).

In its poll conducted in late 2023 with over 1,000 UAE residents, IFGL found that one in ten view cryptocurrencies as the best way to generate inflation-beating returns, with the greatest interest coming from Emiratis; equal to those who choose mutual funds and just ahead of those who choose exchange-traded funds (9%). Gold, preferred by Emiratis and Asians, and UAE property jointly topped the ranking, both at 24%.

Male respondents prioritise UAE property, gold, and fixed-rate deposits, while females favour gold, UAE property, national bonds, and fixed-rate deposits. Cryptocurrencies are more appealing to males (12%) than females (6%). Age influences investment preferences, with those aged 18-24 years preferring Crypto, 35-44 year olds preferring home country property and 25-34 year olds opting for UAE property.

Individuals aged 45 and above show less interest in cryptocurrencies and ETFs, with IPOs least favoured overall. Higher incomes lead to a preference for equities/mutual funds

Simon Barwell, IFGL’s marketing director said: “Some UAE investors are clearly pursuing risky strategies whereas they should be building a diverse portfolio of assets with different risk and return profiles.

“Cryptocurrencies have a history of volatility while property is an illiquid investment, so UAE investors should be thinking about equities and bonds too, both locally and overseas. A balanced strategy is the key to long-term wealth accumulation.”

Mutual funds and exchange-traded funds (ETFs) can be excellent tools for diversifying your portfolio. Most mutual funds and ETFs are invested along the lines of a specific asset class, whether stocks, bonds or cash. Some funds are a mix of different asset classes; these balanced funds generally invest specified portions of the fund in stocks and in bonds.

Having served clients in the Middle East through locally regulated intermediaries for many years, in October 2023 IFGL opened a new office in the Dubai International Financial Centre.

The new office is led by senior executive officer Stuart Shilcock, who has been based in Dubai for over 15 years.


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