Monday 23, October 2017 by Jessica Combes

UAE investors expect a return of 7.7 per cent in 2017


A second tranche of investment research from Old Mutual International and Quilter Cheviot shows investors in the UAE hope to achieve 7.7 per cent return in 2017.

This shows expectations remain optimistic in the region despite two-thirds of investors claiming to have lowered their expectations over the last 12 months.

A high proportion of investors are expecting strong returns in 2017 with 29 per cent of investors in the region expecting investment returns over 10 per cent. This seems even more optimistic based on the actual returns investors said they received in 2016, which averaged 5.1 per cent.

Investors are now feeling less concerned about oil prices. Last year 55 per cent of investors were concerned over low oil prices, this year 38 per cent of people are concerned about low oil prices and it is no longer considered the biggest investment risk.  Investors now consider economic stagnation in the world economy to be the biggest investment risk.

“The recent stock market run may be lulling investors into a false sense of security and they may have become blindsided by investment gains. As optimism builds and investors seek out higher returns there is a danger they will inadvertently take on too much risk. Increased optimism should not come at the expense of managing investment risk,” said Paul Evans, Head of Region, Middle East & Africa, Old Mutual International.

The research shows a staggering 98 per cent of investors in the region recognise the benefits of using a discretionary fund manager (DFM) to manage investments. Just two per cent did not see any benefits to using a DFM.

Among the top reasons cited by investors was the reassurance DFMs can provide in ensuring investment portfolios match the level of risk they are comfortable with. They also value the ability of a DFM to create tailored portfolios which meet their investment requirements and believe the tight controls DFMs have in place can help protect against investment losses.

“The role of managing investments is extremely complex, and it is not surprising that most investors recognise the benefits of having an investment expert manage that process for them. Since establishing a representative office in the region in early 2016 we have seen increasing demand for tailored portfolio services from investors who have high investment expectations but recognised the importance of having them managed in a controlled way,” said Mark Leale, Head of Quilter Cheviot Investment Management’s Dubai representative office.