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SPOTLIGHT

NRIs biggest risk takers in investment

DUBAI, November 29, 2016

New research has uncovered large differences in the understanding, attitudes and engagement of investors from different nationalities living in the UAE.

The report, carried out by financial solutions provider Old Mutual International and investment management firm Quilter Cheviot identified UK expatriates as the most risk averse while Non-Resident Indians (NRIs) were the most informed on their investment portfolios.

The research found that 48 per cent of UK expatriates in the UAE believe they are ‘risk averse’, compared to an overall average of 32 per cent. North American (NA) expats were in line with the average at 32 per cent, while 21 per cent of European expats (excluding UK) identified themselves as risk averse, and NRIs charted as the least at 17 per cent.
 
The largest percentage identifying themselves as risk takers were NRIs (33 per cent), followed by European (21 per cent), UK expats (20 per cent), and just 16 per cent of NAs.

The research also found that NRIs are more involved in their investments compared to other nationalities. 92 per cent review their investment portfolio either monthly or quarterly with their adviser, compared to 79 per cent of European respondents, 58 per cent of NAs and 53 per cent from the UK.

And this level of engagement was also demonstrated by NRI’s knowledge of their investments. 75 per cent said they know most or all of what they are invested in, compared to 74 per cent of Europeans, 65 per cent of UK expats and just 63 per cent of NAs.

Another surprising difference came from the attitudes of investors based in the UAE’s largest two cities. More investors from Dubai (32 per cent) identified themselves as risk takers, compared to 22 per cent from Abu Dhabi, while 39 per cent from the capital claim to be risk averse compared to 26 per cent from Dubai.

Brendan Dolan, regional director, Middle East and Africa, for Old Mutual International, said: “It is perhaps no surprise that investors have different behaviours and expectations depending on their nationality, as cultural and geographic variances play a key part in shaping who we are. We know from our own experience in the region that different nationalities have different behaviours, and this research echoes those variances.

“UK expats, for example, are typically more cautious, they tend to invest for the long term, and will place a high value on the services provided to them from their broker. NRIs on the other hand seem more comfortable with taking investment risk, and may seek out shorter term opportunities, constantly reviewing the strategy within their portfolio.

“These differences highlight the extent to which financial advisers and providers need to tailor their approach to meet a range of expectations,” Dolan said.

The research also highlighted some differences when it came to what investors consider is the most important benefit of a discretionary fund manager (DFM), an investment expert who manages the investment portfolio on the customer’s behalf.

The findings show most expats believe that matching investment portfolios to their individual level of risk is the most important benefit of a DFM. However, while expats from the UK believe the tight controls DFMs have to protect against losses was the most important benefit, NRIs believe it is the ability to provide a truly tailored investment portfolio.

Mark Leale, head of Quilter Cheviot’s Dubai Representative Office in the DIFC, said: “Attitudes of investors based in the UAE are changing and they now have an increased level of understanding of investment risk and more specific requirements than ever.

“Investors are increasingly attracted towards the services of a DFM, but these services can vary greatly between providers. Investors need to carefully select the DFM they feel will match their needs and expectations and take account of underlying cultural variations.” - TradeArabia News Service
 




Tags: investment | Risk | NRIs |

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