Where are UAE residents parking their savings and why

Shifting investment priorities

UAE residents are becoming more particular about where they park their savings. Gone are the days when their ultimate goal was to buy a house. While real estate continues to top the charts in big-ticket investments, a growing number of investors are looking at spreading their money across global equities, gold, fixed income and digital assets.

Artificial intelligence has emerged as the defining investment theme of the year. At Sarwa, an online trading platform, AI-related trades account for around a quarter of all activity on the platform. “Investors look beyond the headline names to the chips, memory, and data centers powering the AI buildout”, said Faisal Abdulshakour, Wealth Advisor at Sarwa. They’ve seen this shift particularly since April this year.

Century Financial, another UAE based financial services and brokerage firm, has seen a similar pattern. Chief Investment Officer Vijay Valecha says semiconductor exposure has stood out. “As the Nasdaq keeps hitting fresh highs through the year, chipmakers, data centres and automation-related companies are being sought after.” He also notes that the easier way to get exposure to these themes, are through ETFs like QQQ, SOXX among others.

Popular exchange traded funds

Exchange-traded funds remain the preferred vehicle for accessing a variety of themes. Valecha said S&P 500, Nasdaq-100 and semiconductor-focused ETFs, such as SPY, QQQ and SOXX, dominate client portfolios.

At Sarwa, S&P 500 ETFs, including Sharia-compliant options, remain popular for broad exposure to the US market, Abdulshakour said, and major IPOs have also drawn heavy trading, with SpaceX becoming the platform's most widely traded asset following its June listing.

Gold and fixed income assets

Gold continues to hold its place as a core hedge against inflation, fiat currency depreciation and geopolitical risk. Prices swung sharply this year, climbing to a record $5,589 an ounce before falling below $4,000 and recovering to around $4,300.

Madhur Kakkar, Founder and CEO of Elevate Financial Services, said investors should treat gold as a diversifier within a broader portfolio. “A measured allocation [to gold] can help investors navigate periods of geopolitical uncertainty and market volatility,” he said.

Higher interest rates have made income-generating assets more attractive this year. Kakkar pointed to short-dated fixed income and money market funds as a way for investors to earn a meaningful return on the cash portion of their portfolio while retaining liquidity.

Digital assets and portfolio strategy

For the more high risk-appetite investors, digital assets have carved out a big chuck in their mainstream portfolios. Bitcoin exposure via ETFs such as IBIT has grown steadily, with the fund now holding roughly 60% of all US spot Bitcoin ETF assets, part of a broader $102.5 billion market, Valecha said, signaling rising institutional acceptance of the asset class.

There is no one-size-fits-all approach, Kakkar adds. “A sensible allocation should combine liquidity for short-term needs, fixed income for stability and income, global equities for long-term growth, and selective diversifiers such as gold or real estate.” The right mix, he added, ultimately comes down to an investor's goals, timeframe and appetite for risk.