How to Invest in Mutual Funds in UAE: The Ultimate Guide

What is a Mutual Fund?

A mutual fund is an investment vehicle that pools money from multiple investors like you. It’s managed by professional fund managers, so you don’t have to spend time researching, buying, or selling individual stocks and bonds.

In simple words, A mutual fund is a bucket of investments. Each bucket may hold a few or many investments like stocks, bonds, or other securities. So, when you buy a mutual fund, you are buying a collection of investments.

Each investor owns units of the fund proportional to their contribution.

Mutual funds offer the following advantages;

• Diversification 

• Liquidity

• Convenience

• Affordability

• Expert oversight

👉 Think of it as a ready-made basket of investments that you can buy into based on your financial goals, risk appetite and investment horizon. 

Click here to book a Discovery Call to understand how mutual funds in uae can help you achieve your investment objectives.

Why Invest in Mutual Funds in UAE?

“Mutual funds were created to make investing easy, so consumers wouldn’t have to be burdened with picking individual stocks.” - Scott Cook

Here’s why they’re especially valuable for UAE-based investors:

• Tax Efficiency: No capital gains tax in the UAE

• Wealth Accumulation: Ideal for medium- and long-term goals

• Currency Hedging: Mitigate the risk of currency depreciation by investing in USD and other currencies.
  
  

• Liquidity: Withdraw or switch funds when needed

• Low Entry Barrier: Start with as little as $500–$1,000

• Professional Management: Let the experts handle portfolio construction and risk

• Diversification: Reduce risk by investing across asset classes and geographies.
  
  
• Beat Inflation: Stay ahead of rising costs by earning higher returns.

Types of Mutual Funds in UAE 

• USD-Denominated Indian Equity Funds – Tap into India’s long-term growth

• S&P 500 Index Funds – Broad exposure to the US market

• Shariah-Compliant Funds – Ethical investing aligned with Islamic principles

• Bond & Sukuk Funds – Stable income from fixed-income instruments

• Money Market Funds – Low-risk, short-term capital preservation

• Target Date Funds - Optimized to meet financial goals within a specific time frame.

Book a Discovery Call to discuss your investment goals and I will help you select the best mutual funds in UAE.

How do Mutual Funds work?

Every mutual fund has a stated objective—such as capital growth, income generation, or balanced investing. The fund manager then builds a portfolio to match that objective.

Units are priced daily based on NAV (Net Asset Value), which reflects the market value of all assets held, minus expenses.

For Eg: BGF World Technology Fund

Stated objective: "The Fund aims to maximise the return on your investment through a combination of capital growth and income on the Fund’s assets. The Fund invests globally at least 70% of its total assets in the shares of companies the main business of which is in the technology sector."

How do Mutual funds Generate Returns?

Mutual funds can generate returns for you through various mechanisms, and the performance of the funds is closely tied to the performance of the underlying assets within the fund's portfolio.

Here are the primary ways by which mutual funds generate returns:

1. Capital Gains:

• Price Appreciation: When the market value of the assets held by the mutual fund increases, it leads to capital gains. This occurs when the prices of stocks, bonds, or other assets in the portfolio rise over time.

• Selling Assets at a Profit: Mutual funds may sell assets within the portfolio at a higher price than their purchase cost, realizing a capital gain.

2. Dividend Income:

• Stock Dividends: If the mutual fund holds stocks, it may receive dividends from the companies in which it has invested. These dividends are often distributed to investors as income or reinvested to compound the value of your investment. 
  
  
• Interest Income: For mutual funds holding bonds, interest income is generated when the bonds pay interest. This income is typically distributed to investors or reinvested.

3. Interest Income:

4. Derivative Instruments:

Mutual funds may use derivative instruments such as options and futures contracts. Gains or losses from these derivatives can impact the fund's returns. While derivatives can enhance returns, they also introduce additional risks and complexities.  

Common Mistakes Residents Make with Mutual funds in UAE

1. Starting Late – Delaying means missing out on compounding.

2. Chasing Past Returns – What worked last year may not work now.

3. Expecting Quick Growth – Mutual funds are not get-rich-quick schemes.

4. No Goal Alignment – Investing without a destination = financial drift.

5. No Plan – Most DIY investors lack a strategy or review process.

💡 How I Help: My GAiM Plan process begins with understanding your complete financial picture and goals, then applies a personalized investment strategy with regular reviews and adjustments.

Top 10 Mutual Funds in UAE 

After analyzing over 200 global and regional mutual funds, I’ve shortlisted the Top 10 funds that are best suited for UAE-based investors. These selections are based on:

• 💱 Currency compatibility (USD or AED-denominated)

• 📊 Risk-adjusted performance and long-term consistency

• 📉 Low drawdown history and fund resilience

• 🌍 Global diversification with local accessibility

• 🎯 Alignment with expat-specific financial goals (retirement, education, passive income)

While I cannot share the fund names publicly, these include:

• 🚀 High-growth global equity funds

• 🔄 Balanced income-growth funds

• 🕌 Shariah-compliant options for values-based investing

• 💵 USD-denominated dividend funds for passive income

• 🧬 Sector-specific outperformers (tech, healthcare, energy)

📥 Want to know the exact fund names, performance data, and which ones suit your financial goals?

👉 Click here to schedule your session now →

🎁 I’ve created a private PDF titled “Top 10 Mutual Funds for UAE Expats” — available exclusively after a Our Discovery Call.

Case Studies 

Real Case Study 1 – Mr. King Singh: On Track to Build $1 Million

Mr. Singh, a C-suite executive, started with a $100,000 initial investment and invested $5,000/month into a moderate-risk mutual fund portfolio.

• 🗓️ Period: Oct 2022 – Jul 2025

• 📈 Portfolio value: $315,178.75

• 📊 XIRR: 8.35% per annum (net of charges)

Projection: At this rate, Mr Singh will hit $1 million in just 6 years and 3 months (by Oct 2031).

Real Case Study 2 – Mr. Sharma: Building $500K with Discipline

Mr. Sharma, a new expat, began investing $1,050/month, later increasing to $2,100/month.

• 🗓️ Period: Sep 2021 – Jul 2025

• 📈 Portfolio value: $97,236.36

• 📊 XIRR: 12.80% per annum (net of charges)

Projection: He’s on track to reach $500,000 in just 7 years (by Jul 2032).

✅ Consistency beats timing.

Fees & Charges:

Let’s face it — no one enjoys paying fees. And when it comes to investing, it's easy to get caught up in comparing costs.

But here’s the reality, you’re not investing just to save fees — you’re investing to grow your wealth.

So the better question to ask is: “Which option will help me accumulate more wealth, after all costs are considered?”

Ongoing Fund Charges (OCF) 

Every mutual fund comes with an Ongoing Charges Figure (OCF) — this typically includes:

• The fund manager’s fee
• Operational and distribution costs
• Administration and compliance charges

The good news is that these costs are already built into the fund’s NAV (Net Asset Value). That means the returns you see — whether it's 8%, 10%, or 12% — are net of all these fees.

You’re not paying anything over above to get the declared returns. 

Platform or Plan Fees:

When you invest through regulated platforms like Zurich, MetLife, Ardan, Sukoon, or Salama, there are plan or platform-level charges. But they come with significant added value:

• Access to world-class funds

• Strategic portfolio construction

• Ongoing financial planning

• Timely rebalancing & market insights

• A real person (me!) keeping you focused and informed

You’re not just buying investments — you’re getting someone in your corner.

Someone who understands your goals, keeps you steady when the markets shake, and helps you make decisions you’ll feel proud of five, ten, twenty years from now.

What I Tell My Clients

Instead of asking:  “How do I pay the least?”
Ask yourself: “Which approach helps me grow the most, with the least stress, and the highest confidence?”

Because in the long run, it's not about finding the cheapest option…

It's about building wealth with ease and achieving your financial goals.

Tax & Withdrawal Rules for UAE Residents

• No capital gains tax on mutual fund growth or redemptions

• No income tax on dividends or interest income

• No Exit loads 

• Early exit penalties may apply for investment plans from Insurance companies 

Bottom Line: With the right setup, mutual funds in the UAE offer liquidity, flexibility, and tax-free growth.

Why Choose Me vs DIY or Robo Platforms?

DIY / Robo advisory Platforms offer affordable access—but no personalization or planning.

Here is a quick comparison of the difference;

My Proprietary Systems include;

• The GAiM Plan – A complete financial planning framework

• AccuWealth – Aggressive wealth accumulation strategy designed for Expats 

• Infinity Wealth Plan – A strategy to make your wealth outlive you

This isn’t just investment advice—it’s a systematic path to financial freedom.

🚀 How to Start Investing in Mutual Funds in UAE?

Here’s a simple 5-step process:

1. 🎯 Define Your Goals – Retirement, passive income, education?

2. 📊 Assess Your Risk Profile – Conservative, moderate, aggressive?

3. 🧭 Choose the Right Platform – Zurich, Ardan, MetLife, Salama, Interactive Brokers

4. 💼 Build Your Portfolio – Diversify across geographies and asset classes

5. 🔁 Review Regularly – Rebalance and realign every 6–12 months

Your Goals Deserve a Plan That Works

Investing is about more than growing your money—it’s about reaching what matters most to you, like early retirement, securing your family’s future, or building a passive income stream.

👉 Book a free Discovery Call today, and let’s create a plan to achieve your financial goals. Schedule Your Call Now

Frequently Asked Questions