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How to invest in ETFs in Dubai

Wondering what ETF to invest in? This guide will explain why buy ETFs instead of mutual funds, how to invest in ETFs in Dubai, what ETFs to buy and how much they cost. 

What is an ETF?

An Exchange Traded Fund is a combo of an index fund and a share. Basically, it is an open-ended investment fund that is traded on the stock exchange. It helps you make trades without dealing with the underlying assets that might screw it up. 


Why invest in them? 

As opposed to the usual stocks, these you can trade and sell at any time before the trading hours begin.

There are no minimum investments, so it appeals more to the individual rather than the rich guys. It is a great bet for those wanting to get their hands in the pot, without dealing with having to go all in.

Another great perk is that it deals more with foreign trades, and allows you to deal internationally. It for sure makes the big world of ours feel a little smaller when we are able to deal with those across the globe. It is connecting our economies and strengthening our relationships financially with all sorts of countries different than our own. 

The value of the trade will fluctuate throughout the day, depending on supply and demand during that time. Pretty basic stock market stuff, right?


Are ETFs safe?

As with any investment, there is always risk. Make sure you are investing in something that is in line with your attitude to risk and tolerance for loss.


How to invest in ETFs

If you plan on jumping on the bandwagon and investing in ETF's, you will need to choose a broker. Look for ones that don't charge commission. This will allow you to buy shares without having to pay unnecessary fees. Find out as much as possible about your broker, and make sure you look into their background too.

Discounts are not always optimal if they know what they are doing, so make sure that they are professional.

If you want to go at it alone, there are many execution-only investment platforms to choose from such as:


Read: how to build a portfolio of low cost index funds


Do your research first

Read up on good things to invest in, and choose which you will try out. Keep in mind your investing goals for the future and make choices accordingly. Try to stick to investments with low expense ratios. That's just smart investing! Make sure they have a good amount of assets. This is preferably at least ten million. Look at how many trades it gets per day, and make sure that the ETF gets plenty of it. 


Active vs passive ETF investing

Afterwards, make sure to choose whether or not you will make it a passive or actively managed. If you choose managed, you will be the one personally investing and dealing with it. Make sure you know what you are doing a little, so you can avoid the stress. This is for people who like to take charge of their own finances and are self-driven to keep it up. It will take effort.

Alternatively, you can have an investment manager build and actively manage a portfolio of ETFs for you, however bear in mind that this will add an extra layer of cost.

A passive fund will just track the underlying securities and see what is falling and what is rising. This one is a good option for people who are less prone to wanting to manage their own funds. Decide which one is best suited for you and your lifestyle, along with any promised commitments you may have. 


Keep it up!

Make sure you sell them before the "stop trading" date. You should wait long enough to optimise profits, but not too long that you miss it entirely. Keep your ear to the ground and be proactive!


So, should you invest in ETFs?

ETF investing can be a very rewarding thing if you know what you are doing. Do your research and make decisions based on you and your life - not the decisions of others. Everyone is different in their needs so make sure you are keeping that in mind.

Choose a broker wisely, ETFs in the same manner, and be proactively involved as much as you can. Hopefully, with all this in mind you have a better sense of how to invest in the UAE, and what exactly an ETF can do for you! Happy investing!



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