• The Middle East is seen as higher-risk but higher-reward in the long term
  • Local investors trim portfolio contributions, but still back key UAE sectors

Abu Dhabi, United Arab Emirates: : UAE retail investors’ remain confident in the local economy and stock market, despite heightened geopolitical tensions and market volatility according to  the latest UAE Retail Investor Beat survey, from trading and investing platform eToro.

Confidence in the UAE stays strong

The survey of 1,000 UAE retail investors found that 91% express confidence in the long-term performance of UAE-based companies, unchanged from August 2025. Confidence in the UAE economy now stands at 90%, only marginally down from 92% in August. Similarly, 83% of respondents hold UAE-listed stocks, compared to 85% in August.

This confidence holds despite 38% of investors saying that geopolitical tensions in the Middle East will definitely have an impact on their portfolios in the next six months, and another 40% saying they will be somewhat impacted.

Interestingly, 35% of UAE investors now consider the Middle East economically risky to invest in, up from 30% in the last survey. At the same time, the percentage of investors who anticipate strong growth for the UAE stock market in the next 12 months has dropped from 48% to 42%, while the percentage forecasting moderate growth remains at 34%. Yet, looking at the long term, more investors now believe the Middle Eastern stock market will generate the strongest returns in five years or more compared to other countries and regions, rising to 60% versus 58% previously.

George Naddaf, Managing Director at eToro (MENA), commented: “The UAE market continues to demonstrate resilience and retain the trust of local investors. Even during previous periods of unforeseen disruption, such as the COVID-19 pandemic, recovery has been swift. Confidence is still very much part of the picture, even as investors become more selective in how they position for what comes next.”

“It is notable that UAE investors see higher risk but higher return potential in the Middle East. They acknowledge that geopolitical tensions are likely going to slow down momentum in the next year or so, but the majority still anticipate growth, this short-term obstacle is not going to get in the way of the region’s long-term investment thesis.”

Investors reassess portfolio contributions

Still, investors are showing some more caution in how they are managing their portfolios. Fewer people are increasing their portfolio contributions, both over the past three months (57% vs 65%) and in the next three months (65% vs 76%).

At the same time, while a small minority, a growing number of investors say they plan to reduce the overall amount invested in their portfolios over the next three months (7% vs 1%). Meanwhile, 8% report having already decreased their portfolio investments in the past three months, up from just 2% previously.

Despite heightened caution, investors have not totally retreated. 80% say that they have already adjusted or plan to adjust their portfolios in response to geopolitical tensions, but reducing exposure to UAE equities and holdings in impacted countries are not the most common approaches – only 25% of them chose each of these options respectively. Instead, for more local investors, the answer is not to pull back, but to invest more: in precious metals (56%), energy commodities (43%), and global equities outside of affected regions (31%).

Optimism still rises across key UAE sectors

Looking ahead to the next twelve months, among sectors in the UAE, investors are most optimistic about real estate, technology, and energy. In fact, they are more upbeat about energy (43% vs 37%), healthcare (23% vs 22%), and consumer goods (19% vs 16%) compared to the last survey. Only small drops were seen in real estate (54% vs 55%), and tourism and hospitality (31% vs 33%).

“Risk is recognised, but it is not a deal-breaker for a significant portion of investors,” added George Naddaf. “We are seeing a more deliberate approach to portfolio strategies, with investors focusing on sectors and assets they believe are better positioned to withstand volatility. Some sectors in the UAE are already witnessing rebounds like real estate, financial services, and energy.

“Overall, the data points to a clear shift in behaviour rather than a loss of confidence. UAE investors are staying invested, but with a sharper focus on resilience, diversification, and risk management as they navigate an uncertain global environment.”

Media Contacts: etoro@golin-mena.com

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