UAE retail investors have maintained confidence in the local economy and stock market despite heightened geopolitical tensions and market volatility, according to the latest UAE Retail Investor Beat survey published by trading and investing platform eToro.
The survey, which polled 1,000 UAE retail investors, found that 91 per cent express confidence in the long-term performance of UAE-based companies – a figure unchanged from August 2025. Confidence in the UAE economy stands at 90 per cent, down only marginally from 92 per cent in August. Some 83 per cent of respondents hold UAE-listed stocks, compared with 85 per cent in the previous survey.
This confidence persists despite 38 per cent of investors stating that geopolitical tensions in the Middle East will have an impact on their portfolios in the next six months, with a further 40 per cent saying they will be somewhat impacted.
Nine in ten UAE investors back local economy as Middle East tensions rise
The proportion of UAE investors who consider the Middle East economically risky to invest in has risen to 35 per cent, up from 30 per cent in the previous survey.
The percentage of investors anticipating growth in the UAE stock market over the next 12 months has fallen from 48 per cent to 42 per cent, while those forecasting moderate growth remains at 34 per cent.
However, when looking further ahead, more investors now believe the Middle Eastern stock market will generate the strongest returns over five or more years compared with other countries and regions, rising to 60 per cent from 58 per cent previously.
“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,” George Naddaf, Managing Director at eToro (MENA) said in a statement.
“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 are showing greater caution in managing their portfolios. Fewer are increasing their contributions, both over the past three months – 57 per cent compared with 65 per cent previously – and in the next three months, at 65 per cent versus 76 per cent.
A growing number, albeit still a minority, say they plan to reduce the overall amount invested in their portfolios over the next three months, rising to 7 per cent from 1 per cent. Meanwhile, 8 per cent report having already decreased their portfolio investments in the past three months, up from 2 per cent previously.
Despite this caution, investors have not stepped back entirely. Some 80 per cent say they have already adjusted or plan to adjust their portfolios in response to geopolitical tensions.
However, reducing exposure to UAE equities and holdings in countries affected by tensions are not the most common responses, with only 25 per cent choosing each of these options.
For many investors, the preference has been to move towards other asset classes rather than withdraw, with 56 per cent increasing their holdings in precious metals, 43 per cent in energy commodities, and 31 per cent in global equities outside affected regions.
Looking ahead over the next twelve months, UAE investors are most optimistic about real estate, technology, and energy. Sentiment towards energy has risen, with 43 per cent now expressing optimism compared with 37 per cent previously.
Healthcare has edged up to 23 per cent from 22 per cent, and consumer goods to 19 per cent from 16 per cent. Real estate remains the leading sector despite a marginal dip to 54 per cent from 55 per cent, while tourism and hospitality fell slightly to 31 per cent from 33 per cent.
“Risk is recognised, but it is not a deal-breaker for a significant portion of investors. 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,” Naddaf further explained.
“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,” he concluded.
