Ninety One Plc, a US-based investment firm, is increasing its investments in the United Arab Emirates as demand rises for assets that are less affected by the US-China trade conflict. The firm’s emerging-market equity team, managing $11 billion in assets, sees the UAE as an attractive option because it remains relatively unaffected by the tariffs imposed by the US.
Varun Laijawalla, co-portfolio manager for emerging-market equities, explained that the UAE’s economic direction contrasts with that of the US. While the US imposes tariffs, the UAE is signing trade agreements and opening its borders to immigration. This shift has made the UAE an appealing market for the fund, especially as it seeks out markets that are “uncorrelated” with the US. Notably, the firm has been buying shares in prominent UAE-listed companies like Emaar Properties and Abu Dhabi Commercial Bank.
Laijawalla noted that the UAE’s unique economic factors shield it from the influence of US policies, making it a potential “escape trade” for investors. The American Beacon Ninety One Emerging Markets Equity Fund, co-managed by Laijawalla and Archie Hart, has seen a strong performance, returning 13% over the past year and outperforming 95% of its peers.
The fund’s exposure to the UAE has increased since November 2016, when President Trump was elected. In addition to investments in the UAE’s real estate and banking sectors, the fund also added shares in Talabat Holdings, a food delivery company that raised $2 billion in an IPO last year. However, Talabat’s shares have struggled, trading about 10% below the initial offering price.
The largest holdings in Ninety One’s fund still come from China and India, which represent about 40% of the total portfolio. Xiaomi, a Chinese tech giant, was the biggest contributor to returns in 2024. Additionally, Meituan, a food delivery company, and Trip.com, an online travel agency, are also part of the fund’s portfolio. Laijawalla has also increased exposure to Turkish defense contractor Aselsan, which has seen a 62% rise in its stock this year.
The fund’s investment in the UAE is now overweight by 3% compared to the MSCI Emerging Markets index, making it one of the firm’s larger exposures. Despite the firm’s strong positioning in UAE stocks, Emaar, Talabat, and Abu Dhabi Commercial Bank have lagged behind the broader emerging-market benchmark.
