If you thought the ETF market was already crowded, 2025 has proven otherwise. In just the first four months of the year, 847 new ETFs were launched worldwide, according to global research firm ETFGI. Even with 179 closures, that’s a net gain of 668 new ETFs, making it a record-breaking start to the year.
With the United States, Asia Pacific, and Europe leading the way, there’s now more choice than ever. But this also raises a crucial question for UAE investors: is it worth investing in ETFs now, or should you proceed with caution?
ETF Options Are Growing Fast—but Should You Jump In?
ETFs (Exchange-Traded Funds) are known for being affordable, flexible, and easy to trade—just like stocks. From global indices and gold to artificial intelligence and clean energy, there’s an ETF for almost every theme. This makes them popular among both beginner and experienced investors.
For UAE-based investors, ETFs provide an excellent way to diversify beyond local markets. With platforms offering access to international stocks, you can invest in US tech giants, Asian growth stories, or European stability. But with over 8,000 ETFs available globally, more choice also means more confusion.
How to Decide: Is It Worth Investing in ETFs Now?
Before diving into the sea of ETFs, ask yourself these key questions:
1. Where Do You Want to Invest?
Do you want exposure to US tech? Emerging markets? Commodities? If you feel that the S&P 500 is too tech-heavy, there are sector-specific or equal-weight ETFs that might better suit your strategy.
2. What Type of ETF Fits Your Goals?
Some ETFs track major stock indices like the S&P 500 or MSCI World Index, while others focus on bonds, gold, or real estate. Active ETFs are also gaining popularity, but these can come with higher fees. If you’re just starting, stick to simple, low-cost index ETFs.
3. What Are the Costs and Tax Rules?
Many UAE investors prefer UCITS-compliant ETFs listed in Europe as they’re often more tax-efficient than US-listed ETFs. Always check the expense ratio—a lower number means you keep more of your returns.
Why This Surge in ETFs Matters for UAE Investors
Thanks to growing access through both local brokers and international platforms, ETFs are becoming a go-to investment tool in the UAE. Even with a few hundred dirhams, you can start investing. That’s why both Emiratis and expats are looking at ETFs as a smarter option than high-cost mutual funds or risky single-stock bets.
But the boom also comes with a warning. With hundreds of new ETFs entering the market—many with flashy themes or complex structures—it’s easy to get distracted. Just because a new ETF is trending on social media or covers a hot industry doesn’t mean it’s right for you.
Starting or Refining Your ETF Strategy in 2025
If you’re new to investing or want to adjust your current approach, start small and stay consistent. Many UAE investors use dollar-cost averaging—investing the same amount monthly—to reduce the risk of market timing. Another approach, value-cost averaging, adjusts the investment amount based on performance.
And remember, you don’t need to get it all right at once. The most important step is to start. You can tweak and improve your strategy over time.
Is It Worth Investing in ETFs Now?
Yes—but with a plan.
The surge in ETF offerings in early 2025 shows how much interest this space is getting. But more ETFs don’t automatically mean better opportunities. As a UAE investor, the value lies in choosing ETFs that are affordable, easy to understand, and aligned with your financial goals.
Avoid the noise. Stick to the basics. And build a portfolio that works for you. For more such updated news stay updated with 10X Times News.
