Dubai: Amidst high volatility on global markets various resident groups based in the countries of the Gulf Cooperation Council (GCC) have strong home market bias in their investment allocations, according to a recent study by Invesco Middle East Asset Management.

The study shows Gulf investors have relatively short investment horizons and prefer to keep their money in markets that are most familiar to them.

"An important take-away for invest managers from this study is that all expatriate investors in the GCC should not be regarded as homogeneous. There are significant opportunities in tailoring products to suit the preferences of each class of these investors," said Nick Tolchard, Head of Invesco Middle East.

Investment options with life wrappers were the preferred options for GCC expatriate investors; accounting for 64 per cent of Western expat assets and 56 per cent of Non-resident Indian (NRI) assets.

"Given that expatriates make up a substantial proportion of the population in some GCC countries, these segments therefore present a significant opportunity for international life companies," said Tolchard.

The study showed the top asset class favoured by all expat groups was global equities. It was followed by a strong home-market bias among each of the Western, Non-resident Indian and Arab segments.

A very important behavioural trend displayed among expat investors in the GCC was their focus on investing in home markets.

NRIs had the highest home-market bias among expats at 31 per cent (preferring India), followed by Arab expats at 27 per cent (focusing on Mena) and Western expats at 22 per cent. GCC nationals, on the other hand, demonstrated an overwhelming preference (55 per cent) for investing in their own region.

The home market theme is also reflected in investor risk appetite.

For example, Non-resident Indians had the greatest appetite for risk of all expat segments with target returns averaging 11 per cent while Western expats had the lowest target returns, averaging 7 per cent, and also the longest time horizons, averaging 6 to 7 years.

While 87 per cent of GCC nationals showed their preference to invest directly through tangible assets such as property, expatriate investors displayed quite different tendencies.

Global equities accounted for over 50 per cent of allocations for both Western expats and NRIs, and over 30 per cent for Arab expats, compared to a lower 20 per cent for GCC nationals. One likely reason is the greater internationalisation of expats versus the cultural ties of GCC citizens.