World Economy

With US stocks at record highs, here's why you should look to the Gulf for returns

Things are brighter than they seem in the U.S.

The Abu Dhabi Financial Group (ADFG), a private investment company with $5 billion in assets under management, told CNBC on Wednesday that its multi-million dollar fund was focused on Middle Eastern economies over the U.S.

"From a risk-reward perspective, we would shy away from the U.S. market and rather look at the GCC (Gulf Cooperation Council) markets, which have repriced significantly over the past two years since the oil price crash," said ADFG CEO Jassim Al Seddiqi.

His comments come amid a flood of concern over President Donald Trump's policies that have fanned fears about the U.S. economy and financial markets. But Al Seddiqi was quick to dismiss those worries.

"I believe the U.S. market is going to stabilize and perhaps re-price a little, especially with increased interest rates in the coming future, but I don't really see a disaster coming."

For now, ADFG's fund remains concentrated on its immediate region, including Egypt and Saudi Arabia, according to Al Seddiqi.

Buildings in Abu Dhabi along the Sultan bin Zayed the First Street, United Arab Emirates
DeAgostini / Getty Images

Within ADFG's home market, the United Arab Emirates, real-estate and financial services were the most popular investment sectors, he noted.

Within Europe, Al Seddiqi said his company was very active in the London real-estate market. "The sterling's weakness has been very attractive for us and will result in more opportunities."

The fund, launched on the Abu Dhabi Global Market two years ago, has managed 385 percent returns since inception and operates on a principle known as constructive activism, Al Seddiqi said.

"It's a more subtle approach to activism, it's more constructive with the management of boards of public companies in the U.A.E."