The research, conducted by Lloyds TSB Private Banking, suggests Emirati investors are responding to on-going volatility in financial markets by selling higher risk investments and holding more cash.

"Despite Emiratis' cautious approach to emerging markets in general, 35 per cent identified India as the most attractive world market for investment," said the report.

"Emerging market investments, once the rising star of financial markets, are now considered `too risky¿ by many Emiratis, only 13 per cent would consider adding them to their investment portfolio in the next six months," it said.

The bi-annual Investor Outlook Survey by Lloyds TSB Private Banking reveals that 28 per cent of investors in the UAE increased their cash allocation in the past six months, against only 18 per cent who decreased it.

Anthony Valgimigli, Head of Middle East, Lloyds TSB Private Banking said Emirati investors seem to be battening down the hatches - holding more cash and investing in assets that they judge to be safe.

“Yet at the same time, a portion of investors are still attracted to typically riskier emerging markets such as India, although most have not been willing to take the risk and invest there”, Valgimigli said.