DBS to launch ETF portfolios for retail investors, Companies & Markets

Tue, Sep 03, 2019 – 5:50 AM


DBS will be extending its robo-investment platform digiPortfolio to retail investors with the launch of two portfolios comprising Singapore and UK-listed exchange-traded funds (ETFs) by the end of the third quarter.

The new portfolios will allow retail customers to tap investment strategies from the bank’s wealth management team that are traditionally limited to private banking customers, in a bid to “democratise access to financial expertise” and lower the barriers of investing, said DBS in a press statement on Monday.

The Asia Portfolio, which requires a minimum investment sum of S$1,000, offers Singapore Exchange (SGX)-listed ETFs that provides the investor with exposure to Singapore, China and India.

This is also the bank’s first portfolio of SGX-listed ETFs.

Investors seeking global diversification in their portfolio can opt for the Global Portfolio, which offers UK-listed ETFs for a minimum investment sum of US$1,000.

Slated to launch by the end of the third quarter, both choices give investors instant access to a collection of four to seven ETFs that represent between 200 and 13,000 holdings in a single transaction, and come with a flat annual management fee of 0.75 per cent without further sales charge, platform fees and lock-in period.

Based on their risk appetites, investors can choose from three risk levels in each portfolio.

Leveraging the bank’s wealth management investment expertise, the new portfolios are constructed with carefully selected ETFs and reviewed quarterly.

Rebalancing is auto-initiated when necessary to ensure the portfolios remain resilient to market volatility, said the lender.

The use of robo-technology on the digiPortfolio platform to automate processes such as back-testing, rebalancing and monitoring has enabled DBS to offer its wealth management services at lowered costs.

“Technology has helped us to avail some services to our retail clients, that in the past, was almost impossible to do so at affordable rates,” said Jeremy Soo, DBS head of consumer banking group for Singapore, at a media briefing on Monday.

The bank’s flat annual management fee of 0.75 per cent is comparable to that of robo-advisor StashAway, which charges 0.8 per cent for investments up to S$25,000 – the fee is progressively lowered with higher investment amounts.

The Singapore-based startup offers retail investors a range of portfolios comprising ETFs and index funds with no minimum investment sum. It has amassed more than 80,000 users on its platform since 2016.

Amid a growing robo-investment scene, DBS believes that its fully in-house robo-investment solution will give it a leg up on the competition.

“There’s a choice to work with tech firms or buy into other people’s platform but we believe in building all our tech in-house, which will help us to scale and achieve efficiency … our portfolios can be put together more seamlessly,” said Mr Soo.

“We do everything on our own. That’s the crux of our strategy.”

With that, the bank is also in no hurry to roll out more investment options for retail customers.

“Having more doesn’t mean it’s better. We see that customers are already finding it hard to choose what to invest in, there is no added value in providing a long list,” said Mr Soo.

The bank will continue to monitor trends – such as the rising popularity of sustainability-linked funds among younger investors – before expanding its offerings.

The DBS digiPortfolio platform was first launched in March this year with two portfolios comprising unit trusts – offered only to DBS Treasures clients who have assets under management of S$350,000 and above.

In contrast, the bank’s new Asia portfolio is available to customers with no prior investment experience.

The early access sign-up for DBS digiPortfolio is now open and will close at the end of the month.

Customers who have indicated their interest to invest will receive a notification once they receive access to DBS digiPortfolio.

by : Natalie Choy

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