Fundsupermart.com wins SC nod

Fundsupermart.com wins SC nod
FUNDSUPERMART.com, the largest online unit trust distributor in Singapore, will soon hit Malaysian shores after it recently won the Securities Commission's nod to operate here, Business Times learnt.

The website is expected to go live around September this year. At that time, retail investors can buy unit trusts from various fund houses at significantly lower prices, sources said.

"Close to 100 funds, invested in different asset classes and geographical areas, from several fund management companies are expected to be available when the website is launched," a source said.

The portal is operated by iFAST Capital Sdn Bhd, a joint venture between OSK Investment Bank Bhd and Singapore's iFAST Corp Pte Ltd.

It is talking to about 10 fund management companies here and has already signed on a few major players to distribute their products online, the source added.

The concept of online fund supermarkets is very popular in more advanced economies where retail investors are more sophisticated.

Investors can compare the charges and performance of various unit trusts from different providers, before picking the best deals that suit their requirements. Their investment decision is helped by the editorial and investment planning tools provided by the online operator.

However, this business model is fairly new to most Malaysians. Investors are likely to take years to warm up to this concept.

"It's a learning curve. Even in Singapore, it took them a few years to break even and for the business to really take off," a source said.

The arrival of fundsupermart.com will give Malaysian investors even more choices as another online financial products provider, Tune Money Sdn Bhd, may also sell unit trusts on its website soon.

In Singapore, fundsupermart.com started operations in 2000, and has grown to have S$1 billion (RM2.38 billion) worth of assets under administration as at May this year. The operation has since expanded to Hong Kong last July.

Although the upfront sales fee that will be charged to Malaysian investors have yet to be decided, it will be much lower than the usual charges for equity funds of between five per cent and six per cent. In Singapore, for example, fundsupermart.com has brought down sale charges to around two per cent, from three per cent that are generally charged by fund management companies.

Internet distributors can cut sale charges because this distribution model incurs lower operating expenses as it does not need to hire agents to promote products.