Dec 8 2016, 01:13 PM
QUOTE(puchongite @ Dec 8 2016, 01:03 PM)
I have no problem if they want to charge 2% SC for small investments. But when it comes to bigger investments, that's where they scheme will appear rather not making sense while other places the fund can be purchased at 0% SC. Even for a gold member, he just gets .5% off the 2%, ie he still needs to pay 1.5% SC. Any promotion comes with 1% SC or 0.5% SC would just render the whole "reward" scheme useless.
I think they have to desire to make more money from the bigger investments because that's where they could get enough money to sustain the operation but I think this is not make sense from investor point of view. With competition around having different offerings, this scheme is seen as "punishing" the bigger investments.
I don't know for sure how eUT gets money to fund their operation. The fact that they offer 0% SC for bigger investment amount, that's something which make sense. Maybe they get it from the fund management company via the management fees. But it is a rewarding scheme for investing more ! Not the other way round.
I do agree on your view that investors with larger sum would look for lower cost for its quantum, but at the same time, I think the need of HNWI is very different, they probably wouldn't mind paying a bit more for services that they need. and chances are they won't turn to DIY style investing as their time can be better spent making more money than the cost savingsI think they have to desire to make more money from the bigger investments because that's where they could get enough money to sustain the operation but I think this is not make sense from investor point of view. With competition around having different offerings, this scheme is seen as "punishing" the bigger investments.
I don't know for sure how eUT gets money to fund their operation. The fact that they offer 0% SC for bigger investment amount, that's something which make sense. Maybe they get it from the fund management company via the management fees. But it is a rewarding scheme for investing more ! Not the other way round.
Not to mention they would probably not allocate a lot into funds, they can buy bonds and shares directly and still be meaningfully diversified
So I thought what FSM MY is doing now is meeting the needs of their targeted audience - the younger generation with not that much to invest.
As to unit trust fund as a vehicle, this is one of the most popular vehicle for retail investors other than FD due to minimal monitoring required
So maybe the questions we should all ask ourselves is, is this the right investment vehicle? Should you consider other vehicles like direct shares and ETFs instead?
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