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OCBC, Amundi launch Singapore's first fund with dollar-cost-averaging feature
OCBC Bank and European asset manager Amundi on Tuesday launched a fund with an embedded dollar-cost-averaging (DCA) feature, said to be the first of its kind in Singapore.
Known as the Amundi-OCBC Momentum Fund, it aims to address the needs of investors during these tumultuous times with its built-in DCA feature that levels out the overall investment purchase price with regular bite-sized placements, similar to a regular savings plan.
The portfolio manager will initiate the DCA for investors. The fund leverages the cost-averaging effect when it systematically allocates assets from an initial pool of fixed income securities to equity exchange-traded funds. This smoothens near-term bumps and potentially averages out the cost of investment, OCBC and Amundi said in a joint press statement.
Investors in the fund will also be paid a regular dividend and benefit from further capital appreciation even as markets move higher, the statement added.
According to the OCBC Financial Impact Survey for Covid-19 conducted this May, some 54 per cent of Singaporeans aged 21 to 65 are worried about how their portfolio investment performance would be affected by the novel coronavirus pandemic. Yet, younger Singaporeans were optimistic, with 30 per cent of respondents in their 20s and 28 per cent of those in their 30s intending to increase their investments.
Tan Siew Lee, OCBC Bank's head of wealth management for Singapore, noted that the volatility in financial markets in recent months, largely because of the pandemic and geopolitical factors, looks set to continue even into 2021.
“Our view is that investors should remain calm because global authorities are better prepared today to deal with Covid-19 than they were when the pandemic first hit,” she said. “They should manage risk by investing carefully, staying diversified across asset classes and taking on risk gradually over time through regular investments – in other words – dollar cost averaging.”
Eric Bramoullé, Amundi’s chief executive officer of South Asia, added: “It is important for investors to look beyond the current volatility and stay on track with their long-term investment goals. Investing is a long-term plan, and success should be measured according to that plan, not the day-to-day movement of the market.”
The new fund is managed by Amundi and distributed by OCBC Bank. It is available to all OCBC Bank clients until Dec 31, 2020, with a minimal initial investment sum of S$5,000.