Grab launches investment product Earn+, brings financial services under new brand GrabFin
GRAB Financial Group, the financial arm of Grab, on Monday (May 23) launched new investment product Earn+, as well as GrabFin, a brand that consolidates its digital payment services, insurance, lending and wealth management services.
Slated to roll out to all users at the end of the week, Earn+ is the group’s second investment product and marks its latest foray into an increasingly competitive space for digital investment services.
It will come under the GrabFin brand, which brings all of Grab’s financial services together under one roof.
Existing services that will come under GrabFin include payment services GrabPay wallet and card, “buy now, pay later” service PayLater by Grab, investment platform AutoInvest and insurance services for ride hailing and priority food delivery. The existing services also include those for Grab’s merchant and driver partners, such as insurance coverage and cash loans.
Earn+ has a projected yield of 2 to 2.5 per cent and users will be able to start off with a minimum investment of S$1, with no maximum limit or lock-in period, said Grab. It will invest in well-diversified, short-term bond funds offered and managed by Fullerton Fund Management and UOB Asset Management.
The lack of a lock-in period will allow users to withdraw funds into their GrabPay wallets or transfer to their bank accounts at any time, without incurring penalties and early withdrawal charges. Earn+ is not capital guaranteed.
Users will have to pay a 0.59 per cent annual fee to maintain the actively managed funds under their Earn+ portfolios. This includes fund management fees and other costs such as custodian cost. Grab said it will not charge any additional fees.
In a media briefing, Wong Wenbin, Singapore head of GrabFin, noted that the product is suitable for first-time investors who have savings that they do not need to immediately access, with short- to medium-term goals of 12 to 18 months.
He added that the service will also provide access to low-risk, investment-grade bond portfolios, which were previously only available to institutional investors. “In today’s volatile environment, it can be a good complement to our users’ investment portfolio as a low-risk investment option,” he said.
Grab, which has various verticals including mobility and delivery, pushed into investments after it acquired robo-advisory startup Bento in 2020. The group is jostling with tech players such as Sea in a bid to capture financial services market share in a region still afflicted with a large underserved population.
Grab’s first investment product, AutoInvest, allows users to invest an amount of their choice with every GrabPay transaction. Wong said when it was introduced in September 2020, the aim had primarily been to introduce users to savings habits.
“Commercially… it’s not going to be a product that brings a big amount of assets under management, because (the investments are) going to be dollar savings,” he added.
AutoInvest, which invests in money market and fixed income funds managed by Fullerton Fund Management and UOB Asset Management, had difficulties countering the market volatility of the past 2 years.
But the team kept the lessons learnt from AutoInvest in mind when rolling out Earn+, he noted. He said Earn+ invests into well-diversified funds as “delivering positive returns is not going to be done with just one product”.
As part of its financial offerings, the technology company is also soon to launch a digital bank. It secured a local digital bank licence through GXS Bank, its joint venture with Singtel in late 2020. The same alliance won a Malaysian digital bank licence in April this year.
But it is not yet ready to venture into one of the hottest asset classes for youths - cryptocurrency - although it lets users pay for the digital assets on platforms like Coinhako and TripleA.
“We've seen very encouraging and interesting behaviours from these users, but we want to be very deliberate about moving into this space,” he said.
