Fund houses growing online channels

Fund houses themselves are growing their own online channels and some expect digital distribution to increase its share of AUM to pose strong competition to the banking channel. A Thai manager Cerulli recently spoke with now generates more than 70% of new transactions through its proprietary online application, just two years after rolling it out. Notably, it is not only mass investors that use the fund house’s digital platform, but also high-net-worth clients, who are served by investment managers.

Fund managers in Thailand embraced digital platforms early on, enabling them to start reaping the benefits of this channel. Third-party platforms such as Ascend Wealth, FINNOMENA, and Robowealth now have established rosters of partner local fund houses. In 2022, for example, Robowealth and Schroders launched a new multi-asset portfolio of Thailand-domiciled funds as part of their strategic partnership announced in 2021.

In Malaysia, new investment platforms are still being rolled out—adding to several existing ones. E-wallet operator Touch ‘n Go Group, for example, launched a digital platform, GOinvest, in 2022 to sell mutual fund products, starting with Principal Asset Management’s Principal Islamic Money Market Fund. In March 2023, Islamic fintech firm Saturna also launched a digital investment platform to distribute its two local Shariah-compliant equity trust funds, promising zero sales and redemption charges.

Vietnam is also seeing the entry of investment apps, such as Infina and Anfin, which were both launched in 2021 and target Gen Z and millennial investors. Older player Finhay reportedly attracted more than 2.7 million registered users, highlighting digital platforms’ potential for fund distribution in this market.

Mutual fund sales

Aside from stocks, deposits, and other financial products, these platforms also offer mutual funds. Infina, for example, distributes open-end funds from Dragon Capital, Viet Capital Asset Management, and Mirae Asset. Mutual fund investment starts at VND100,000 (US$4.00). Finhay has a smaller minimum required investment of VND50,000 and distributes more than 10 local retail funds from several fund houses—including bond funds, equity funds, and ETFs. Unlike Infina and Finhay, which have more diverse options, Anfin only distributes ETFs in terms of funds.

Moving forward, mobile apps could become a game-changer in mutual fund sales as more and more Southeast Asian customers do their purchases and transactions via mobile devices. Research by Insider Intelligence estimated that the number of smart phone users in the regions would reach more than 326 million in 2022—with a penetration rate as high as 98.8% in Thailand. This suggests that there is significant potential for mobile transactions to increase, including fund trading.

It also points to the opportunities to shift marketing to mobile platforms. While the COVID-19 pandemic accelerated digital marketing at many fund houses and distributors, some of the approaches of the past over two years are no longer that effective, now that in-person activities have mostly gone back to normal. Webinars for investors, for example, may no longer be as popular as they were when people were caught in lockdowns. Hybrid events might be more successful at engaging investors right now. Digestible content in the form of short videos can also be effective when targeting Southeast Asia’s younger investors. Likewise, social media strategies continue to be relevant, including in distributing engaging content.