Fintech: New robo-advice offer in the city

Retail investors are spoiled for choice these days. Versa, a local startup that allows individuals to invest in a money market fund, this month launched its robo-advisory solution to help the man in the street generate better return on investment.

Individuals can invest in the two new investment portfolios for as low as RM100 and an annual management fee of 1%. No sales fees are imposed, says Versa boss Teoh Wei-Xiang.

“Most mutual funds in the market have a sales fee or withdrawal fee, which eats away at investors’ returns. We operate according to a model that does not require any advance fees from investors, says Teoh.

He says that Versa app users can start investing in the two newly launched investment portfolios. Those with a higher risk appetite can invest in the growth portfolio, while those with a lower risk can invest in the moderate portfolio. These portfolios are managed by Affin Hwang Asset Management (AHAM), a partner of Versa.

“We will soon launch our conservative portfolio,” he adds.

What is unique about Versa’s investment portfolios compared to other existing robo-advisory firms? Teoh says that each of their portfolios consists of a number of actively and passively managed funds, unlike some of their peers who only invest in passively managed exchange traded funds (ETFs).

“We try to get the best of both worlds. AHAM chooses actively managed funds that are well positioned to surpass the market. It also chooses cost – effective ETFs that suit the market environment,” he says.

Based on retested results, Teoh says that Versa’s moderate and growth portfolios have generated annual returns of 9.1% and 15.7% over the past three years.

A look at the Versa app shows that their two portfolios invest in various funds managed by AHAM, HSBC, BlackRock, Vanguard and PIMCO.

“Our app users can invest in the two portfolios by performing a money transfer via FPX or using their money invested in AHAM’s money market fund.”

Teoh says that Versa has attracted around 45,000 customers who invest approximately RM170 million in AHAM’s money market fund offered through the app.

“The money that flew in has grown and stabilized. We feel it is time to expand our product range now, he says.

The start-up has several plans in the pipeline, says Teoh, as it is in the middle of the fundraising activity. “We recently received an eight-digit capital injection commitment,” he adds, revealing few details.

These plans may include the launch of thematic portfolios aimed at the younger generation, who like to invest in ideas. “They are very idea-centered. That’s why thematic investments are attractive to them. We’re looking at that, but not soon. We want to expand our existing portfolios first.”

The start-up’s plan to collaborate with a multinational finance company to let users use their money in AHAM’s money market fund for various purchases has been put on hold. – The plan is still ongoing. But we prioritize other things on our roadmap so far, he says.

“We will continue to focus strongly on user experience. We found that the buying and selling process for investment products is tedious and not seamless, with many young people being intimidated by it. It is our mission to make it easy, fun and rewarding. ”