Amundi and OCBC Bank launch Singapore’s first-ever fund that Harnesses the Momentum of Dollar Cost Averaging
Europe’s largest asset manager Amundi and OCBC Bank, Singapore’s longest established bank, announced today the launch of the Amundi-OCBC Momentum Fund (Momentum Fund), the first of its kind in Singapore to build in a dollar cost averaging feature.
This also marks a milestone partnership between Amundi and OCBC Bank in developing a co-branded solution to address investor needs during times of stress and uncertainty, according to a press release.
Unique Feature: Embedded Dollar Cost Averaging
Dollar cost averaging is a well-known strategy initiated by investing with regular bite-sized placements, like a regular savings plan.
The Momentum Fund lets the portfolio manager initiate dollar cost averaging for the investor. The Fund leverages the cost-averaging effect when it systematically allocates assets from an initial pool of fixed income securities to equity ETFs. With the Momentum Fund, investors are also paid a regular dividend and will be positioned to enjoy further capital appreciation even as markets move higher.
The OCBC Financial Impact Survey for Covid-19 that was conducted in May 2020 sought to measure the financial impact on Singaporeans during the global pandemic. The findings enabled OCBC Bank to understand how and what Singaporeans do with their finances during the crisis and by understanding their needs, OCBC Bank’s wealth experts were able to provide targeted advice to help them move ahead especially during this crisis.
The findings showed that 54% of Singaporeans aged 21 to 65 are worried about how their portfolio investment performance would be affected by the Covid-19 pandemic. Yet, younger Singaporeans in their 20s and 30s are optimistic, with 30% of those in their 20s and 28% of those in their 30s intending to increase their investments. Those with retirement plans in their 20s (23%) and 30s (21%) are also setting aside more funds for retirement.
Tan Siew Lee, Head of Wealth Management, Singapore, OCBC Bank, said: “Financial markets have been volatile in recent months, largely because of Covid-19 and other geopolitical factors, and this looks set to continue in the coming months and even into 2021. With markets so volatile, some investors may run for cover. However, 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. Investors should stay invested in the market and not wait for blue skies. They should manage risk by investing carefully and staying diversified across asset classes and by taking on risk gradually over time through regular investments – in other words – dollar cost averaging. This can benefit investors by potentially lowering the average cost per unit of an investment, especially during times of volatility.”
Eric Bramoullé, CEO, South Asia, Amundi, said: “It is important for investors to look beyond 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 and not the day-to-day movement of the market. The new Amundi-OCBC Momentum Fund is not only good for existing investors looking to diversify their portfolios, but is also structured to help side-lined investors get into the momentum of investing again.”
This first co-branded campaign between Amundi and OCBC is a milestone partnership for us. It combines the engine of Europe’s largest asset manager and the expertise of one of Singapore’s longest-established banks. Importantly, it was a mutual meeting of the mind and innovative spirit in developing new products and services to serve the evolving needs of Singapore investors,” continued Bramoullé.
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