DBS to offer hybrid human-robo investment solution to retail investors

DBS's new portfolios will allow retail customers to tap investment strategies from the bank's wealth management team that are traditionally limited to private banking customers.
DBS's new portfolios will allow retail customers to tap investment strategies from the bank's wealth management team that are traditionally limited to private banking customers.PHOTO: ST FILE

SINGAPORE - Retail investors with at least S$1,000 to invest will be able to tap DBS's wealth management expertise to buy a portfolio of exchange-traded funds (ETFs) by the end of this month.

The robo-investment platform, digiPortfolio, combines investment strategies from the bank's wealth management team, which are traditionally limited to private banking customers, with computer algorithms to help automate the investment process.

This sets the Singapore bank apart from the other nine digital advisory services in the market, which provide portfolio advice with no direct human involvement.

The use of technology has helped the bank avail some of the services to all customers that in the past was "almost impossible to do so", said Mr Jeremy Soo, DBS' Singapore head of consumer banking group at a media briefing on Monday (Sept 2).

"Either you bring a lot of money to join a wealth management platform, (or else) all these things are not available to you," he noted.

For a start, the bank is offering retail investors with two portfolio options on its online banking platform.

The Asia Portfolio, which requires a minimum investment sum of S$1,000, comprises Singapore Exchange (SGX)-listed ETFs that provides investors with exposure to the Singapore, China and India equities markets, as well as the Singapore bond markets. This portfolio can be purchased by customers with no prior investment experience.

For those who are looking for global diversification, they can choose the Global Portfolio with UK-listed ETFs starting wiith US$1,000.

 
 

Both portfolio options come with three different risk levels, which translates to a collection of four to seven ETFs, representing between 200 and 13,000 holdings in a single transaction.

A flat annual management fee of 0.75 per cent is charged in return for portfolio construction, monitoring and rebalancing services.

"Everything is done in-house," said Ms Evy Wee, head of financial planning and personal investing. "The money that the investor puts in does not leave the bank and will not get passed to another asset management firm," she added.

The technology and intellectual property developed by the bank allows it to ensure that there are no further sales charges, platform fees or transaction fees involved. Investors are also not subject to a lock-in period.

A team of portfolio managers led by Mr Christophe Marciano, head of discretionary portfolio management, will review the portfolios on a quarterly basis to ensure that they remain resilient to market volatility, provide optimal returns, and remain aligned to DBS Chief Investment Office's views.

"But there are no constraints to do so more frequently," said Mr Marciano, when rebalancing is deemed necessary.

This hybrid human-robo investment platform was first made available in March to DBS Treasures customers, who have at least S$350,000 in assets under the bank's management.

By opening up access to this service, the lender aims to lower the barriers to personal investing for all retail investors.

Eventually it hopes to allow investors to use their Supplementary Retirement Scheme and Central Provident Fund accounts to invest in these portfolios.

The early access sign-up for the service is now open and will close on Sept 30 and the bank will inform those who have signed up once they are allowed access.

The service will eventually be fully opened after this introductory phase.