PETALING JAYA: With the rise of fintech and the introduction of robo advisers, the previous barriers to entry for investors are dissolving, leading the way to a new era of financial inclusion.
For digital investment management pioneer, MYTHEO, the driving principle behind it is to make investment affordable, convenient and accessible to the masses.
“These are the three key things we hope to achieve with the Digital Investment Management (DIM). Like AirAsia, MYTHEO’s mantra is everyone can invest. We want to enable and empower everyone to invest in a better tomorrow, regardless of their income, community or ethnicity,” GAX MD CEO and managing director Ronnie Tan Tai Ngee (pix) told SunBiz.
MYTHEO is licensed by the Securities Commission Malaysia as a digital investment service.
Tan said the platform takes on a different approach to construct its portfolio from the typical thematic-based and goal-based approach favoured by many other robo advisers.
Users have to answer five questions on the platform – age, retirement status, estimated total asset value, risk tolerance and investment timeline, in order for the platform to come out with the right investment portfolio for an individual.
Regardless of what goal, it eventually boils down to three fundamental criteria – growth, inflation and income.
Under the growth portfolio, Tan said MYTHEO will select ETFs with a high growth potential for investors looking for long-term returns, while the income portfolio focuses on funds with good dividends.
For the inflation portfolio, it is meant to protect an investor’s asset base from being eroded by inflation.
“For example, artificial intelligence might allocate a portfolio of 40% growth, 30% income and 30% to inflation depending on the age and the assets of an investor, but we allow our investors to customise their own allocation based on their risk appetite,” he said, noting that the investors will be alerted should they go beyond the risk level.
MYTHEO has gone through a stringent back-testing regiment to assess the robustness of its algorithm against historical data, as part of the requirement set by Securities Commission.
Despite that, currency risk is one of the primary concerns among MYTHEO users, especially in the current high volatility environment driven by the ongoing US-China trade war.
Tan noted that its underlying ETFs are invested in equities from seven major countries – Japan, the UK, Canada, Hong Kong, Australia, India and the US – which help diversify the investment risk.
The platform charges 1% of a user’s assets under management annually.
In the larger scheme of things, Tan shared that the intention behind Japan’s Money Design Co Ltd joint venture with Malaysia’s Silverlake Digital INX is to utilise GAX MD as a springboard to expand the robo advisory into other markets Asia.
“We’ll use GAX MD in Malaysia to start expanding beyond Japan. The important thing is to get the foundations and economics right.”
To achieve this, he said there is a need to understand the features and differences of each market in terms of its economic climate, sentiment, demographic and income capacity of each country.”
Speaking of the possible inclusion of other instruments, Tan touted that ETFs are the cheapest instruments today, although he did not discount the possibility of investing in other asset classes.
He also shared that DIM operator is currently contemplating accessing syariah instruments.
“It won’t be immediate, but it is part of our roadmap, where we are always assessing the needs and listening to the market feedback.”
