Modern day investing has become more affordable and accessible to the average retailer thanks to technology and widespread distributors. However more still needs to be done to get investment options to those who need them. This platform is created to do just that. We aim to lift participation in the investment of mutual funds by fractionalisation. Fractionalisation is the concept of splitting up an asset class (mutual funds in this case) into portions, slivers, or slices such that they are smaller than a whole share.
At present, mutual funds at USD 5,000 or 10,000 (depending on the fund). This would mean an average retail client, is priced out of most funds. Through fractionalisation, the client will be able to invest as little as $10 thereby investing in a fund that is otherwise unavailable.
To further ensure that participation is lifted, the platform will offer financial education. With the target market in mind, look to create be-spoke marketing material that not only explains the product simply but also educates the client on the risks and rewards.
The platform will initially have an offering of select low risk mutual funds (PRR <4) which will essentially be more appropriate for the target market. The clients will be invited to make buying bids at desired fractions. The platform will then pool together all clients bidding for the same fund until the minimum price is achieved. At that point the purchase will be executed, and each client will own the fraction of the unit in accordance to their purchase.
Our target clients are 25-40-year-olds in developing and developed financial centres with SCB presence i.e., Dubai, Nairobi, Singapore, Hong Kong, Lagos. These markets contain clients falling in the personal segment of the bank which would put them on an earning threshold of between USD 2,000 and USD 10,000.
The platform would offer mutual funds and over the counter bonds (through the Bloomberg market). It would initially look to mirror what is already on offer at SCB. As wealth is a group run business, the project would leverage off due diligence conducted (such as performance analysis and PRR etc) by the Group Wealth teams.
The entity is proposed to be registered in the Abu Dhabi General Market (ADGM). The jurisdiction has been singled out due to its initiatives to attract fin-techs and disruptors around the globe. It’s the first jurisdiction globally to have a full-fledged crypto currency framework.