Fund manager: Stay invested no matter what the economic situation is

GAX MD managing director and chief executive officer Ronnie Tan(pic) said financial inclusiveness has to cut across all people, regardless of their income, necessities and social standing.

PETALING JAYA: Saving among the young is increasingly becoming a concern due to the presence of the gig economy.

Some do not even have an account with the Employees Provident Fund (EPF), let alone save, and for those who do, it is usually insufficient for post-retirement expenses.

Studies have shown that more than 60% of Malaysians who retired at the age of 55 did not even have at least RM240,000 in their EPF accounts.

And this is where MyTheo felt millennials should take better control of and to start planning for their future.

MyTheo is a digital investment management service by Silverlake Digital INX Sdn Bhd and MoneyDesign Co Ltd, through their joint-venture company GAX MD Sdn Bhd.

GAX MD managing director and chief executive officer Ronnie Tan said financial inclusiveness has to cut across all people, regardless of their income, necessities and social standing.

“There’s a whole segment in Malaysia today which we are more concerned about, the millennials and the underserved segments, about 8 million of them and they do not have the privilege or the opportunity to be served by a wealth manager.

“Things are not going to get better because millennials lack the financial literacy, ” he said, adding that it is even more alarming that some 60% of those that were declared bankrupt were aged between 25 and 34 due to personal loans, car loans and credit cards.

Tan attributed this to the need for instant gratification, the lack of discipline and the easy access to personal loans.

Tan: We think that everyone can invest for a better tomorrow, so long as you are disciplined.

He said it is vital to stay invested no matter what the economic situation is and as far as MyTheo is concerned, its objective is to encourage, enable and empower everyone to save.

The Securities Commission-licensed service, which invests in exchange-traded funds (ETFs) mainly in the United States using algorithms, has made it affordable for those who are just kickstarting their investment journey, starting from just RM100.

“We think that everyone can invest for a better tomorrow, so long as you are disciplined.

“Based on our past performance and projection for MyTheo, we think we can get about 10% (returns). If you save RM300 every month, you will be accumulating over RM60,000 in 10 years.

“Over 30 years, it will be around RM640,000. If you can manage your expenses and live within your means, saving even RM200 monthly is a very strong proposition, ” said Tan.

MyTheo, which was just launched in June this year, will automatically curate, construct and manage a portfolio using its algorithms, depending on the risk appetite of each investor.

It adopts the Japanese “omakase” approach, where it prepares a “set meal” for the investor based on the amount put in.

“We take the nitty gritty away from the investors. We do the necessary buy and sell on a discretionary manner and the intention of getting good returns so you don’t have to pick individual ETFs.

“With technology and big data, we’ve segregated the portfolios to growth, inflation and income based, ” he said.