OCBC sells equity fund sans upfront charges
Some analysts see the unprecedented move will be followed by other players.
OCBC Bank (M) Bhd's move to market equity funds without upfront sales charges, hence making it the first bank to do so, is not expected to significantly impact the sales of unit trust funds of other players but may set the stage for the launching of similar funds to boost market share.
At the moment, there is no regulatory requirement for fund houses or institutional unit trust agents or advisers like banks to sell funds without upfront charges unlike in the west where this practice is more rampant.
Industry players feel there are other vital factors that affect investors' decision to invest in funds like investors' risk profile, the quality of funds and fund performance.
Some observers opine that the move by OCBC would lead to other players taking the same route in coming out with funds with no upfront charges. Some argue that the upfront charges of up to 5% would help investors secure better returns at the time of investing even though they may have to fork out higher management and redemption fees.
As OCBC Bank head of consumer financial services Charles Sik puts it: "Investors can now earn from the very start rather than begin with unit trusts to recoup 'early losses' incurred through the upfront fee."
View the full story in the Star.
