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SCMP Reporter

HONG Kong's unit trust industry is poised for strong growth next year.

  New marketing strategies will aim to encourage more investors to take a look at the potential of the 1,000-plus authorised funds in Hong Kong.

  Major banks such as the HSBC Group and Citibank have started selling unit trusts at their branches, thus making these financial products more accessible.

  This should help to increase the number of people investing in funds. Currently only four per cent of investors are into unit trusts.

  'Banks are becoming much more aware of the unit trust market. The four per cent who invest in unit trusts in Hong Kong tend to be mainly more experienced investors and I think a lot of people still tend to be intimidated by them,' said HSBC Life's divisional director, Angus Woolhouse.

 'By making it possible for people to just visit their local bank branch, we are making them much more available to people who, traditionally, have not used unit trusts before.

   'We have spent an enormous amount of time training banking staff to be able to inform customers about retailing unit trusts. Simplicity and access are our key words. We are trying to make it as easy as possible for people to invest in funds.'    Fidelity International's funds are also sold at banks throughout Hong Kong and the company is confident that this approach will help to attract more unit trust investors.

   'Our funds are now available through 550 different bank branches and we see these banks as playing a key part in our distribution strategy,' said Fidelity's marketing director, Lisa Popick.

  Another company which expects to see a better year for unit trusts is Jardine Fleming.

  Unit trusts account for about 25 per cent of JF's business.

  'Last year was slow because most of the markets were terrible. Virtually every market in the region was down and the unit trust industry had a tough time. But, if you look at the figures, our market share went up last year and the same has been true of this year,' said Jardine Fleming director Paul Armstrong.

   Unit trust firms hope monthly savings plans will help lure new investors.

   Virtually all unit trust companies operating in Hong Kong now offer regular savings schemes to clients who, after making their initial investment of US$1,000 to US$2,500 (HK$7,800 to HK$19,500), can then invest between $1,000 to $3,000 every month to buy more units.

    This scheme frees investors from having to decide the ideal time to enter the market.

    Often, investors will buy when a market is at its peak and sell when it is near the low, which is the opposite of what a professional will do.

  By investing set amounts regularly in a fund, an investor can also take advantage of the system known as dollar-cost averaging. These regular investors buy more shares when prices are low and fewer when prices are high.

   As a result, the average price which a share has reached over, for example, a 12-month period, should be higher than the average price they paid for it. The system has been tried, tested and works.

 'Regular savings plans are the biggest growth area for unit trust companies at the moment. What we are finding is that, every time someone invests a lump sum with us, they now also make a regular savings plan to invest a certain amount every month,' said Templeton director Stewart Aldcroft.



Trusts extend reach