SCHRODERS Asia has launched a unit trust savings scheme that does not require an initial lump sum investment. It has been a bruising year for the unit trust industry and its investors with the market taking a slow-motion tumble from its beginning of the year record highs. A savings scheme helps investors to take the guesswork out of knowing when to invest in the stock market. But it is not a get-rich-quick scheme. It offers a cheap alternative for those wanting to accumulate a portfolio over the medium to long term, say, five to seven years. About 20 unit trust firms offer such schemes. Purchasing units on a regular basis, typically, once a month, diminishes the impact of market peaks and troughs. Known as dollar-cost averaging, it takes away the need for exact timing. This is particularly significant for the Asian tiger economies whose peaks and troughs do not seek to be able to be predicted by even the most seasoned analysts. But as with any investment, there is an element of risk. Dollar cost averaging can work against an investor if the market quickly rises and then falls. Richard Haw, a director of Schroders Asia, said: 'With a regular monthly investment, it can help you to capture the long-term growth opportunities by spreading your money throughout the market cycle. 'For example, if you had started to invest US$300 per month in Schroders Asian Fund five years ago, your total investment of US$17,700 would have grown by 90 per cent to US$33,688 despite all the ups-and-downs of the past five years. 'It also provides a convenient way of saving as the direct bank debit allows you to put aside a set amount each month,' he said. 'It also emphasises that unit trusts are a savings product rather than a punting product.' Investors whose pension funds are managed by Schroders, or employees of around 100 companies in Hong Kong, are also entitled to a three per cent discount from the initial charge. This reduces the initial charge to two per cent and the annual to between one and 11/2 per cent. Some financial advisers are reluctant to recommend unit trust savings schemes because their commission payment is lower than what they would receive from a lump sum investment scheme. Another attraction is that investors can usually gain access to their money without incurring heavy redemption penalties. But investors should check their product particulars because in some cases the unit trust company will impose a fee of between two and five per cent if the money is withdrawn within the first two years. Some forms of savings schemes on offer from insurance companies are linked to whole-of-life insurance or endowment policies. They generally offer reasonable returns if held for their full term. But as the insurance companies pay the adviser a generous up-front commission, the costs to the investor of early surrender are generally high. In addition, investors should be confident that they will be able to maintain the premium payments for the term of the policy. The Schroder scheme allows the investor to start with a minimum contribution of HK$2,000 a month, with no initial lump sum investment Mr Haw said: 'We have looked at what our competitors have on offer and taken what we think is the best aspect from each scheme for our own.'