FinEx, a London and Moscow-based ETF issuer, has partnered with Rosbank, a subsidiary of Société Générale, to launch an automated investment service called SmartInvest aimed at Russian private investors.
Arnaud Denis, First Deputy Chairman of Rosbank.
SmartInvest offers globally diversified portfolios built exclusively using ETFs listed in Russia.
Asset allocation is completely automated based on the user’s investment horizon, goals, and risk tolerance – ascertained through an initial questionnaire.
Portfolio construction is based on Modern Portfolio Theory, behavioural finance as well as FinEx’s own portfolio management research.
The service aims to deliver a truly client-focused solution by allowing shifts between different asset classes based on changing market conditions and individual investment needs such as risk appetite, liquidity aspects, and an investor’s ability to monitor their portfolio.
While many automated investment services assign investors to one of a limited number of buckets, SmartInvest’s process means its investment universe can be represented with several hundred portfolios.
FinEx is the major provider of ETFs in the country, offering 13 of the 15 ETFs currently listed on Moscow Exchange. As such, the firm’s ETF range is primarily used to construct SmartInvest portfolios although any future ETFs listed in the country will be eligible for inclusion.
FinEx’s range includes ETFs offering exposure to equities, fixed income, gold, and cash equivalents. Its equity products include most developed market exposures (such as US, UK, Germany, Australia, and Japan) as well as China and Russia equity funds. Its single fixed income ETF targets the Russian Eurobond market.
Users of the service are required to put up an initial minimum investment of 100,000 rubles (approximately $1,500).
SmartInvest portfolios are eligible for ISA accounts which provides tax benefits of up to 52,000 rubles per year (approximately $790) as well as avoiding capital gains tax. The service may be accessed through the FinEx website or through Rosbank’s internet banking platform and is also available on mobile platforms.
“The aim of SmartInvest service is to provide high-quality asset management tools to all types of investors who seek a profitable savings strategy,” said Arnaud Denis, First Deputy Chairman of Rosbank. “We believe that everyone should have the opportunity to save up for a large purchase or provide yourself with a decent pension savings.”
“SmartInvest is aimed at providing investment solutions to all types of clients ranging from successful entrepreneurs to students at the very beginning of their careers”, added Oleg Yankelev, FinEx Managing Partner.
The overall service fee is 1.9% per annum for the first three years. In order to promote longer investment horizons, fees decrease to 1.3% after three years. These fees include all management costs including trading costs but do not include the costs of holding the underlying ETFs.
FinEx and Rosbank are also offering a promotion whereby investors who sign up to the service before the end of 2018 will receive a remuneration of the service fee for their first three months.