The firm, which is behind the B2C robo-advisory platform Aqumon, has been focusing on its B2B platform by providing robo technology to banks and asset managers.
When it launched in 2017, the robo had signed as clients Shenzhen-based China Resources Bank of Zhuhai, Guodo Securities in Hong Kong and Fortune Federation Financial Technology, a Chinese independent wealth manager with an office in Hong Kong.
Last year, the firm partnered with BOC International in Hong Kong. It also linked with China Asset Management in the SAR to co-launch an AI-powered China A-share strategy, which now has around $100m in assets.
This year, according to Ken Shih, the firm’s head of sales and marketing, Hong Kong-based CMB Wing Lung Bank launched its Magnum-based robo-advisory platform to banking clients.
“We have seen a lot of interest from retail banks in Hong Kong,” Shih told FSA recently.
Without mentioning any names, he said that another client bank in Hong Kong will be launching a robo-advisory platform next year and an insurer will also be using Magnum’s technology to re-package one of their offerings, he added.
The firm is also eyeing opportunities in the Greater Bay Area (GBA). Besides Shenzhen-based Bank of Zhuhai, the firm also expects to provide technology to a bank “with eight million clients”, he said.
“We’re thinking beyond Hong Kong and positioning ahead of the planned wealth management connect,” he said.
The Guangdong-Hong Kong-Macao GBA wealth management connect, which is still under evaluation, enables residents of Hong Kong and mainland cities in the GBA to invest in wealth management products in each other’s market through the banking systems.
“Eventually, we will be looking at opportunities in the mainland as well,” Shih added.
Bond ETF portfolio
Turning to its B2C platform, Shih said the firm will be launching this month a stand-alone all-bond ETF portfolio for Aqumon users.
“It is a defensive and conservative portfolio,” he said, adding that portfolio will include ETFs that focus in investment-grade corporate bonds as well as treasuries.
Other robo-advisory platforms also allow users to invest in a stand-alone product outside of the recommended portfolios that are usually based on investment goals and risk profiles. For example, Singapore-based Stashaway launched in September an income-generating portfolio that invests in equity, bond and Reit ETFs.
Aiming for more assets
Robo-advisors must have scale to be viable. To attract more investors, Magnum intends to lower its minimum investment for users by early 2020, Shih added.
Aqumon offers two options: users can choose to invest in either US-listed ETFs or Hong Kong-listed ETFs. Currently, the minimum investment for the US-listed ETF portfolio is $5,000 or HK$40,000, while the Hong Kong-listed ETF portfolio’s minimum is HK$100,000 ($12,780).
“We have received feedback from younger potential clients that they feel that the investment hurdles are high, so we are continually working on how we can offer more accessible products here in Hong Kong,” Shih said.
The new investment minimum will be $1,000 for the US portfolio, while the Hong Kong portfolio will be HK$50,000 ($6,387).
Shih noted that the minimum investment for the US portfolio has been slashed by 80%, versus 50% for the Hong Kong portfolio, because the majority of current Aqumon users have opted for the US portfolio.
“The majority of our clients have opted for US-listed ETFs as there are more choices there in terms of asset classes and the market is much more liquid than in Hong Kong.”
He also added that the minimum investment for the Hong Kong portfolio is higher because ETFs listed in the SAR are more expensive than those listed in the US.
“The lot prices for Hong Kong-listed ETFs are larger. So if both a US portfolio and Hong Kong portfolio have 10 ETFs each, you would need more money to invest in the Hong Kong portfolio,” he explained.
Shih claimed that the number of Aqumon users have grown by 150% during the first nine months this year, but declined to provide exact figures. At the end of December, the firm said the platform had 5,000 users.
