Dennise Williams, Staff Reporter
Oliver Chen, vice-president of mutual funds at First Global Financial Services.
"MUTUAL FUNDS, like insurance, are sold, not bought. You have to develop a relationship with clients and sit with them one-to-one to explain the benefits," said Oliver Chen, vice-president of mutual funds at First Global Financial Services (FGFS).
Mr. Chen along with the assistant vice-president of regional marketing, Safiya Burton sat down with the Financial Gleaner to discuss FGFS' new role as mutual fund-selling agent of Canadian-based CI Investment Inc. which started in November.
The timing of this new partnership is lucky, as investors have shied away from the lagging stock market in what has been a challenging year for the brokerage community.
One popular alternative investment is to place funds in foreign currency denominated instruments. Hence, overseas mutual funds become an attractive product for investors who seek diversification.
NO ACCIDENT
Of course, the FGFS partnership with CI Investments is no accident.
FGFS' parent company, GraceKennedy (GK), has for some time established a strong relationship with Raymond Chang, a Jamaican-Canadian billionaire. Since 2004, Mr. Chang has been the board chairman of GraceKennedy Capital Services Limited.
And his company, CI Investment Inc. is considered one of Canada's leading investment management companies with an offering of over 300 funds.
Here in Jamaica, FGFS will be offering only 40 of the funds. And for the next three months, they will be the exclusive distributor of CI Funds and, thereafter, other financial services firms will have the opportunity to sell the funds.
Ms. Burton explained, "CI funds has invested world-wide. There are funds for every investing appetite from risky to conservative."
Mr. Chen adds, "The CI strength is they are the number one fund company in Canada based on ratings given by Morningstar Canada."
Overviews of the mutual funds show that there will be offering investing opportunities in the United States, Europe and Japan. Additionally, the funds cover a wide range of industries such as energy, financial services, health, and science and technology and consumer products.
Mr. Chen adds, "Right now, the Canadian economy is doing much better than the U.S economy. Canada has a lot of natural resources such as oil, natural gas, gold and uranium; and this is the year of high prices for natural resources. So if an investor wishes to participate in this sector, there is a CI Fund available."
Mr. Chang, himself, guides the investing philosophy of the funds. He says, "One should typically have at least two-thirds of one's investment in core products, consisting of mainly blue chip and fixed income, with the rest in riskier investments such as emerging markets or industry-specific funds."
And so FGFS has developed four investor profiles from conservative (sensitive to short term volatility), conservative moderate (willing to accept some risk but cautious), moderate (desires to beat inflation over the long run) and moderate aggressive (desires to moderately outpace inflation).
Ms. Burton adds, "We have to manage investor expectations. If someone comes in with a two year investing horizon we steer them away from stocks because that is a long term investment."
Now from FGFS' perspective, Ms. Burton explained the game plan for the mutual fund department.
"We see ourselves long term as a distributor for many other mutual funds world-wide. Already, we distribute GK Funds, a Caribbean based mutual funds and now we are offering investors a wider international option."
And unlike the GK Funds, which have a US$10,000 minimum opening balance, the CI Funds has a more moderate minimum of US$1,000.
