Investments for as Low as P50: GCash Democratizes Investing With GInvest
About 70 percent, or over 50 million of the Filipino adult population, remains unbanked, but projections say the figure will be cut down to just 20 percent by 2025. Financial technology platforms are doing their best to encourage more people to participate in formal financial transactions, particularly mobile wallet apps like GCash.
Now the app developed by Mynt and powered by Ayala-owned Globe Fintech Innovations has introduced an innovation that will likely shake things up in the fintech scene.
What is GInvest
GInvest is the country’s first-ever digital investment platform that allows more Filipinos to invest and grow their wealth through their phones. The feature seeks to dismantle the complexities commonly associated with investing, removing barriers that prevent ordinary folks from exploring ways to grow their money beyond just storing them in a deposit savings account.
“GInvest started three years ago to democratize investments and solve a problem for a high-potential, underserved market,” Winsley Bangit, chief customer officer for GCash. “With a Money Market Fund, GInvest was meant to be an alternative to traditional interest rates.”
Bangit says GInvest was inspired by Yu’e Bao, the money market fund (MMF) distributed on global behemoth Ant Financial’s payment network, Alipay.
“But we’ve evolved since then, and we’re grown into a different type of platform,” he says. “There is no other e-wallet in the Philippines that offers UITFs (Unit Investment Trust Fund).”
Officially launched in 2019 with a single MMF, GInvest currently has registered over one million accounts registered, which GCash says essentially triples the number of UITF accounts in the country.
How does GInvest work?
Through GInvest, users are granted access to the best performing assets, allowing them to invest their money stored in GCash in investment funds that are managed by ATRAM Trust Corporation, one of the leading independent asset managers in the country, and SeedBox Philippines, a company that has introduced digitized investing in the Philippines.
A GCash user may opt to invest in five different types of funds:
1| MMFs, which are the more traditional way of investing, like time deposits,
2| Philippine Total Return Bond Fund, which lets users invest in bonds in local companies and government,
3| Philippine Smart Equity Index Fund, which lets users invest in local companies through the PSEi index, like BPI, BDO, and Ayala,
4| Global Technology Feeder Fund, which lets users invest in tech trailblazers like Google, Apple, and Samsung), and
5| Global Consumer Trends Fund, which lets users invest in innovative companies like Shopee, Nintento, or Alibaba).
The best and most enticing part of GInvest is that users can start investing for as little as P50 (for local funds), and P1,000 (for international funds).
“The investments are Unit Investment Trust Funds or UITFs,” says Rex Mendoza, President & CEO of Rampver Financials, a local player in financial services specializing in investments and one of the biggest distributors of mutual funds in the Philippines. “The investors’ P50 to P1,000 minimum investments are pooled together to create economies of scale and clout, thereby creating the opportunity to earn more.
“The five products present a wide array of choices from a very conservative money market fund to an aggressive consumer trends feeder fund,” he adds. “The choices also present a range of geographic exposures from local market instruments to global markets, and investments in different industries and sectors. The important thing to take note here is the fact that such funds are managed by one of the best performing fund managers in the country (ATRAM), who has partnered with huge and vastly experienced international names such as Fidelity Investments and Invesco. The five funds give the GInvest (by GCash) investors the capability to allocate assets and customize a portfolio that matches their goals and risk appetite.”
Bringing down barriers
For GCash, developing GInvest was a way to bring down the barriers that prevent more people from making their money work for them.
“The biggest barriers have to do with perception, education and accessibility,” Bangit says. “Users tend to put off investment decisions because this feels too daunting to them, thinking it’s only pang-matalino (just for those who are smart). And even when they get over that mental hump, there are very few educational materials that really break down the topics in a way that can help them make sound investment decisions. By the time you’ve overcome that, you’re saddled with so much paperwork for every step of the process. So you can imagine the frustration of having to go through all these steps.”
GInvest solves these hurdles not just by lowering the minimum balance to opt in to the investment choices, but by making it available on the GCash platform, which, as of February 2021, now has over 33 million registered users.
“Every step of the journey from onboarding up until monitoring your investments is digitized end-to-end, making it very easy, convenient and secure,” Bangit says. “And of course, we incorporate education in our different channels, making sure it is relatable and easy to understand.”
Renaissance of retail trading
Bangit emphasizes a point that is already becoming evident—that Filipinos are becoming more financially literate and that it’s only a matter of time before they adopt more newer and sophisticated ways to manage their finances.
“We’re seeing the renaissance of retail trading right now with the world being at a standstill and with people finding alternative ways to earn or grow their money at the convenience of their homes,” Bangit says. “We wanted to leverage on that. But more than just hopping on to this trend, our goal ever since was to really give Filipino retail investors the investment access they need to reach their goals.
“Investing had always been dominated by the institutional or elite guys because there is just so much friction to invest,” he adds. “But that shouldn’t be the case. Investing should be easy and worry-free for everyone.”
With GInvest, hiccups such as app stability may become more of an issue, but Bangit says GCash is prepared to take on expected challenges.
“We’re definitely working to ensure the best quality service, but it’s a process,” he says. “We build with a certain target in mind and prepare a system based on these targets. A bigger challenge that we face with this feature is the lack of proper education and know-how when it comes to investing. A lot of the time, it’s always perceived as something that is too difficult or ambiguous to understand, or, put simply, a luxury only afforded by the upper class. With our product we’re here to break barriers and really make investing accessible and easy for all.”
And with news earlier this year that Mynt parent Globe Fintech Innovations’ valuation is nearing that Holy Grail of goals—$1 billion, enough for it to join the elite unicorns club—Bangit says a feature like GInvest can only help the company get there faster.
“We are expecting this will be one of the key drivers of the Mynt business,” he says. “Investors are clamoring for more access, and with these new products in place, we're confident that this will enhance our the growth of our bottomline.”