GCASH Invest Money - first impressions and initial review

Summary: The GCASH Invest Money platform is a convenient, low friction way of starting investing in mutual funds, and is well suited for young individuals who are just starting with their careers with little disposable income and with unbanked individuals looking for a convenient way to invest without having to go through the hassle of opening a bank account.  

I have always been a proponent of setting aside some disposable money for investment on a regular basis to take advantage of value cost averaging to minimize the volatility risk inherent in investment instruments. Most often, the main hindrance for people for maintaining this habit is the ease in which they can subscribe to additional investments and the minimum amount for the initial and subsequent investments. Another big issue is the fact that a huge percentage of the population in the Philippines remain "unbanked" or those that are not served by any banking institution and the associated services they offer. This second point is prevalent with the members of the informal economy and micro business sectors.

Late last year, I have received this invitation to try out a product from GCASH (still at Beta at the time) called GCASH Invest Money. What impressed me was the low initial participation amount of 50 pesos. This was really affordable compared to other similar products being offered by other investment companies that I was aware of but it should be noted that other investment companies have similarly lowered the initial investment amount (Sunlife Financial Philippines decreased their initial investment from 5,000 pesos down to just 1,000 pesos at around the same time) so this push to encourage more Filipinos to invest in Mutual Funds is an ongoing trend in the industry at the time.

What makes this offering from GCASH so attractive is the convenience of doing everything right in your smartphone via the GCASH app. There are multiple cash-in options available and it is as easy as visiting the nearest 7-Eleven convenience store to add funds at no additional fees. They even have a feature to set up reminders to encourage people to contribute regularly at a level that is not too hard on the wallet and investors could choose to increase that contribution at a much later time when their disposable income also increases as they progress in their careers. This is especially beneficial for younger individuals who are just starting out in their careers but at the same time have that financial maturity to realize that they should start investing early to prepare for their futures.

The GCASH Invest Money is actually being managed by well-established investment institutions in case you are having doubts with Globe Telecom, Inc.'s ability to handle your investments. GCASH is actually a brand under G-Xchange, Inc. (GXI) - a wholly owned subsidiary of Globe Telecom, Inc. For now, the partner handling the investment management is ATR Asset Management, but I am unsure if they will have other partner companies offering other investment products in the future.

Registration is simple enough. It is just a matter of selecting the "Invest Money" icon shown below, fill up the required personal and financial information (for KYC or "know your customers" regulatory requirements), accept the terms and conditions, do the risk profile assessment (it will determine what investments will be recommended based on your investment goals and risk appetite).

You will then be taken to the Invest Money starting page. From this page, you can view your total investment at current market value, existing investment subscriptions, track your investment history, redeem investments, and other actions. You can proceed to make your first subscription by clicking on the "View Investment Products" and the app will list all the investment products being offered for your risk profile. Remember that succeeding screenshots may not be the same as yours since they might add to the products being offered or our risk profile is different.

At the time of this review, the only investment product being offered for my risk profile of "Moderately Aggressive" is the ATRAM Peso Money Market Fund. You can go ahead and check out more about the investment product by clicking on the "View Details." There you will be able to see what the investment product is all about and learn some interesting facts such as historical performance (always take note that historical performance is never a guarantee of future performance but is a good indication of how well the fund managers perform when compared against a benchmark or to similar product offerings so please do your homework!). 

I have set up an initial investment of 50 pesos which I mean to add the same amount every month (this represents the minimum participation threshold and subsequent investment one can make).

A confirmation notice will appear once you have made the transaction and you will also be notified via SMS and through e-mail.

It is that simple! Make sure you set up reminders if you like to contribute regularly (which is highly recommended). I would suggest you don't worry too much about whether your investment has increased or decreased after only a brief time. The idea here is to start with the investment habit early on in your working life so that it becomes second nature. Typically, investors will have an "investment horizon" so you don't have to worry about it until you have reached that. If you are saving for something specific within that investment horizon, there are calculation tools that can help you determine how much you should put away to realize that goal (just be mindful of investing only disposable income).

In summary, the GCASH Invest Money platform is a convenient, low friction way of starting investing in mutual funds, and is well suited for young individuals who are just starting with their careers with little disposable income and with unbanked individuals looking for a convenient way to invest without having to go through the hassle of opening a bank account.