Blue chip stocks are no longer out of reach.
OCBC's new Blue Chip Investment Plan makes blue chip shares accessible to retail investors. We interviewed Mr Dennis Tan, Head of Consumer Financial Services (Singapore) and Group Premier Banking, OCBC Bank, to learn more about the revolutionary investment plan.
Please tell us more about the plan.
The OCBC Blue Chip Investment Plan, a regular investment plan that allows retail investors to purchase Straits Times Index (STI) stocks for as little as S$100 a month. Investors can use cash or, funds from Central Provident Fund (CPF) or Supplementary Retirement Scheme (SRS) accounts to invest in one or more stocks from a selection of 19 Mainboard STI stocks and one STI Exchange Traded Fund (ETF).
OCBC Bank also saves first-time investors the hassle of opening securities trading and Central Depository (CDP) accounts by buying the stocks on their behalf on a pre-determined date every month. The 19 stocks were selected as they are included in the CPF Investment Scheme (CPFIS) from the entire portfolio of 30 blue chip stocks in the STI.
What is significant/unique about this plan?
Under this plan, OCBC Bank saves first-time investors the hassle of opening securities trading and Central Depository (CDP) accounts by buying the stocks on their behalf on a pre-determined date every month. The 19 stocks were selected as they are included in the CPF Investment Scheme (CPFIS) from the entire portfolio of 30 blue chip stocks in the STI.
“Blue Chip” is defined as common stock of a nationally-known company, with a long record of profit growth and dividend payment. Statistics from the Singapore Exchange (SGX) showed that the STI has returned an average of 9.3 per cent per annum over the last 10 years, excluding dividends.
As a leading wealth management player, OCBC Bank has identified a gap in the investment behavior of young working adults. Some of them have found investing in equities out of reach given the amount of upfront cash needed. As a result, they could miss out an important asset class for wealth creation. Another group of customers – the busy professionals, have also not invested in equities because they have no time to monitor the performance of these stocks.
The investment behavior gap was validated by speaking to these two groups of customers. Among those who wanted to start investing, they were most interested in equities. However, many did not know how and where to start or did not have the time to monitor the different share counters.
Many too felt that most blue chip stocks were out of reach since one lot (1000 shares) can cost up to a five-figure sum. The OCBC Blue Chip Investment Plan was developed to address this gap as an accessible way to invest into blue chip stocks and build a portfolio for the long term in a simple, regular and affordable way.
Why should investors consider investing in it?
Whether investments are for your children’s education, or to grow your wealth for a nice retirement, we want to ensure no customers are deprived of such opportunities. We are always looking at ways to expand our offering of retail wealth products.
And the OCBC Blue Chip Investment Plan is yet another such offering. We recognise that there is this group of customers who are interested in investing but has never traded shares or has no time to monitor shares. With this plan, we have closed this gap by making it very simple and accessible for anyone who wishes to participate in blue chip stocks, in an affordable way.
Anything you'd like to add?
To educate the public on the importance of regular investing, OCBC Bank will work jointly with SGX to organise public seminars and road shows to help raise awareness, starting in July 2013. Existing OCBC Bank customers can apply for the Plan via OCBC Online Banking.
Non-OCBC Bank customers can send in their application via mail. They can choose to sell the shares in their plan or change the investment amount anytime via OCBC Online Banking.
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