Investment efund launches new e-commerce portal
Poland's first portal for investment funds has been launched, but instead of creating a new wave of e-commerce enthusiasm, analysts have given it a lukewarm reception.
Called efund.pl, the company plans to promote the idea of investment funds to Poles who are unfamiliar with the different types of investment schemes. The portal will be used as an online financial vehicle that pools together other investment funds.
"The mission of (efund.pl) is to collect and present ... in one place complete information about the Polish investment fund market and make investments in fund units more popular," the company said.
Roman Lewszyk, president of Investment Fund Services (OFI) and the founder of efund.pl, said one reason why investment funds had not been popular as viable financial instruments was the lack of information about them. People don't know what they are and how they work, Lewszyk said.
But with so few people directly involved with investment funds, Lewszyk could have his work cut out for him, industry sources said.
When asked about their investment plans, 97.5% of Poles said they do not put their savings into investment funds, according to a report by the Mutual Funds Association (STFI). Poles prefer bank accounts, insurance policies or direct investments on the Warsaw Stock Exchange.
So far, the only fund on efund.pl's books is the Upper Silesian Fund Management Co. (GTFI). But other fund management companies such as Invesco Fund Management Co., Pekao/Alliance Fund Management Co. (Pekao/Alliance TFI), Pioneer First Polish Fund Management Co. (Pioneer PPFI) and SEB Fund Management Co. (SEB TFI) will be offered soon, Lewszyk said. "By the end of October, we want to sign deals with the majority of investment fund management companies," he said.
But providing investors with information will not guarantee the portal's success. The company only makes a profit on distribution fees for selling fund units and to make the enterprise work, the portal needs to sell 500 transactions a day, Lewszyk said.
Andrzej Kolatkowski, manager of the Bank Handlowy Fund Management Co. (Bank Handlowy TFI), said this should not prove too much of an obstacle for the new company. "Provided it will be possible to sign contracts with half of the fund management companies, 500 transactions a day isn't much," he said.
Kolatkowski said that before efund.pl, the main way investors could find an offering of mutual funds was in brokerage houses. "The effects of this distribution channel are poor," he said.
Other industry analysts, however, remain skeptical about efund.pl's success. Jaroslaw Gorzko, the marketing director at BiznesPolska, a company creating a network of business portals in Central Europe, said he doesn't put his savings into investment funds, which in turn channel money into financial instruments such as bonds or shares. "There are many alternative forms of investment," he said.
Industry analysts also said the portal will have to raise its profile if it is to survive in cyberspace among the hundreds of other portals and web pages. Lewszyk admitted that efund.pl has yet to write its promotional campaign, but the company plans to come up with an advertising strategy in two weeks.
"It's in the interest of the funds to promote themselves because few people know that such funds exist and are an alternative to insurance policies," said Maria Skowron-Szafranska, an analyst at CDM Pekao Securities.
