00:00When it comes to the retail market here right now, whether it's leveraged ETFs and really kind of buying in
00:04on this AI trade in North Asia, what are flows telling you now?
00:08Yeah, I mean, you know, we've always believed that retail is a force to reckon with.
00:12And if anything, you know, the movements of the last year or two have actually shown that, right?
00:17Of course, last year, the key theme around AI, around tech, now we are seeing like 7709.
00:23It's consistently on the top five ETFs that we are seeing in Hong Kong.
00:26So definitely, you know, they are obviously a lot more indexed on AI and tech.
00:31The only little caveat that I bring is that it's bringing some sort of concentration risks, which we can talk
00:35more about.
00:36But definitely the activity is at all time highs, quarter on quarter, you know, new trading records on our sites.
00:42And yeah, they're here to stay.
00:44Tell us a bit about the concentration risk.
00:46Yeah. So if you think about it, right, like take Cosby, right?
00:49You've got like roughly 40, 45 percent on the index now and a couple of names.
00:52Take Taiwan, you've got 40 percent in one name.
00:54U.S. also is like, you know, 10 names at like 40-odd percent.
00:59So the thing was, people always thought, hey, let me track the index because that is passive, long-term, diversified,
01:04you know, investing.
01:05And the question is, is it really diversified?
01:08And I think that's something that, you know, we have been talking a little bit more about.
01:12And we are seeing customers also, to some extent, act on it.
01:16Not everyone because, hey, it's doing well and it's where the direction is.
01:18But a simple checkpoint is our non-U.S. trading activity is up to X, right, as a percentage weightage.
01:24But, of course, the key driver does remain in the U.S. markets and, of course, you know, some of
01:28these leverage names, as you're seeing.
01:31Drew, given the volatility in the markets also, we've been seeing this pick up in active investing and what seems
01:37like an explosion in trading.
01:39Is that impacting the business growth?
01:43Yeah, it is.
01:44And I would say it is positively, right?
01:46I mean, going back on that whole aspect of the concentration risk, I think what we are seeing is that
01:50just the classic let's buy an SVY or just BYVO, that alone doesn't do it, right?
01:55And we actually launched one of our active, you know, products, right, which was in partnership with JP Morgan.
02:00And if you saw the performance in the last few months, it has outperformed by 3% or 4%
02:04because people do realize that, hey, an element of this activeness is actually required.
02:09So, yeah, the short answer is definitely.
02:11And I think what's really interesting is because the retail has been through a few waves, we're talking about the
02:16waves that happened in 21, 22, the ups and downs.
02:19I think they're a lot more savvy than before.
02:21But still, of course, you know, the Elon factor remains strong in some cases and that doesn't change, right?
02:27The active ETF strategy with JP Morgan is interesting.
02:30What does it tell you about, you know, SIFE's product pipeline?
02:34Are you pivoting more towards some of these actively managed sort of offerings now?
02:38Yeah, I think our goal has always been around what we say the three A's, right, like access, advice, affordability,
02:44right?
02:45So I think as people were seeing this concentration risk, there was a demand.
02:49Could I actually have a bit more of a managed component?
02:52So the way how I see it is that we will predominantly still see passive investing.
02:56The diversification needs to be better, absolutely.
02:58But components of it will start going into active, especially in times like this, right?
03:03Because if you're talking these major markets in the world, essentially run by a few names, you don't know what
03:08you're really buying into.
03:09You saw recently with the IPO inclusion, right?
03:11What you bought into might not be what you're still into in some ways.
03:14Right, right.
03:16Yeah.
03:17Drew, can you talk to us as well about what fees are like?
03:20What are you expecting in terms of revenues?
03:22And what are the chances of growing margins?
03:27What's the outlook there?
03:29Yeah, you mean for us as a business?
03:32So I would say that for us, like, yeah.
03:35So the good thing is that because we've been a very tech-enabled platform, always kind of build our tech
03:40predominantly in-house,
03:42our gross margins are actually in mid-90s.
03:44And that would remain.
03:46And, in fact, if anything, it further accelerates.
03:48Furthermore, recently, as we acquired an ASX listed platform, Self Health, in Australia, that also now allows us to bring
03:55in synergies.
03:56So quarter on quarter for the last, I would say now almost six quarters running, we have been hitting, like,
04:01new highs.
04:02And I think as the retail interest keeps on increasing and retail becomes a lot more, I guess, involved,
04:08and this trend that we are seeing saving to investing, right, which is obviously a key theme we talk a
04:12lot about in markets such as Australia,
04:14such as, you know, Singapore, and even to some extent in Hong Kong, we only further see that trend accelerating
04:19over time.
04:19Yeah, we're seeing sort of the wealth management market.
04:21It's diverging to two camps, right?
04:23Very AI-driven, technologically driven, and then there's a traditional face-to-face sort of wealth management.
04:28Yeah.
04:29Where do you sit?
04:30Where does SAIFE sit?
04:31And how do you compete with some of these major banks out there that are offering more digital wealth options?
04:35No, absolutely.
04:35And I think you make a very good point around what really AI means.
04:39And I actually think we obviously were a digital first and remain digital, but we are skewing to AI a
04:45lot more than maybe some of these other, you know, platforms because we can, right?
04:50About 87% of all our code written is now written using AI.
04:54And the kind of features that we are launching now for our customers, which were just not available, a simple
04:59example is today, and it's live in beta now,
05:02you can go and have a search where you can say, give me S&P minus Elon, and it'll give
05:08you a basket of stocks.
05:09Now, these are the kind of things, when I was a trader back at UBS, we would offer to people
05:13like, you know, for hundreds of millions of dollars and pretty lumpy fees.
05:16Yeah.
05:16So somebody now with $1,000, $2,000 can get this, even though I think the searches are more like
05:21S&P, Elon, plus, plus.
05:22But the premise remains that this kind of stuff, or Trump China visit, or, you know, U.S. rate hike,
05:28a very simple query and a personalized view that can be exposed.
05:32So we see a huge inclination towards here.
05:35And because we've always said advisory needs to be scalable and it needs to be personalized, I think what AI
05:42will enable is for that.
05:43So, yes, so we are definitely leaning in out there.
05:45So, yes, so we are definitely leaning in out there.
