The deadly SARS outbreak is having a serious effect on the fund industry in Asia. According to a report by Reuters, the business, typically dependant on face-to-face contact in the region, has slowed significantly.
One such example is JF Funds Ltd., one of Asias top fund companies with $31 billion in assets and a division of JPMorgan Flemming Asset Management. Company officials report a 20% drop in customer traffic at the center and have cancelled most of its investor workshops as the SARS virus keeps people at home.
To counteract this, fund houses are using other methods such as the Internet, phone and video conferencing to communicate with clients. However, this has its drawbacks.
According to JF Funds regional director for the Asia Pacific Janus Howcy Yeung, "Is it possible to buy a car over the net? Yes, but is it as nice as going to the dealership and doing a test drive? Obviously the face-to-face contact, the in-person meetings make a huge difference."
Yet, investors seem to be taking to remote methods of buying funds. "Surprisingly, for our call center, incoming calls have increased by almost 40%. So, theres a trade-off," said Bonnie Tse, head of direct sales at JF Funds.
Web usage in most of Asia is low compared with the West, and retail investors prefer to meet sales staff or product distributors before investing in any fund product. But in the face of the SARS danger, Web usage is up.
"I like discussing [investments] with officials. I dont like talking on the phone," said Victor, a customer glancing through an investment brochure at an HSBC branch in the Taikoo Shing shopping center.
Thats why the Severe Acute Respiratory Syndrome makes for bad business.
"When we talk to the distributors, we find that generally business has been rather slow because of SARS," said Sally Wong, executive director of Hong Kong Investment Funds Association (HKIFA). "SARS has dampened investor sentiment."