Pinoy Investor

Ourdated Info

2014-09-27T10:24:00.001+08:00

The other day I noticed that some of the mutual fund and UITF posts on the blog were outdated.

The good thing is that minimum holding periods and minimum investment amounts have gone down since I wrote those posts. That means investing is becoming more affordable and convenient. Unfortunately that also means that the new investors may be getting inaccurate information.

I'm not sure how long it will take to update everything but I'll put a note on top of each updated post indicating when it was last updated.

Know Your Cut-off Time!

2014-09-10T21:43:00.000+08:00

I just wanted to write a quick post about transaction cut-off times and settlement periods. It seems that this topic isn't often discussed in blog posts and articles about investment funds. I think there are two reasons for this:

1. It's just not sexy. People would rather read about gains and losses than waiting times.

2. Mutual funds and UITFs aren't really suitable for day-trading. Investors who want to be able to invest and redeem quickly are better off buying stocks or ETF shares directly. Thus timing is usually not that important.

Still, it's important to know these details about your investments. You might need to redeem funds quickly, or have cash available by a certain date. Issuing a redemption order after the cut-off time means having the transaction processed the next banking day with a corresponding delay to the actual settlement date (the date funds are credited to your bank account).

Go to your fund's website or contact your agent to get the information. Then make a note of it and keep it (electronically or physically) wherever you keep your investment records. It's a small tip that may pay off in the future.

Philippine Index Funds Part 2: Philequity and First Metro

2014-08-08T19:56:00.001+08:00

Let's continue our review of index funds. If you missed it you can check out Part 1.

This post features Philequity and First Metro. First up is Philequity:

PSE Index Fund
Fund Type: Mutual Fund
Index Tracked: Philippine Stock Exchange Index
Minimum Initial Investment: P200000
Minimum Transaction: P50000
Redemption Fee:2% in the first year, 1.5% in the second year
Annual Fee:1.5%
Tracking Error: No data

Steep investment requirements, high fees. Not very attractive.

Next is First Metro. This fund was actually covered in a previous post so I'll just put a summary below.

First Metro ETF
Fund Type: ETF
Index Tracked: Philippine Stock Exchange Index
Minimum Initial Investment: (Multiple of 10 shares) x NAVPU (P111.00 as of 8/8/2014)
Minimum Transaction: Same as above
Transaction Fees: Broker/trading platform dependent
Annual Fee: < 2%
Tracking Error: 0.05%

That's it for this post.

Philippine Index Funds Part 1: BPI

2014-07-20T16:44:00.001+08:00

In he previous post we took a look at index funds: what they are and their pros and cons. There are a number of index funds available to Filipino investors. Let's start with BPI's offerings.

First up is a bond index fund: the ABF Philippines Bond Index Fund. This is a bit different from the examples in the last post in that it tracks a bond index instead of an equity index. It tracks the iBoxx Philippines Index. Here's the key information as of the time of writing:

ABF Philippines Bond Index Fund
Fund Type: UITF
Index Tracked: iBoxx Philippines Index
Minimum Initial Investment: P10000
Minimum Transaction: P1000
Minimum Holding Period: None
Annual Fee: ~ 0.349%
Tracking Error (from June 2012): ~ 0.2%

Explanatory Memo
Performance Report for June 2014

The fees and tracking error are quite low, which is a good thing.

Next is an equity index fund:

BPI Philippine Equity Index Fund
Fund Type: UITF
Index Tracked: Philippine Stock Exchange Index
Minimum Initial Investment: P10000
Minimum Transaction: P1000
Minimum Holding Period: None
Annual Fee: ~ 1.5%
Tracking Error (from June 2012): ~ 2.27%

Explanatory Memo
Performance Report for June 2014

The fee isn't as low as what I'd expect of an index fund. The tracking error is much higher than that of the bond index fund above, but I'm not sure if it's too high or okay.

Next is another equity index fund, the ALFM Philippine Stock Index Fund. This differs from the other equity fund in that it is a mutual fund managed by BPI Investment Management Inc., a subsidiary of BPI. As such it is regulated under the SEC instead of the BSP.

ALFM Philippine Stock Index Fund
Fund Type: MF
Index Tracked: Philippine Stock Exchange Index
Minimum Initial Investment: P5000
Minimum Transaction: P1000
Minimum Holding Period: 180 days
Annual Fee: ~ 1.5%
Early Redemption Fee: 1% of the redemption amount
Tracking Error (from June 2012): ~ 0.88%

Prospectus
Performance Report for June 2014

I'm not a big fan of minimum holding periods and early exit fees but 180 days is short compared to some mutual funds. Invest only if you have an emergency fund already setup. The annual fee is comparable to the other equity index fund above, but the tracking error is much better.

Lastly there's the Philippine Dollar Bond Index fund:

Philippine Dollar Bond Index Fund
Fund Type: UITF
Index Tracked: JP Morgan Asia Credit Index – Philippines
Minimum Initial Investment: $500
Minimum Transaction: $200
Minimum Holding Period: None
Annual Fee: ~ 0.267%
Tracking Error (3-year): ~ 1.06%

Explanatory Memo
Performance Report for June 2014

The investment and transaction amounts required are pretty high. The fees are quite low and the tracking error isn't that bad.

That's all for BPI. Next on the index fund list is Philequity and First Metro.

Index Funds

2014-06-28T12:20:00.004+08:00

Roughly speaking an index measures the performance of a segment certain market, for example the stock market. In the Philippines when people talk about the stock market going up or down, they usually mean the PSEI (Philippine Stock Exchange Index). The composition of the index is not permanent. From time to time stocks are added and removed from the index.

An index fund attempts to track the performance of an index. When the index goes up or down, the fund NAVPS/NAVPU should also go up or down by the same percentage.

Who should invest in index funds? Investors who:

believe that over long time periods the index tends to go up. This is backed-up by historical data, but of course "past performance is not a guarantee of future returns".

want to invest in the index but don't have enough cash to invest directly in stocks that make up the index. Replicating the index by buying shares in individual companies is quite expensive. Investing in a fund allows the investor to invest in the index for a relatively low amount.

want to invest in the index but don't have the time or inclination to manage a portfolio of stocks. When the index composition changes, the investor should buy and sell shares to mirror the index's new composition. Investing in a fund allows the investor to "set-and-forget", in other words to invest and let the fund do the rest.

want to invest in an equity fund with lower fees. Theoretically, an index fund should be passively-managed and have a lower annual fee than actively managed funds.

Who should not invest in index funds? Investors who:

believe they can outperform the market. Doing this is very difficult over a long time period.

want control over which stocks to buy or sell.

want control over when to buy or sell.

What should investors look for in an index mutual fund?

Accurate index tracking - if an fund doesn't accurately track the index's movements, it's not an index fund. The deviation from the index is called the tracking error, the lower the better.

Low fees - there's no reason for an index fund to charge a high fee

In the next posts we'll take a look at the equity index funds available in the Philippines:

Index Funds Part 1
Index Funds Part 2

First Metro ETF

2014-06-12T21:32:00.002+08:00

In the last post I wrote about exchange-traded funds. This post will be about the first (and as far as I can tell, the only) ETF in the Philippines: First Metro Philippine Equity Exchange-Traded Fund (FMETF).

The Fund aims to track the performance of the Philippine Stock Exchange Composite Index (PSEI). This means, roughly, that it will invest in the stocks that comprise the PSEI, in the same weights.

A listing of the PSEI component securities can be found on the PSE website.

Due to its nature as an index fund, and according to the prospectus itself, the Fund is passively-managed. Theoretically, this should mean lower operating costs and thus higher returns for the investor. However, the expense ratio listed for the fund is =< 2%. 2% is pretty high for an index fund. In other countries annual fees for index funds are usually below 1%. In comparison, BPI's equity index funds charge 1.5%.

On the other hand, the 2% listed is a maximum. The actual amount may be lower. Unfortunately I couldn't find any information about the actual expense ratio. I will update this post when I do.

Another thing to look at when reviewing an index fund is the tracking error. Tracking error is the difference between an index fund's performance and the index's own performance. Tracking error should be as close to 0% as possible. The currently listed tracking error for FMETF is 0.09% which is a lot better than the ~1% achieved by BPI's index funds.

FMETF is interesting if you want to track the PSEI and at the same time be able to trade fund shares like any other stock. However, it would be a good idea to research the actual expense ratio (roughly equivalent to mutual fund/UITF annual fee) and broker's fees first.

Exchange Traded Funds

2014-06-07T11:52:00.001+08:00

Some months ago I came across a news article discussing the first exchange-traded funds (ETFs) available to local investors. At the time I wasn't actively blogging (or even investing) so I didn't take too much notice. I think now would be a good time to educate myself by reading up on ETFs and writing a blog post.

From Investopedia:

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

Much like a mutual fund or a UITF an ETF pools investors' money and invests it in assets such as stocks or bonds. The main difference is that ETF shares (or units) may be bought or sold throughout the day on an exchange (such as the Philippine Stock Exchange).

The ETF share price behaves just like other stock prices, varying as they are bought and sold. Thus investors are able to buy and sell shares at prices other than the NAVPS, unlike mutual funds and UITFs. However, investors pay broker's fees for every trade (purchase or sale) of ETF shares.

Investors in ETFs may also use the same strategies stock traders do, such as short-selling and margin trading (see notes below), along with all the potential rewards and risks of those strategies.

Since ETFs track indices (such as the PSEI), the fund itself doesn't need to buy or sell assets often, unless the composition of the index changes. Theoretically, this should translate to lower operational costs and lower fees for investors.

So, the most important question: who should invest in ETFs?

Investors who:

want the advantages of index funds (post to come later)
want the flexibility of being able to sell ETF shares like stocks (more at Stocks vs. Equity Funds)
don't plan on cost-averaging with small amounts. Broker's fees will quickly eat into smaller investment amounts

That's it for this now. In the next post, we'll take a look at First Metro's ETF.

Update: Post about First Metro Philippine Equity ETF is now up.

Notes:

Short-selling: selling shares not owned by the seller.
Margin trading: borrowing money from a broker to purchase shares.

More at Investopedia:

ETFs
Short-selling
Margin-trading

BPI Regular Subscription Plan

2014-05-09T21:33:00.001+08:00

If you've been reading this blog or other resources about personal finance you're probably familiar with cost averaging. If not, you can read my initial post about it here and another post with a detailed example here.

One of the challenges of cost-averaging is finding the time and effort to do it regularly. (It's a bit like blogging that way.) Fortunately several banks and financial institutions have introduced mechanisms to make cost-averaging easier.

One of these is BPI's Regular Subscription Plan. It's a program that allows investors to set an amount and frequency for periodic investments. Of course this assumes that 1) you have a BPI bank account and 2) you've already invested in at least one of their funds.

Basically, you tell BPI how much and how often you want to invest and the fund you want to invest in then 'forget' about it. The amount should meet the minimum required, which varies from fund to fund. The frequency may be monthly or quarterly. You also specify when the plan should start and end. For example, you can set your plan to invest P2500 quarterly in their Short-Term fund from June 12, 2014 to June 12, 2024.

You can enroll in a Regular Subscription Plan through BPI branches or online on http://www.bpiexpressonline.com/. If you invest or plan to invest in BPI's funds I think this is a great way to do cost-averaging. You can learn more by reading the offical FAQs.

UITF vs. Mutual Funds, Revisited

2014-04-06T20:34:00.001+08:00

A few years back I wrote a post comparing UITFs and Mutual Funds here.

I think it's time to update that comparison.
Here's a summary of the changes from the last article:

UITF subsequent investment amount can be as low as P1000
some UITFs now allow partial redemption
Mutual fund website URL has changed

Verdict is still the same: UITFs win. The combination of low fees, short holding periods, and now the ability to invest and redeem partial amounts make UITFs a clear winner over mutual funds.
Still, don't count mutual funds out of your diversification strategy.

Here's the complete comparison. Asterisks denote items that have been updated:

1. Government Regulatory Agency:

UITFs - Bangko Sentral ng Pilipinas
Mutual Funds - Securities and Exchange Commission
Winner: tie

2. Issuing Companies:

UITFs - Banks
Mutual Funds - Insurance companies, investment companies
Winner: tie

3. Fund Types:

Both offer the essentially the same fund types: money market, bond, balanced, equity.
Winner: tie

4. Risk:

Since both have the same types of investments the risks are the same.
Winner: tie

5. Minimum Investment Amount:

UITFs - as low as P10,000
Mutual Funds - as low as P5,000
Winner: Mutual Funds

6. Subsequent Investment Amount*:

UITFs - as low as P1,000
Mutual Funds - as low as P1,000
Winner: tie

7. Front-end Sales Load:

UITFs - None
Mutual Funds - As low as 0%
Winner: UITFs

8. Holding Period:

UITFs - As low as 0 days
Mutual Funds - As low as 0 days if front-end load is charged
Winner: UITFs

9. Back-end Sales Load:

UITFs - None, if redemption is made after the holding period
Mutual Funds - As low as 0%, if redemption is made after the holding period
Winner: tie

10. Partial Redemption*:

UITFs - Allowed
Mutual Funds - Allowed
Winner: tie

11. Management Fee:

UITFs - As low as 0.25%
Mutual Funds - As low as 1%
Winner: UITFs

12. Website*:

UITFs - uitf.com.ph - has a lot of information
Mutual Funds - pifa.com.ph - not much information aside from NAVPS performance
Winner: UITFs

Rewards Programs

2014-03-29T14:59:00.004+08:00

A rewards program can be a good way to save money. You can even think of it as making a bit of extra money.
I'm enrolled in the rewards program of a certain bank. Spending at certain establishments earns me points at the rate of 1 point for every P400 spent. I can then spend those points with 1 point being equivalent to P1.
Now, getting P1 back for every P400 spent doesn't save siginificant amounts, but every little bit counts. Also, there are other ways I earn points. The bank awards a certain number of points monthly, depending on the account balance. For money (such as emergency funds) that needs to be put in low-risk vehicles a savings account with a rewards program might be a good choice.
Another way I earn points is through bill payments. I find this is a particularly nice way to earn points since

I'm going to pay the bills anyway, points or no points.
Points are awarded at a higher rate than for other payments.

You might be wondering if the rewards program is worth it. In my case, it is. Having the rewards card hasn't really changed my buying patterns: I buy the same stuff as I would without it. So what's changed? Well, now, because I can buy stuff with points, I essentially get stuff for free. In the past couple of years most of the light bulb replacements (3 or 4 LED-types) I've bought have been paid for with points. Not awesome but pretty satisfying.
There are of course, things to look out for when participating in a rewards program. These will make the difference between saving/earning and losing money on the program.

Check the fees. If fees eat up most (or more!) of the points rebates, that's a losing proposition.
Check prices in participating establishments. Switching stores just to earn points doesn't make sense if the new store has higher prices. Same argument for switching to a store that isn't conveniently located.
Don't fall into the trap of spending more just to get points.

Hope this helps.

New investment: BPI Short Term Fund

2014-03-13T01:10:00.001+08:00

New post, hooray!

After a couple of years I was finally able to invest again. This time I decided to try BPIs UITF offerings. I needed a fund where I could park money relatively safely. I say relatively since it isn't a bank deposit and therefore isn't insured by the PDIC.

I chose the BPI Short Term Fund. According to the description

It is suitable for investors with a moderately conservative risk profile and those with short-term liquidity requirements.

which I interpret to mean "it's good for money you can't afford to lose (money you might need in the near future)". It also means the gains are going to be made very slowly. Some people would say that the combination of BPIs conservatism and a conservative fund means that it's going to be very very slow. That's okay though, this fund is for building slowly. I plan on investing in more aggressive funds in the near future (I hope).

What I like about this fund:

Low initial participation: P10,000
Low additional participation: P1,000
No minimum holding period
Low fee: 0.5% per annum

Mutual Fund Investment Update, July 2012

2012-07-14T20:06:00.001+08:00

Wow, first blog post this year! I hope I still have readers left. A little recap: I started investing in mutual funds mid-2010. My plan was to invest P1000 each month. Unfortunately, I haven't been able to do that.
I'm pretty happy with the results so far, but keep in mind these are just paper gains. I hope I can re-start investing P1000 a month soon, but I'll probably choose a UITF this time. Check out that discussion: UITFs vs. Mutual Funds

Total Amount Invested:

P13000

Number of shares owned:

5772

NAVPS:

P3.1966

Total Value of Shares Owned:

P18,450.7752

Total time since initial investment:

Approximately twenty-five months

June 2011 update

Banco Filipino Update

2011-08-16T00:43:00.000+08:00

I've been really busy the past few months (notice the sharp drop in blog post rate) but I was finally able to file a claim with the PDIC this month. I'd actually had the documents ready for some months, I just didn't have the time. I spent a little less than an hour at the PDIC office. Most of that time was spent waiting for my number to be called. The actual filing took less than ten minutes, because all my documents were in order. I found the PDIC staff to be pleasant and courteous. There were a lot of other people filing claims, I don't know how many of them were Banco Filipino depositors.
Here are a few tips for Banco Filipino account holders wo have yet to file their claims:
1. Download the form here: PDIC Claim Form

2. Read the instructions on the form carefully and fill in the form. Instructions are also available at the PDIC website: How to File Claims

3. Make sure to bring all required original documents and photocopies.

4. Bring three valid IDs if you have them. One for the building pass, and two to present to the PDIC officer (I think they only need one but better to be safe.). If you only have one ID you might be allowed to retrieve your ID from the building guard.

The PDIC office is located at the 4th floor of the SSS building, Rufino (formerly Herrera) corner Ayala.

Emergency Fund

2011-07-11T22:23:00.000+08:00

I need to build my emergency fund back up before I start investing again. Various websites recommend from three to six months of living expenses. Right now I'm nowhere near that. So why not mix the two (investment and emergency fund) by building up an emergency fund in a profitable investment vehicle?
I'm guessing there are probably a lot of people who do this, but it doesn't suit me. I subscribe to the conventional line of thinking that says emergency funds should be placed in very low-risk vehicles like bank savings accounts. Even a slight, short-term dip at the wrong time could be disastrous.
Another concern is liquidity. In an emergency quick and easy access to cash is important. Even a one-week holding period would be too long. An ATM account, on the other hand, earns virtually no interest but is easily accessible.
It may seem like a lost opportunity to put three to six months worth of living expenses in an account that earns very little, but the security of having ready cash more than makes up for it.
You might decide to keep your emergency savings smaller or larger depending on your circumstances and preferences. The important thing is to get it set-up as quickly as you reasonably can.

Fun Stats

2011-07-05T00:50:00.000+08:00

Today's post is not investment related. I'd like to share some stats about the blog. Think of it as a meta-post.

The top five countries by page views are:
1. the Philippines (no surprise there)
2. the US
3. Singapore
4. UAE
5. Saudi Arabia

The three most popular browsers are:
1. Firefox - 45%
2. Chrome - 23%
3. Internet Explorer - 21%

Page views by OS:
1. Windows - 90%
2. Mac - 4%
3. Other Unix (BSD? HP-UX? Misidentified Linux?) - 1%
4. Linux - 1%
5. Others (iOS, HTC, Nokia) < 1%

The five most popular posts are:
1. MF Roundup 1
2. UITFs vs. MFs
3. MF Roundup 3
4. MFs vs. Direct Stock Investment
5. UITFs

Thanks for reading!

UITF Roundup 3: Metrobank

2011-07-01T00:16:00.000+08:00

Third in our UITF series is Metrobank. You might have noticed there isn't an "Early Redemption Fee" column in the table below. That's because the fee is uniform across all their funds. They charge 50% of the income on the redeemed amount. So if you redeem early and profit by P2000, they take P1000 as the early redemption fee. The holding periods aren't too long so this shouldn't be an issue for most investors.
Aside from the Trust Fee listed below Metrobank also charges a Custodian Fee. This is 0.015% p.a. for peso funds and 0.0175% p.a. for dollar funds.

Fund Type

Minimum Investment/ Subsequent Investment

Holding Period

Trust Fee*

Money Market

P50,000 / P25,000

7 days

1% p.a.

Max-3 Bond Fund

P50,000 / P25,000

30 days

1% p.a.

Max-5 Bond Fund

P50,000 / P25,000

30 days

1.5% p.a.

Invest Plus

P5,000 /
P1,500 monthly

90 days

2.5% p.a.

Balanced Fund

P25,000 / P25,000

90 days

2% p.a.

Equity Fund

P25,000 / P25,000

90 days

2% p.a.

$ Money Market Fund

$2000 / $1000

45 days

1% p.a.

$ Max-3 Bond Fund

$2000 / $1000

90 days

1.5% p.a.

$ Max-5 Bond Fund

$2000 / $1000

90 days

1.5% p.a.

Main Office Phone: 8700-700
Website: Metrobank UITFs

UITF Roundup 2: BPI

2011-06-25T00:27:00.000+08:00

Here's the second installment of the UITF roundup. Today's featured bank is Bank of the Philippine Islands.
BPI offers a Regular Subscription Plan that allows investors to make regular purchases of units or shares. Purchases may be made on a monthly or a quarterly basis. This makes cost averaging a lot more convenient. Read more.
*Some of the funds may charge minimal management fees, custodianship fees, and external audit fees aside from the trust fees. The fees listed below under the "Annual Fee" column are the trust fees. Be sure to read the funds' Explanatory Memo and Latest Fund Performance report (links provided below the fund name).

Fund Type

Minimum Investment/ Subsequent Investment

Holding Period

Early Exit Fee

Annual Fee*

Short Term Fund (Money Market)

P10,000/
P1,000

7 days

0.25%

0.75% p.a.

Explanatory Memo
May 2011 Performance Report

Premium Bond Fund

P10,000/
P1,000

90 days

0.25%

1.5% p.a.

Explanatory Memo
May 2011 Performance Report

ABF Philippines
Bond Index Fund

P10,000/
P1,000

90 days

0.08% p.a.

Explanatory Memo
May 2011 Performance Report

Balanced Fund

P10,000/
P1,000

90 days

0.50%

1.5% p.a.

Explanatory Memo
May 2011 Performance Report

Equity Fund

P10,000/
P1,000

90 days

0.50%

1.5% p.a.

Explanatory Memo
May 2011 Performance Report

International
Fund Plus

$500/
$200

30 days

0.25%

0.75% p.a.

Explanatory Memo
May 2011 Performance Report

Global Philippine Fund

$500/
$200

30 days

0.25%

1% p.a.

Explanatory Memo
May 2011 Performance Report

Philippine Dollar Bond Index Fund

$500/
$200

90 days

0.25%

0.25% p.a.

Explanatory Memo
May 2011 Performance Report

Global Equity Fund

$500/
$200

90 days

1.5% p.a.

Explanatory Memo
May 2011 Performance Report

Contact Numbers, Wealth Management Division: 845-5295, 816-9092
Website: BPI Asset Management Products and Services

Roundup 1: BDO

Mutual Fund Investment Update June 2011

2011-06-16T09:23:00.000+08:00

Hi again. Regular readers may have noticed a decline in posting frequency. I've had a lot going on lately, but the blog isn't going away any time soon. Today I'll post my mutual fund update.
As you can see I haven't been making my P1000 regular investment. I'm now behind by four months.

Total Amount Invested:

P13000

Number of shares owned:

5772

NAVPS:

P2.6656

Total Value of Shares Owned:

P15,385.8432

Total time since initial investment:

Approximately twelve months

May 2011 update

UITF Roundup 1: BDO

2011-06-05T06:39:00.000+08:00

As promised here's the roundup of UITFs. We'll start with Banco de Oro. I made a table based on the information on their website:

Fund Type

Minimum Investment

Holding Period

Early Exit Fee

Annual Fee

Peso Money Market

P100000

none

0.50% p.a.

Peso Bond

P100,000

30 days

0.50%

0.75% p.a.

Peso Government Securities

P100,000

30 days

0.50%

1% p.a.

Peso Fixed Income

P10,000

30 days

0.50%

1% p.a.

Peso Balanced

P10,000

30 days

0.50%

1% p.a.

Peso Equity

P10,000

30 days

1% p.a.

Dollar Money Market

$2000

45 days

0.50%

0.50% p.a.

Dollar Bond

$2000

45 days

0.50%

0.75% p.a.

Dollar Medium-Term Bond

$2000

45 days

1% p.a.

Contact Numbers: Trunkline: 840-7000, Trust Department: 878-4271, 878-4217, 878-4218

The minimum investment amounts are higher than in mutual funds, but there are no sales loads and the annual fees are lower. These are significant advantages that will reflect on long-term performance.
Since each subsequent investment is treated as a new investment, the higher minimum investments might put off those who want to invest small sums regularly. The easy investment plan allows investors to invest as little as P1000 per month. This is invested at the NAVPU for that day. When the total investment amount reaches the minimum (for example P10,000 for the equity fund), the investor is then issued the investment certificate. In this way it is possible to do cost averaging. Here's a link to their money market fund. There are links to the other funds on the right side of that page.
Related reading:
UITFs
UITFs vs. Mutual Funds

Paying for Investment Advice

2011-05-22T17:38:00.000+08:00

Is it a good idea to pay for investment advice? In the past year I've seen a lot of advertisements, e-mails, and blog and forum posts offering investment advice for a fee. With all the free information available online, what kind of advice would be worth paying for?
I am by nature frugal so my view is free beats paid. All the information I've gathered so far has been free: from websites, forum discussions, and old-fashioned phone calls. I understand that not everyone has the time or inclination to do their own research and that some people might be willing to pay for advice.
Here are some things to look out for to make sure you get your money's worth:

The Adviser

Make sure they are who they say they are.
1. Check their licenses and other qualifications.
2. Ask for and cross-check references like employers and clients.
3. Look out for conflicts of interest.
4. Don't be fooled by displays of wealth and success.

The Advice

The advice should be
1. Useful - you should receive, specific, actionable advice. The advice should not be so vague and general as to be useless.
2. Accurate - there's no point in paying for advice if it can't be trusted to be correct.
3. Legal - stay away from shady deals, insider trading, and anyone who would advise such. It's wrong and just not worth it.
4. Worth the price - this is subjective. Some rules of thumb are that you should make more money from the advice than what you're paying for, and the advice isn't available anywhere else for a lower price.

I'll do a future post about free advice.

PERA to the People

2011-05-18T19:23:00.000+08:00

A few weeks ago I posted news about the approval of the implementing rules of the REIT law. There's more good news, the PERA (Personal Equity and Retirement Account) Act revenue rules are going to be released soon. The PERA Act (Republic Act 9505) aims to encourage Filipinos to save for retirement. Here's a PDF of the full text.

Some of the interesting features are:
1. Employers may choose (it is not required) to make contributions to employees' PERA. They are still required to make SSS contributions.
2. Those who avail of the PERA receive a tax credit equivalent to 5% of their PERA contribution. Save money and save on taxes.
3. Income from PERA is tax-exempt.

I hope the number of investment options of common Filipinos keeps growing.

Mutual Fund Investment Update May 2011

2011-05-16T11:06:00.000+08:00

Hello, nice to be back posting again.
Not much is going on with my investments, the NAVPS has been stuck at 2.7xxx for some time now. If it hits 3.0 I'll probably take profits by shifting my investment from equities to bonds or money market. If on the other hand it drops to 2.3 or 2.4 I'll put in more money.

Total Amount Invested:

P13000

Number of shares owned:

5772

NAVPS:

P2.7455

Total Value of Shares Owned:

P15,847.026

Total time since initial investment:

Approximately eleven months

April 2011 update

New implementing rules on REIT law approved

2011-05-02T12:11:00.000+08:00

The Real Estate Investment Trust Act was passed in December 2009, but the lack of implementing rules have prevented the establishment of REIT companies. Thus investors have not been able to take advantage of this alternative investment.

We are now one step closer after government regulators came to a compromise:
REIT rules
I have not researched much on REITs, but I hope they become available soon. This will allow small investors to invest in the real property sector, which is dominated by large corporations and wealthy individuals.
Here are some primers on REITs:
PSE REIT Primer
KPMG.com REIT Primer

Mutual Fund Company Roundup 4

2011-04-28T17:11:00.000+08:00

Here's the fourth installment in the mutual fund company series. Today's featured company is ATR KimEng.

ATR KimEng.

Fund types offered:

Bond Fund

Equity Fund

Balanced Fund

Money Market Fund

Asian Equity Fund (dollar denominated)

Minimum initial investment:

P5000 for Equity, Balanced and Money Market fund (exclusive of sales charge)

$2,000 for Asia Equity fund (exclusive of sales charge)

Minimum subsequent investment:

P1000 for Equity, Balanced and Money Market fund (exclusive of sales charge)

$500 for Asian Equity fund (exclusive of sales charge)

Front-end Sales load:

Up to 2% for Balanced and Equity fund

0% for Money Market fund

Back-end Sales load:

Up to 2% for Balanced and Equity fund

Annual Fee

Website:

ATR KimEng

E-mail:

ird@atram.com.ph

Phone Number:

8481381

Mutual Fund Company Roundup 1: Sunlife and FAMI
Mutual Fund Company Roundup 2: Philam
Mutual Fund Company Roundup 3: Philequity

Philippine Stock Indices to Change Composition

2011-04-21T21:42:00.000+08:00

The PSE index and sector indices are changing composition on May 9. A regular review of trading activity is done every six months. A change in the indices may follow each review.

Stock investors who wish to emulate the PSE index or other indices will need to make corresponding changes to their portfolio. Equity mutual fund and UITF investors may leave the decision-making to the fund managers.

Story on Businessworld