Mutual Funds - Thread # 3

[leelou]

^ top performing fund sya and since BPI, very convenient for me to place there  temporary lang naman sya unavailable, mag-offer naman sila ulit kaya hintayin ko na lang kasi ayaw ko na mag-open pa ng accounts sa iba. i have FAMI na and BDO where i regularly invest plus sa Philam pa pala pero 10K lang yun at di pa nasundan. nahiya lang ako actually sa friend na agent dun kaya ako kumuha. he was actually offering me insurance pero sabi ko MF na lang  so masyadong maraming companies na sila considering into stocks na rin ako thru COL

with regard to equity versus index fund, i'll just quote na lang this which was just shared in a yahoogroup na member ako: "better to invest in index fund kasi 80% of fund managers do not outperform the PSE. so mas malaki daw chance that you will earn more sa index fund."

di ba we always read it naman na the best time to invest is NOW so if you have money that you won't be needing in the next 5 years the least, tapos mayroon ka naman emergency fund, go invest in equity or index fund. pero kung 3 years, pwede sa balanced and money market or bond fund if less than 3 years

[ikaela]

^Okay, thank you. Magresearch nga ako more about index fund, baka dun na nga ang next placement ko. Kaso nga lang parang pang-long-term lang ang index funds. Might have to keep my money in conservative funds in this down market.

[mxherr5]

@leelou, why not invest in BPI's Peso Equity Index Fund then?
BPI made this new index fund(UITF) because I don't think
SEC is going to finish processing the request for additional shares
for PSIF any time soon.

[mxherr5]

with regard to equity versus index fund, i'll just quote na lang this which was just shared in a yahoogroup na member ako: "better to invest in index fund kasi 80% of fund managers do not outperform the PSE. so mas malaki daw chance that you will earn more sa index fund."

Did this guy share some hard data to back up his claims?
What time period are we talking about here?
Over a 1 year period? 3 years? 5 years? etc?

If its over a 20 year period then only one fund is that old,
Philequity and man it beat the index so bad it isn't funny.

On the other hand, out of the 10 equity funds I'm tracking
only 3 funds(30%) are lagging behind the index over a 5 year period.

4 funds are lagging behind the index over a 3 year period

And all of those laggards are BPI Equity funds.
BPI really sucks on equity funds 

[freelancer_babe]

Anyone who is into Philam Strategic Fund?

Walang exit fees ito, right? Just entry fees charged? Ano pa ang ibang charges nito?

Ilang percentage ang entry fee para sa P10k investment?

[mxherr5]

Where did you get that idea  mutual funds are so very fee laden
compared to UITFs

You can check http://www.philamfunds.com.ph/products1.php
and it shows that there's a holding period.
Not much sense to implement a holding period if there's no penalty
for breaking it right?

You can find the details for the exit fee in the prospectus on page 14
http://www.philamfunds.com.ph/downloads/PHILAM_STRATEGIC_GROWTH_FUND_INC.pdf

PAMI's Equity Fund also has the highest sales load among its peers.
Its at 5.6% for investments of up to 99,000. D*mn!!!!
Its in page 5 on the prospectus.

Plus it also can charge the fund extra for being so awesome lol
(they can charge more once they exceed returns of 12% over a 1 year
period)

[freelancer_babe]

Where did you get that idea  mutual funds are so very fee laden
compared to UITFs

Thanks bro for leading me to the prospectus. So that's where they have hidden those other fees. LOLs!

I was thinking of putting money long term - more than 10 years. UITF is subject to trust fees per year (or, is this is computed within the NAVPU(?)). I was thinking that I will be able to save more on just paying one time entry or exit fee instead of dealing with trust fees that are charged each year on UITF (or maybe not?).

Makes Sunlife MF's back-end an attractive option, no? Yun lang I have a VUL with them, so I'm thinking of putting money elsewhere.

[mxherr5]

no prob.

UITF's trust fees are exactly like a mutual fund's management fee.
Its basically the same thing but it just goes by different names.

Personal disclosure: The only mutual fund I have is Sunlife because
of the option B(no sales load) AND UITFs then had stiff minimum investment
requirements (50k).

Now any new investments I make I plow it to UITFs, UITFs have
no sales load and shorter holding periods.

And when talking about Equity funds, the "cheapest" fund with only 1% trust fee
is a UITF(BDO). The lowest management(trust) fee among mutual funds is 1.75%(Philequity if I'm not mistaken)

[abbey]

hehe nagstart na ko sa fami last month..  magbabasa basa nga muna ko dito for more info.

[leelou]

@leelou, why not invest in BPI's Peso Equity Index Fund then?
BPI made this new index fund(UITF) because I don't think
SEC is going to finish processing the request for additional shares
for PSIF any time soon.

hindi ako naka-enroll sa UITF ng BPI. sa MF lang. i didn't bother with UITF before kasi target ko was PSIF lang knowing their Equity Fund sucks naman di ba? hehe. i was expecting kasi they'll offer it na again soon kaysa mag-enroll pa ako ulit sa UITF

Did this guy share some hard data to back up his claims?
What time period are we talking about here?
Over a 1 year period? 3 years? 5 years? etc?

If its over a 20 year period then only one fund is that old,
Philequity and man it beat the index so bad it isn't funny.

On the other hand, out of the 10 equity funds I'm tracking
only 3 funds(30%) are lagging behind the index over a 5 year period.

4 funds are lagging behind the index over a 3 year period

And all of those laggards are BPI Equity funds.
BPI really sucks on equity funds 

sorry bro no other details kasi it was just shared by another member na nag-ask dun sa investment officer nila sa company nila

[freelancer_babe]

@mxherr - I made a bit more reading. Mukhang computed rin nga ang fund management charge sa NAVPS just like what they do with their VULs. Ang mahal pa ng fund management fee ng MF compared to UITF. Trust fee ng BDO is only 1%, hehe (BDO's UITF products is the only thing I like with BDO). Yung iba less than 1% pa, like that of BPI Short Term fund. Tama, makes most MFs quite expensive now compared to UITF.

Philequity is not that bad pala ha. Pero yun lang, mukhang parang parehong may entry at exit fees(if you are putting in funds for not more than two years). Not to mention I also worry baka hassle din sa mga maiiwan ko (knock on wood) kung sakaling ire-redeem nila yun as they don't have offices everywhere (especially if fund to invest is left long term). Might as well go for Sunlife na may agent pa talaga to check on me at may provincial offices pa.

Yun nga lang mas mababa nga lang ang karamihan ng minimum balance ng MF, and karamihan din mababa ang additional amount to invest. Ang dali pang intindihin ang UITF (kaya ako dito unang gumawa ng investments) compared to MF.

And, seems like recently mas maganda pa ang overall performance ng karamihan ng UITF than MFs. Hehe.

[freelancer_babe]

Eventually after all the fee-saving discussions, I still would want the chosen MF to still be easily accessible by heirs, considering that I have to place in money in it long term (and quite a significant amount in it). And being in it long term, I might run into the trouble of forgetting that investment especially as I age and start to slow down. Hehe.

Although lower fees is still an important consideration, I wouldn't mind paying those additional fees as long as I'm getting better support and that heirs could easily get it.

This thought also goes to any insurances (especially life and health) as well.

[ikaela]

On the other hand, out of the 10 equity funds I'm tracking
only 3 funds(30%) are lagging behind the index over a 5 year period.

4 funds are lagging behind the index over a 3 year period

And all of those laggards are BPI Equity funds.
BPI really sucks on equity funds 

mxherr5, would you mind if I ask which funds are the top 3 out of the 10 you are tracking?

[mxherr5]

Over the long term (5yr and 3yr time frames), PhilEquity, FAMI and UCPB's UITF Equity
are always on the top.

[ikaela]

^Okay, thank you. Looking into placing some extra money into a UITF -- have narrowed it down to UCPB, BDO, and UnionBank. This will be my first time if ever -- do you have any personal recommendations since you say you "plow money into UITFs"?

By the way, I read your assessment on index funds here in the Philippines on the "other" forum. I must say, I agree with you on that the studies made based on the US market do not directly apply to the Philippine market.

[adrian]

Mga sis, patulong lang po. If you could help explain what's going on, I would really appreciate it.

I got registered mail today from SUNLIFE, calling for the annual shareholders meeting. What stood out where the following in the agenda:

j. Reduction of Par value from PHP1.00 to PHP0.01 per share, with the difference going to the company's Additional Paid In Capita (APIC).
k. Reduction of Authorized Capital Stock (ACS) from PHP 3.8 Billion to PHP 38 million at the par value of  PHP.0.01 per share.
l. Blanket increase of the ACS from PHP38 million up to PHP1 Billion at the par of PHP 0.01 per share.



Let's play with the idea of having invested 10,000 in Sunlife MF.
I don't understand what they're proposing.

Face value to move down from P1/share to 1 centavo/share? ONE centavo?
So from 10,000 shares (galing sa nainvest na 10,000 pesos) it becomes 100,000 shares? Am I right?

IN the same way, 3.8 Billion of ACS becomes 38 million. Tama ba?

Tapos -- magic magic mathematics -- that 38 million somehow blanket increases (I don't even know how that happens) "UP TO" 1 billion?

Naimagine ko tuloy na parange balde at tabo ng tubig, and they're just pouring money into different sized buckets para dumami and maging liquid. Ang gulo. Kakaibang accounting ata 'to, di ko makuha and I've read the whole thing twice over

Panic time na ba?

[mxherr5]

@ikaela,

I'm not sure that is a good idea
as our personal circumstances might
be different.

First off, I definitely will not invest
in Unionbank's Equity fund for the following
reasons.

Although I can probably invest 100k, I sure
won't do that in just one go.
Studies in the US show that cost averaging
doesn't really give higher returns nor does it
lessen the risk over the long term but I'd
still like some peace of mind thank you very much.

Plus, it has trust fees as high as mutual funds
(2% if I'm not mistaken) and it also has a dubious
way of collecting a quasi sales load (thru a bid-offer spread)

BUT it has one of the biggest returns among all equity
funds, both UITF and MFs

Next is UCPB, I invest a small amount in this fund
regularly.

It is small as investing in UCPB is not convenient.
Which is too bad as it has returns nearly as big
as Unionbank,PhilEquity and FAMI.

I have the biggest amount going to BDO just because
its convenient for me thru EIP.
Plus it has one of the lowest fees among equity funds
at 1%.

I also have some investments in BPI but only in their
bond funds. Man... their equity funds really suck.

You share my sentiments about index funds then?
I feel ambivalent about that hehe.
Just make sure you make your own research and do not
rely on statements to be true. ;-)

My biggest beef with the index funds here is their
fees. I would reconsider my position if they charge
the same fees as the index funds in the US. Even if
we are still considered an emerging market then.

My fellow debater there was focused on the supposed
"safety" of an index fund though so I wasn't able to
emphasize my point

[freelancer_babe]

^ I read that entire debate. LOLs. Buti natahimik na rin ang thread na yun. I still don't know if I'd like to pursue an index fund. Basta, ang baba naman talaga kasi ng returns ng mga yun. Maybe after a few years, I'd review and reconsider.

Ako rin if I have a 100k to invest, I won't still consider putting money in Unionbank for the plain reason that they haven't given me decent customer service over the years in one of my bank accounts - EON - where all my paypal remittances come in. If they could not give a decent customer service on that account, why should I entrust a bigger amount of money to this bank??? (nice to know those different NAVPUs by this bank huh?)

[ikaela]

mxherr5: Oh, no, you bet I've done my research on index funds since I was interested in it. Keyword: "was". I only brought it up here because I saw your nick in the debate. The other person had good point as well, but they're mostly from studies based on US markets.

100k at one go for me is no big deal; I'm also not very much a fan of cost averaging simply because I prefer to do things one time and then forgetting about it. The main reason I might not invest with UnionBank is because their branches are far from where I am. freelancer_babe, I also have had very bad customer service experience with UnionBank but I tend to be detached when it comes to investments. I only look at the numbers and UnionBank's numbers speak for themselves.

This might come down to fees. All these analysts predict things will go further down next week.

[freelancer_babe]

^ Yun lang sis, kasi I still think and worry that my investments will still pass through the same set of people who are also handling my bank account. Kaya negative pa rin ang Unionbank sa akin. Baka mamya, in case I drop early, baka din pahirapan pa ang pagclaim ng heirs ko ng pera ko sa mga tinanim kong UITF (oh well, pahirapan na nga ang pag-open pa lang ng EON bank account sa kanila). But of course, what I said here is just what I think about them.

However, I could also say I don't also enjoy BDO's customer service and their kilometric long lines at the teller and their customer service. The only thing I like about BDO is their UITF. The last experience I had was when I actually waited for about an hour (really) just to open that EIP. Medyo masungit rin yung taong naghandle ng EIP account ko. But so far, BDO's customer service is still wayyyy better than that of Unionbank's and BDO is a leading bank so I think my money is safe with them.