The May national election is the main drag, as local and foreign investors prefer to take a wait-and-see attitude towards expanding until after the elections.
"What is critical for investors in their perception of a credible and fair elections," said Emilio S. de Quiros Jr., BPI executive vice president and head of the asset management group. It likewise follows that whoever wins the presidency must convince the business community of its program of governance.
A positive perception by the investing market could result in better ratings, which in turn could result in better yields for corporate or sovereign bonds or debt papers. That would increase therefore the yields of funds and investments by local financial institutions.
From an AUM (asset under management) of P94 billion in 2001, the BPI asset management group saw these grow to P115 billion the following year. Last year, it increased by another 13 percent to a record P130 billion.
In fact, it solidifies the asset group position as managing the biggest portfolio in the industry. Other local commercial banks managing considerable CTFs are the Rizal Commercial Bank Corp. (RCBC), Banco de Oro Universal Bank, and the Metropolitan Bank and Trust Corp. (Metrobank).
The assets managed by the BPI group are divided into two distinct portfolios, or the segmented portfolio and the pooled funds.
Examples of segregated portfolio are retirement funds of corporations, funds of pre-need companies, funds of schools and foundations while pooled funds are basically common trust funds (CTFs) and mutual trust funds (MTFs).
The segregated portfolio stood at P63 billion by end 2003. The pooled funds were recorded at P67 billion, broken down to P47 billion classified as CTFs and P20 billion with the MTFs.
The two funds (CTFs and MTFs) incidentally are industry leaders in terms of volume and value.
The CTF grew from P41 billion in 2001 to P45 billion the following year. The MTF started a humble P6 billion in 2001 but more than doubled in 2002 to P13.7 billion.
"Growth has been steady not only in terms of volume but also good in terms of returns beating both our benchmarks and the market," De Quiros stressed.
The BPI Capital Fund had a net annualized return of 31.68 percent while its BPI Global Equity Fund reported a net annualized return of 15.56 percent. Both are ranked tops in its class.
In the long-term fixed income fund, it had a net annualized return of 10.95 percent versus its nearest competitor of 7.74 percent. It is basically the five-year fixed income fund.
In its short-term fixed income funds, the BPI managed assets dominated the top three slots in that group. Short-term fixed income range from 30 to 90 days.
Its BPI institutional fund recorded a net annualized return of 7.31 percent, the BPI premium fund with a 5.54 percent net, and the BPI short term fund with a return of 5.31 percent.
Meanwhile, the assets management group will soon be launching its dollar-based fund called the ALFM Dollar. It is actually a "remake" of the existing Far East Dollar Fund.
In 2000, BPI acquired the Far East Bank and Trust Co. (FEBTC). The two were the leading financial institutions in the trust and asset management group at that time.
"We are just waiting for the approval of the Securities and Exchange Commission, and we see no reason for a negative response since it is basically a change of name of the fund and some improvements," the asset management group head added.