Mutual fund’s AUM in first three months reach P47B

The country’s mutual fund industry’s asset under management (AUMs) as of March 31 this year grew by P3 billion in the first quarter to P47 billion, or seven percent over the year-end figure of P43.99 billion.

Total accounts in the same period reached 55,448 individual and institutional investors.

The end March 2004 assets is well over 80 percent better than the AUMs managed in 2002 of P25.8 billion.

"Dominating the industry are the bond funds, which comprise a high 93.7 percent of all mutual funds, an indication that the great majority of our investing public still prefers the conservative nature of fixed-income investments," said Fernando Jose Sison III, president of the industry association Investment Company Association of the Philippines Inc. (ICAP).

Sison is a member of the asset management and trust group and vice president of the Bank of the Philippine Islands (BPI).

Bond funds are investments made in government securities and other instrumentalities considered low risk but also lower in returns.

This was followed by the balanced funds which comprised 4.1 percent of the industry, and equity funds, only 2.2 percent. The index fund is based exclusively on the performance of the Philippine Stock Exchange (PSE) index or Phisix.

Balanced funds are investments made in both bond and equities markets while the equity funds are placed exclusively in the equities and capital markets. The latter generally give higher returns but are also more volatile.

Bonds funds reached a little over P44 billion followed by balanced funds amounting to over P1.9 billion. The equity funds was valued at P698 million while the index fund was placed at P323 million.

By fund, the Ayala Life Fixed Income Fund (ALFI) is the single biggest fund with AUMs reaching over P20 billion. It is the only mutual fund that has breached the P20-billion ceiling.

The BPI asset management group is the fund manager of the ALFI, which also manages the ALFM dollar bond fund (formerly known as the Far East dollar bond fund) worth P2.2 billion..

The Philam Dollar Bond Fund is the next biggest fund reaching an AUM figure of P9.8 billion, followed by the Philam Bond Fund with P7.3 billion. The Philam Asset Management Inc. (PAMI) is the fund manager of the two mutual funds.

Other bond funds are the Sun Life Prosperity Bond Fund, MAA Privilege Dollar Fixed Income Fund, and the Legacy GS Fund.

The biggest balanced fund is the GSIS Kinabukasan Fund amounting to P974 million which are predominantly (but not exclusively) funds from members of the Government Services and Insurance System (GSIS).

Other balanced funds are the MFCP Kabuhayan Fund, the Sun Life Balanced and the Sun Life Prosperity Bond Fund, Philam Fund, MAA Privilege Peso Fund, and the Legacy HY Fund.

The Philam Strategic Growth Fund is the largest equity or stock fund with P228 million followed by the Philequity Fund with AUM worth P222 million despite an investor base of just 264. Other funds are the Sun Life Prosperity Philippine Fund and the United Fund.

There are just 10 asset managers running 21 funds. A mutual fund is a basket of individual and institutional investors managed by fund or asset managers. The investments are placed in various investment instruments. These are differentiated from the trust funds which are managed by the trust department of thrift and commercial banks.