Prudentialife, 1st Metro and Grepalife form mutual funds

While some financial institutions were struggling to meet their obligations, other players quietly grew their portfolios, expanded their investor base, introduced new financial products for the hungry investing public, and forged strategic alliances with other financial institutions.

First Metro Investments Inc., Prudentialife Plans Inc., and the Yuchengco Group of Companies took their financial services one notch higher by entering the growing mutual fund industry.

First Metro will be launching a mutual fund in alliance with a strategic partner sometime in the start of the second semester, or sooner.

"The mutual fund industry has grown to roughly P60 billion last year, and we want to participate in developing the country’s capital markets," First Metro president Francisco C. Sebastian said. First Metro will be the fund manager of the proposed mutual fund.

The target is the retail market which will allow initial investments of P5,000. Its efforts will compliment the trust operations of Metropolitan Bank and Trust Co (Metrobank), which cover the larger individual and institutional investors.

But unlike its competitors, First Metro will not ally with the Philippine Axa Life Insurance Corp., a sister company under the banner of the Metrobank Group.

The largest mutual fund is managed by the BPI Asset Management Group of the Ayala Group which includes the Bank of the Philippine Island (BPI). Known as the Ayala Life Fixed Income Fund, it is the single biggest fund in the industry and co-marketed by the Ayala Life Assurance Inc.

Meanwhile, the Prudentialife Group quietly launched its Optima Funds while forging strategic alliances with Deutsche Bank AG and ING Bank NV, two of the foreign fund managers.

Optima Funds offers both mutual and unit investment trust funds (UITFs) which replaced the common trust fund (CTFs). Mutual funds offered by Optima are a fixed income fund, a US dollar fixed income fund, and an equity fund.

That will allow its present client base of pre-need products, like education, pensions and memorial, other options for growing their money.

Last year, the Yuchengco group launched Grepalife Asset Management Corp. (GAMC) to run its own mutual funds. It is closely allied to sister company The Great Pacific Life Assurance Corp. (Grepalife), one of the leaders in the life insurance industry.

GAMC and First Metro has the advantage of being part of a huge financial conglomerate while Prudentialife will rely heavily on its sales and marketing force.

The country’s mutual fund industry reported assets under management (AUMs) of almost P60 billion last year. Biggest fund managers were the Ayala group, the Philippine American Life and General Insurance Co. (Philamlife) group, and Sunlife Financial.

There are less than 40 mutual funds managed by Mutual funds allow small investors to grow their money through fund managers that pool together a large number of money into a single fund or investment instrument. Initial investments range for as low as P5,000 to P10,000.