Pami gains from good economic fundamentals

Stable interest rates, stronger peso, returning investor confidence, and weakening global oil prices has boosted the lot of mutual funds, and the Philam Asset Management Inc. (Pami) is taking full advantage of the strong investment wave.

"Likewise, credit ratings (for the Philippines) are generally stable and favorable, especially with the improved fiscal performance bouyed by the value-added tax (VAT) and better tax revenue collections," Roberto de Ocampo, president of the various mutual funds managed by Pami, said during its recent stockholders’ meeting held at the Makati Sports Club.

Ocampo is also the immediate past president of the Asian Institute of Management (AIM) and former finance secretary.

Concerns, however, were raised on how the 2007 elections would affect liquidity and inflation. Elections are generally characterized by huge spending and followed by strong inflationary pressures.

Meanwhile, Pami’s assets under management (AUMs) stood at a healthy P18 billion or close to its historical highs of P20 billion. These places it second largest combined funds in the industry behind funds managed by the BPI-Ayala Life funds.

"It (AUMs) has generally recovered from the May to June levels when investors paniced over the poor performance of the UITFs (unit investment trust funds), and which affected other investment instruments like mutual funds," Karen Roa, Pami president said.

Pami manages five funds, which are: the Philam Bond Fund (PBF), the Philam Fund Inc. (PFI), the Philam Strategic Fund (PSG), the Philam Dollar Bond Fiund (PDBF), and the GSIS Kinabukasan Fund.

As of Sept. 4, the net asset value per share (NAVPS) of the PBF was 2.4282; the PFI, 6.4423; PSG, 236.61; PDBF, 1.3607; and GSIS, 1.3943.

Year-to-date (YTD), the NAVPS yield of the PBF was 6.86 percent; PFI, 13.41 percent; PSG, 16.45 percent; PDBF, 3.32 percent; and the GSIS, 14.63 percent.

"The equities (securities) market are extremely bullish. There are a lot of foreign funds entering the domestic equities market. Remittances are also boosting the local equties and property markets," Roa added.

Next year, Pami will be introducing new funds, new distribution systems and channels.

Two of the new funds are a global equities fund and a global bond fund to be launched sometime in the first semester of 2007.

The future of a global equities fund for Philippine asset management companies however lies in the hands of the Securities and Exchange Commission (SEC).

The Pami chief executive explained that there were issues involved in global equities fund. The regulator, for example, wants to determine the rating of foreign equity where the local asset management company can invest in. There is also the issue of who can be the custodian for the foreign issue.

"For the global bond fund, we will be assisted by the international network of the American Investment Group (AIG), the mother unit of the Philamlife group in the Philippines," Roa said. "We will be looking at the emerging markets, global corporate issues, and of course AIG-led global issues."

For improvements in the distribution channels, Pami will develop, enhance and expand its financial advisors (FAs).

There will be FAs that will be marketing various Philam products such as life insurance, pre-need, and mutual funds. But there will be FAs specializing on mutual funds and the global funds.

The FAs and the new channel is much like the the private banking arm of universal banks.