The Philam Asset Management Inc. (PAMI) is optimistic that a 20-percent growth rate for the whole of 2007 was achievable.
As of end October this year, net assets of all its mutual funds reached P22.3 billion, almost 15 percent better than the P19.489 billion end 2006.
“Traditionally, the last quarter of the year is the strongest in terms of net sales,” Karen Liza M. Roa, PAMI president and chief executive officer, said.
Significant growth in remittances have contributed to a consumer-driven economy. Remittances passing through the Philippine banking system has been growing by over a $1 billion annually. It is forecast to surpass the $14 billion mark after it recorded remittances of over $12 billion last year.
Rough estimates place overall remittances to breach the $20 billion mark. Aside from the banking or formal sector, money transfers to beneficiaries of overseas Filipinos also tap the informal sector such as the so-called door-to-door remittances and direct deliveries.
Nonetheless, higher remittances also mean certain amounts finding its way to savings including mutual funds.
For the whole of 2007, the mutual fund industry is expected to grow by 20 percent.
Next year, annual growth forecast could move up between 20 to 23 percent for both PAMI and the industry as a whole, despite stiff competition from other financial sectors.
“There will continue to be strong competition from other financial institutions such as banks and life insurance,” Roa said.
The trust departments of most commercial banks are offering unit investment trust funds (UITFs) are compete directly with mutual funds as the minimum initial investable amount is between P5,000 to P10,000.
Mutual funds, which are managed by non-bank fund managers, require from between P2,000 to P5,000 minimum initial investable amounts.
Both UITFs and mutual funds are invested in practically the same investment instruments such as bonds and equities.
Another competitor are the so-called variable or unit-linked life insurance products that mimic mutual funds. It is a life insurance product laced with an investment instrument.
PAMI nonetheless remain unfazed as it will continue to launch education and promotional roadshows throughout the country to expand its client base. It has the biggest shareholder or client base at 93,000, thus living up to its billing as the most retail-friendly mutual fund.
PAMI executive vice president Gina Goco-Morales said that next year, roadshows for education, information and promotions will continue especially in southern Philippines.
“We will also be aggressive in mass media advertising and other forms of marketing in 2008,” Morales added.
PAMI is the fund manager for six mutual funds. These are: Philam Bond Fund or PBFI (fixed income); Philam Strategic Growth Fund or PSGF (equity or stock market); Philam Fund or PFI (a mix of equities and fixed income investments otherwise known as balanced fund); Philam Dollar Bond Fund or PDBF (US dollar-denominated fixed income); GSIS Mutual Fund Inc. or GMFI (balanced fund initiated by the Government Service Insurance System); and the Philam Managed Income Fund or PMIF (money market).
As of end October, net assets of the PBF stood at P6.5 billion while the PDBF amounted to P5.5 billion.
The PFI reached P3 billion while the GMFI ballooned to P4 billion.
The PSGF grew to P3.5 billion while the PMIF was recorded at P67 million.
A mutual fund is an investment company whose objective is to make money by investing and reinvesting in securities and other instruments. An investor can participate in the investment company or mutual fund by buying the shares of the fund, thus becoming shareholders.
The fund is managed by an asset management company (AMC) run by fulltime investment professionals.
A mutual fund is one of the profitable savings instruments for small investors. Funds receive as low as P2,000 (in the case of the GMFI) or the standard initial amount of between P5,000 to P10,000.