PAMI-managed mutual funds reach P18 billion in August

MANILA, Philippines - One of the leading fund managers for mutual funds is extremely optimistic that 2010 and 2011 will be a great year.

Philam Asset Management Inc. (PAMI) executive vice president Gina Goco-Morales said that 2010 and 2011 would record major gains for both PAMI and the country’s mutual fund industry.

Morales noted that the strongest quarter for mutual funds is the last three months of the year.

“We are already doing P3.8 billion better and it is still the third quarter, it will be a great year,” she said.

PAMI is an asset management company that manages, distributes and provides investment advisory to seven mutual funds. It is a subsidiary of the Philippine American Life and General Insurance Co. (Philamlife), the country’s leading life insurance and financial company.

PAMI reported assets under management (AUMs) of the seven mutual funds it oversees are worth P18 billion as of end August 2010. At the end of 2009, the assets were worth P15.53 billion.

The biggest asset volume managed by PAMI was worth P21.91 billion recorded in 2007. The country’s mutual fund industry also reported a record P86.19 billion worth of AUMs.

One major factor for a stronger 2011, is the ability of the Aquino administration to curb or reduce corruption, and get the private public partnership (PPP) program off the ground and rolling into 2011.

“The program allows the private sector to do their stuff, and we need more foreign investments, too!” the PAMI senior executive said.

Net foreign portfolio investments surged 385 percent in the first eight months of 2010 pumping more into the local securities and equities markets $883.4 million, or about $701 million higher than the net inflow of $182.2 million in the same period last year.

“A lot of the foreign investment inflows are entering the equities market, where a lot of the securities are still under their price to equity (P/E) ratios,” Morales added.

The country’s gross domestic product (GDP) zoomed by 7.9 percent in the first six months of 2010, compared to the 1.2 percent in the same period in 2009.

But one of the major challenges is to seduce investments locked in special deposit accounts (SDAs). It is estimated that P900 billion is sleeping in low-yielding (between 2.5 to three percent) albeit secure SDAs.

Investors had become risk-averse after 2008, and it is taking time to entice them into higher-yield investments like mutual funds, trust funds, or the capital markets. Business is hoping that the bullish equities market can lure the funds.

Also adding to the industry’s woes, is government’s penchant of offering retail treasury bonds (RTBs), which lured billions of pesos away from private-run fund.

Nonetheless, PAMI executives said that they will introduce another fund in the next few months to prepare for the entry of domestic and foreign invest-ments.

The seven mutual funds managed by PAMI are: Philam Strategic Growth Fund Inc. (PSGF), Philam Fund (PFI), GSIS Mutual Fund (GMFI), Philam Bond Fund (PBFI), Philam Dollar Bond Fund (PDBF), Philam Managed Income Fund (PMIF), and NCM Mutual Fund of the Philippines Inc. (NCMMFPI). It is also the local fund manager for the AIG Global Bond Fund Inc.

As of end August, the net asset value per share (NAVPS) of the PSGF stood at 403.47, or a year-to-date (YTD) return of a whopping 27.84 percent and a one year return of 31.12 percent, or a five-year return of 16.39 percent.

The YTD of the PFI stood at 24.07 percent with a NAVPS of 10.5647, while the GMFI reported YTD expansion of 22.31 percent.

The PBFI reported YTD gains of 4.87 percent or a one-year return of 6.12 percent.

The PDBF displayed a NAVPS of $1.1769 with YTD growth of 1.58 percent, a one-year return of 2.18 percent, and a three-year return of 2.6 percent.