Ayala mutual funds hit P42.7B

MANILA, Philippines - The ALF Funds has reported total assets under management (AUM) amounting to P42.7 billion end 2010, 36.8 percent higher than the P31.2 billion recorded in 2009.

AUMs are the total amount of investments made by individual or institutions with the ALF Fund, the mutual fund company of the Ayala Group of Companies. Its fund manager is the BPI Mutual Investments (BMI) headed by Fernando J. Sison III.

The ALFM Funds is composed of six mutual funds, namely ALFM Peso bond fund, ALFM Dollar bond fund, ALFM Euro bond fund, ALFM PSE index fund, ALFM Growth fund, and ALFM Money Market fund.

The ALFM Peso Bond Fund, or investments placed in fixed income or bonds, improved by 35.4 percent, or from P22.3 billion in 2009 to P30.2 billion in end 2010.

The ALFM Growth Fund ballooned by 240 percent last year, or from P655 million in 2009 to P2.24 billion.

It is also known as the balanced fund, invested partly in fixed income or bond investment instruments, and partly in the equity or securities market.

The ALFM PSE Index Fund grew by just nine percent, or from P2.53 billion in 2009 to P2.76 billion in 2010.

“There was an obvious migration from the index fund to the growth or balanced fund to take advantage of the robust equity market,” Sison pointed out.

The ALFM Money Market Fund expanded by 460 percent in 2010, or from P50 million in 2009 to P280 million.

Meanwhile, the ALFM Euro Bond Fund improved up 23 percent last year, or from P412 million in 2009 to P505 million, while the ALFM Dollar Bond Fund, increased by 28 percent in 2010 to P6.8 billion from P5.3 billion in 2009.

Sison said that 2011 would still be a strong year for most funds but not as strong as last year.

“It is still a good time to invest in the ALFM Growth Fund since we are in a period of consolidation after the market broke all records in 2010,” he added.

The fund manager will be looking for new placements, and new accounts this year while urging investors to diversify their funds.

Obviously, Sison was referring to the P1.2 trillion parked in the special deposit accounts (SDA), managed by the Bangko Sentral ng Pilipinas (BSP).

“The SDA are non-productive but it is costing the BSP since it is offering four percent interest. It is just parked in the vaults of the BSP,” he explained. “It should be slowly reintroduced to the banks so that it can be lent out for more productive activities.”

Investors are advised to diversify their investments.

“For the risk adverse, they could keep say 80 to 90 percent in the SDA, but place 10 to 20 percent in higher yielding mutual funds or the unit investment trust funds (UITFs) managed by the banks,” Sison, who is also chairman of the Philippine Investment Funds Association (PIFA), formerly known as the Investment Companies Association of the Philippines (ICAP).