BPI's Odyssey funds grow 10.5% to P20 B

MANILA, Philippines - The Odyssey funds of the Bank of the Philippine Islands (BPI) expanded 10.5 percent to nearly P20 billion in 2011, with all funds registering double-digit growth year-on-year.

The Odyssey funds are unit investment trust funds (UITFs) managed by a trust and investment group, which was acquired by BPI from the ING Bank NV at the close of 2010. It is now under the Asset Management Group (AMG) of BPI.

The group manages 13 funds, although three are institutional in character while the 10 are focused on the retail market.

These funds are in earning instruments such as variants of fixed income peso-denominated funds, variants of US dollar-denominated bond funds, variants of Philippine equity funds, global equity funds, balanced funds, and money market funds.

The assets under management (AUM) of the 10 retail UITFs was valued at P19.99 billion as of end-November 2011 from P18 billion recorded in early March of the same year.

BPI senior vice president and AMG head Maria Theresa Marcial-Javier said that interest rates is forecast to remain low in the long term which favors investment products such as pooled funds.

“We think interest rates will remain low over the long term. And therefore, we would eventually see a shift in investment preferences to non-guaranteed but higher yielding financial products,” Javier added.

The Philippine High Conviction Equity Fund has the largest assets worth over P6 billion from just P3.9 billion in March 2011.

It is a peso-denominated fund invested in the stock or securities market, and classified as an “aggressive” fund or higher risks in a more volatile market but with higher returns.

Year-to-date returns of the fund reached 23.67 percent while it expanded by 31.47- percent.

Initial minimum investment is P10,000 with subsequent minimum investments of P5,000.

The Philippine Equity Fund has invested assets worth P4.6 billion as of end- November 2011 from P6 billion in March.

The difference between this fund with the Philippine High Conviction Equity Fund is the securities and sectors invested in.

The fund volume has shrunk from redemptions and shifting to the High Conviction Fund. “There are accounts that already took advantage of the high returns while the other accounts have shifted to other funds,” fund managers explained.

Year-to-date return was recorded art 11.71 percent.

 Next biggest fund is the Peso Bond Fund with assets worth P4.1 billion in end November from P2.1 billion in March.

It is classified as a long-term fund with a relative aggressive feature, with year-to-date returns at 14.4 percent.

Bond funds are invested in corporate papers with fixed income returns.

The Diversified Balanced Fund has assets worth P2.4 billion, with a year-to-date return of 12.56 percent. It is a UITF that are invested in a combination of fixed income and equities.

The Peso Cash Management Fund has assets worth P1.6 billion at the start of December 2011 from P1.18 billion end March.

The other peso-denominated funds are the Peso Income Fund and the Diversified Capital Fund.

The US dollar-denominated Odyssey Funds are the Emerging Market Bond Fund, the Philippine Dollar Bond Fund, and the Asia Pacific High Dividend Equity Fund.

The Philippine Dollar Bond Fund reported a year-to-date return of 8.76 percent and a return of 10.65 percent.

The Asia Pacific High Dividend Equity Fund meanwhile is the only fund with a regional value-driven strategy. 

“Being able to invest in Asia Pacific stocks in their native currencies, investors do not only participate in the upside of high dividend stocks of these markets but at the same time participate in the potential appreciation of these local currencies,” Paul Joseph Garcia, BPI senior vice president and Odyssey division head, said.

Garcia said that fund managers are bullish on the medium to long term on local Asian currencies versus the US dollar.

“It gives investors the total return upside anchored by the fund’s high dividend yield and a potential currency upside,” he added.