Are you ready for an all-weather fund?

If you started investing in the stock market 10 years ago, chances are, you are very disappointed with the returns that you are getting right now. 

If I just started 10 years ago, I would be. Fortunately, I’m old enough and started early on doing my regular investing such that I’ve seen several scenarios over the decades that allows me to be patient with this currently ho-hum market. If the last 10 years (2013 – 2023) gave us a Philippine Stock Exchange (PSE) index that’s virtually unchanged, the earlier 10 years (2003 – 2013) gave us a six-fold return.

But then again, 10 years is a long wait that would make the regular Juan regret having invested in this asset class, particularly in our local stock market that has become very insignificant to foreign fund managers. 

Enter the dragon

There’s no Bruce Lee movie here but we are entering the Year of the Dragon soon and it may be an opportune time to shake things up a little bit in our investment portfolio.

On Nov. 6, 2023, I attended an event hosted by COL Financial to talk about their newly launched all-weather fund called COL Strategic Growth (CSG) Equity Fund. It is a Philippine  Peso-denominated fund that aims to generate long-term capital growth through active portfolio management. The fund invests in common stocks listed in the PSE, with the goal of outperforming its benchmark’s return over the long term.

What’s new? What’s different?

1. CSG Fund is flexible in terms of asset allocation. Unlike other funds that have restrictive asset allocations (e.g. primarily stocks, balanced stocks and fixed income, fixed income only, etc.), CSG can allocate its funds according to how it reads the market, with no maximum cash limit. This is beneficial given the cyclical and volatile nature of the local equity market.

2. It has no lock-up period.

3. It does not charge early redemption fees.

4. It has one of the lowest management fees.

5. It has very low minimum subscription requirements: P500.00 for initial subscription and P100.00 for additional subscription.

Risk rating

With its low initial subscription and additional contribution, every Juan and Juana can afford this. But wait! How about the risk? The risk rating of the fund is a high Risk Level 4/4. This means that the fund’s price could possibly move in wide fluctuations as it is invested primarily in stocks. So, make no mistake, this is still your long-term fund that is ideally held for many years in order to achieve that strategic growth. 

Trust in the process

Results such as investment returns can never be controlled by anyone, no matter what a great investor you are. What you can control is the process. And this is the reason why you have to know the people and the process behind the fund that you are investing in.

The reason why I love equity index funds is that they are automated to just be invested in the top 30 listed companied in the PSE. So, why should we still consider this CSG Fund? It’s because its mandate is to be an all-weather fund.

An all-weather fund uses a diversified investment approach developed by Ray Dalio of Bridgewater that helps investors protect their assets from risks in the financial market under all market conditions, both positive and negative economic environments. After long decades in the market, he experienced triumphs and failures, Dalio accumulated hundreds of principles not just in investing but life in general. All these allowed him to master the process for his fund and even share them in his books, videos, master classes, etc. 

Now, let’s go to the Philippine setting. Who are the people behind the CSG fund? You have the COL Financial team led by its chairman Edward Lee, president Dino Bate, Chief Equity Strategist April Tan, Chief Technical Analyst Juanis Barredo, and COL Investment Management president Marvin Fausto. (Disclosure: Marvin Fausto is my husband.)

The above team consists of people I know personally and so I will refrain from saying more about them, but please do your own research and see if they are the ones you can trust to implement that flexibility in the management of your all-weather fund. Because we all deserve to earn from our hard-earned money that we invest, no matter what the market condition is. 

ANNOUNCEMENTS

1. I will be at the SMX Convention Center on Nov 14, 2023 with my son Enrique Fres Fausto for the BSP Fin-Ed Congress 2023.

2. To learn more about the CSG all-weather fund, click the QR code.

3. If you want to know where you are in your FQ journey. Click here.

4. If you want to know your FQ, buy our books. Click here.

This article is also published in FQMom.com.