Sun Life’s RP unit broadens reach in mutual fund industry

The local unit of Sun Life Financial Services, Canada’s leading insurance company, is broadening its reach in the mutual fund business, a move its officials said would not only provide a boost to the industry but also hopefully address the public’s growing inclination to invests in get-rich-quick schemes.

Sun Life Asset Management Co. (SLAMC), which manages about P3 billion in funds pooled from over 3,000 investors, has tapped the services of the Philippine Stock Exchange’s (PSE) trading participants to distribute and market the mutual fund products to their clients, dramatically increasing the number of the company’s licensed representatives —— already the largest network of its kind in the country.

Last October, SLAMC conducted trainings and seminars to help representatives of brokerage houses in securing licenses from the Securities and Exchange Commission. Out of 166 examinees, over 65 percent passed the SEC’s accreditation exams, qualifying them as investment, solicitors and distributors of mutual funds.

A mutual fund is an investment company or a special purpose investment vehicle that pools money from shareholders for investments in a portfolio of securities. Mutual funds can be categorized in three basic categories: a bond fund which invests primarily in debt securities or bond issues; an equity or stock fund which deals in equities or shares of stocks; and a balanced fund which mixes the debt and equity component, depending on market conditions.

Aside from the three fund categories, SLAMC also deals in foreign exchange denominated securities.

SLAMC officials said the entry of their products has provided dynamism in the local mutual fund industry, considered as relatively new and small by global standards. There are less than 20 mutual funds in the Philippines, with the oldest not even 12 years in operations.

In the US, there are 8,356 mutual funds with a combined net assets of almost $7 trillion as of May this year. About half of all households in the US own at least one mutual fund.

For a minimum placement of only P10,000, investors can choose – and transfer – to put in their investments in any of the SLAMC’s family of mutual funds without being subject to any charges or fees.

Last year, the entire fund package gave an average net return of 10.5 percent on investments while this year, due to the tight market in the various securities, the rate of return is expected to average 7.5 percent to eight percent, SLAMC officials said.

SLAMC said the investments are expected to reap in a steady – even guaranteed – rate of return since these are handled by professional managers backed up by a financially stable insurance giant.

Sun Life was demutualized and simultaneously listed in the stock exchanges of Toronto, New York, London and the Philippines in March 2000 at an initial price of P348 per share. At the PSE, Sun Life stocks closed P45 higher yesterday at P975.