BPI-managed mutual funds up 43%

Mutual funds under the BPI asset management group grew by 43 percent from P13.2 billion in end-2002 to P18.9 billion last year, fortifying its position as the biggest mutual fund in the country.

For this year, the BPI asset managers expect a sustained growth rate to roughly P26 billion, as the uncertainties of the national elections and a noticeable shifting to the dollar-based mutual fund attract more investors into mutual funds.

"Investors have started to diversify their savings and investments as well as hedge on the stronger US dollar versus the peso," BPI vice president Fernando Jose Sison III said. "It is also a clear reflection of the kind of money being remitted by the overseas Filipinos."

The trend towards hedging on foreign currencies was even magnified with the peso plunging to a record low of 55.85 to the dollar.

The dollar-based mutual fund managed by the BPI asset group, called the Far East Dollar Bond Fund clearly reflected the trend.

In December 2002, the dollar fund stood at P64 million. But by end 2003, it grew to P1.9 billion.

Incidentally, the dollar bond fund will be renamed Ayala Life Fixed Income Dollar Bond Fund (ALFIDBF).

The combined assets under management (AUM) of the BPI asset group is reportedly equivalent to close to 50 percent of the total assets of the entire mutual fund industry.

A mutual fund is an investment vehicle that allows the small investors the opportunity to invest in the equity and bond market. The fund manager pools the money of individual and institutional investors, allowing them to make significant earnings.