BPI leads mutual fund sector with P23-B assets under mgm’t

Assets under management (AUM) of the Bank of the Philippine Islands (BPI) reached P22.96 billion as of end-May this year, still the biggest in the local mutual fund industry.

The BPI group manages three mutual funds: the Ayala Life Fixed Income Fund (ALFI), ALFM Dollar Bond Fund and the Philippine Index Fund.

Of the three, ALFI constitutes the bulk at P20.3 billion followed by the ALFM Dollar Bond with approximately P2.25 billion. The Philippine Index Fund has funds amounting to P328 million.

BPI officials said the asset management group expects ALFI to register P23 billion in AUM and a combined figure of P25 billion by end-2004.

BPI vice president Fernando Jose Sison III said that they are confident of hitting targets this year due to the strong yields of its funds and the confidence shown by investors towards trust accounts under the BPI group.

"BPI has an excellent reputation as a fund manager," Sison said, adding that the average yield of its fixed-income ALFI fund stands at 7.3 percent.

He admitted, however, that the volume of funds in the first five months tapered off due to the weak economy and the uncertainty of the national elections. But with the resolution of the elections, investors are expected to increase their investments especially those that "parked" their cash in bank deposits.

The P23-billion AUM target for ALFI translates to a growth rate of 22 percent from the P18.9-billion level in 2003. In 2002, ALFI’s AUMs amounted to P13.2 billion.

The fixed income mutual fund has a customer base of about 5,800.

Meanwhile, the growth of the ALFM dollar bond fund (formerly the Far East Dollar Bond Fund) showed that investors continue to exhibit an insatiable appetite for dollar-based investments.

In 2002, the foreign currency fund amounted to a peso equivalent of P64 million. But the following year, it surged to P1.9 billion as its account base went up from a mere six to nearly a hundred last year.

A mutual fund is an investment vehicle that allows small investors the opportunity to invest in the equities and bond markets. The fund manager pools the money of individual and institutional investors thus allowing it to make significant earnings.

Placements with mutual funds range from as low as P2,000 to as high as P100,000, depending mainly on the fund manager.