Mutual fund assets reach P124.5B in H1

Manila, Philippines - The country’s mutual fund industry said its total assets under management (AUM) breached past the P100-billion mark in the first six months of 2012.

The bullish state of the country’s economy encouraged Filipinos to invest in mutual funds, causing assets to rise to P124.5 billion, from P100.9 billion as of end May.

Investments made with funds placed in the country’s stock or equities market increased to P28.4 billion, while investments placed with funds reflecting a combination of equities and fixed income investments reached over P22 billion.

The public likewise invested in dollar-denominated mutual funds, allowing it to swell to P24 billion.

The more conservative peso-denominated fixed income funds received a total of P54.1 billion.

US dollar-denominated mutual funds investing in fixed income investments grew to P16 billion, proving that the dollar remains a safe haven.

Fixed income mutual funds invested in euro-denominated bond funds crawled to a mere P411 million.

Funds placed in the money market mutual funds remained modest with P124 million. Money market funds are generally “temporary safehavens” for investors who are unsure of their risk appetite. Growth in these funds is similar or even lower than the conservative special deposit accounts (SDA).

Of the total 47 mutual funds, there are nine equity funds, 12 balanced funds (three are foreign currency denominated), 21 bond funds (11 are foreign currency denominated), and five classified as money market funds.

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.

It is registered with the Securities and Exchange Commission (SEC) with a complete set of board members. It then “hires” a fund manager, that takes care of the day-to-day growth of the fund.

So far, the fund managers are identified with some of the leading life insurance companies.

These companies not only manage individual or institutional accounts from the general public.

It likewise utilizes the funds as a combination with its traditional protection insurance products, now more popularly known as variable or unit-linked products.

The leading fund manager of the country’s mutual funds are BPI Investment Management Inc. (BIMI), PhilEquity Management Inc., Philam Asset Management Inc. (Pami), FMIC Asset Management Inc. (Fami), Sun Life Asset Management Corp. (Slamc), and Grepalife Asset Management Corp. (GAMC).