FMIC mulls more ETF offerings

MANILA, Philippines - First Metro Investment Corp. (FMIC), the fund management arm of the Metrobank Group, is planning to exchange-traded funds (ETF).

The company is looking to launch ETFs tracking the robust consumer segment in the stock exchange and the local fixed income market, top company executives said.

“The country’s economic success story is underpinned by strong consumer growth in the country,” FMIC president Roberto Juanchito Dispo said in a briefing.

Hence, FMIC is studying the possibility of launching an ETF focused on the consumer sector, he said.

“Heightened government spending, strong consumer demand and remittances from the over two million overseas Filipino workers will continue to drive growth,” Dispo said.

ETFs are securities and investment instruments that monitor a commodity of assets like an index fund but trades like a normal stock in an exchange.

However, the launch of a consumer-focused ETF still hinges on the Philippine Stock Exchange’s creation of a consumer index, said Augusto Cosio Jr., president of First Metro Asset Management Inc.

Dispo said FMIC is also targeting to launch late this year a fixed-income ETF amid robust activity in the primary and secondary bond markets in the Philippines.

In December, FMIC completed the listing of the country’s first ETF, broadening the choice for both retail and institutional investors particularly at a time when the stock market is expected to continue growing.

To improve access to Philippine ETFs, FMIC is also planning to hold a dual listing in the Singapore bourse in partnership with DBS, Dispo said.

The dual listing will make FMIC’s ETFs available to Singaporean and other Southeast Asian investors. ETFs offer several advantages and investment options to investors including liquidity especially for those who cannot directly access specific sectors in the market due to a country’s specific regulatory environment.

In March, the PSE said it is tweaking the guidelines on the listing of ETFs. The revisions, which include the removal of the requirement for an underwriter and a paid-up capital, are seen to facilitate the entry of more ETFs in the local bourse.

Aside from the Metrobank Group, other entities that plan to offer ETFs are Sy-led BDO Unibank Inc. and Bank of the Philippine Islands of the Ayala conglomerate.