Mutual funds' AUMs breach P100B

MANILA, Philippines - The country’s mutual fund industry has reported that total assets under management (AUM) breached P100 billion as of end-May this year, an all-time high, indicating record levels of liquidity in the financial system.

While the industry is smallest in terms of AUMs within the country’s financial system, its retail character is becoming more and more popular to the investing public.

Majority of the funds receive initial investment of P5,000, with succeeding placements not lower than P1,000.

At the end of 2010, total net assets already reached P95.6 billion, surpassing the previous record level of P89.3 billion in 2007.

Net assets hit its lowest level in 2008, sinking to “just” P59.4 billion before recovering nearly 16 percent to P68.6 billion the following year.

The number of accounts likewise grew to a record level of 115,488.

Last year, mutual fund clients already grew to 106, 300, from 93,400 accounts the year before.

There are 47 mutual funds managed by a dozen fund managers.

The funds are invested in the equity market, the peso or foreign currency bond or fixed income markets, the balanced fund, and the money market.

The equity funds are basically invested in the country’s stock market while the money market is a short term, low return investment.

The bond fund are invested in fixed income instruments such as corporate or government securities. These are either in peso-denominated or foreign currency denominated securities.

The balanced fund is basically a mix of investments in both the equity and bond markets.

But at the end of May, investments in bond funds reached P55.9 billion followed by the balanced funds worth P23.2 billion.

Equity funds amounted to P20.6 billion and the money market at P1 billion.

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. Each fund is incorporated with the Securities and Exchange Commission (SEC).

There are a dozen fund managers who are hired by the incorporated mutual firm to manage the funds.

The leading fund managers in terms of both asset size and the number of mutual funds being overseen are: BPI Investments Management Inc. (BIMI), FMIC Asset Management Inc. (FAMI), Philam Asset Management Inc. (Pami), PhilEquity Management Inc., and Sun Life Asset Management Co. (Slamc).

The other fund manager are: Cocolife Asset Management, Deutsche Bank Asset Management, First Galleon Family Fund, Grepalife Asset Management, MAA Mutual Life Asset Management, MF Management Co. of the Phil., and Multinational Investment Bank Fund.