FAMI mutual funds reach P5.5 B as of end-Jan

MANILA, Philippines - First Metro Asset Management Inc. (FAMI) is cultivating investments made with the five mutual funds managed amounting to a total of P5.57 billion at the end of January this year.

In May 2011, its assets under management (AUM) stand at a mere P3.5 billion.

But FAMI executive vice president and chief operating officer Hector C. de Leon said that what is more important than the AUMs is that the investors must be aware of their investment objectives.

“The public must have clear objectives for their investments,” he said. “Are they investing for their retirement? Or are they investing for next year’s tuition fee(s)? Or are they investing for next summer’s vacation?”

The characteristics of the funds allow for the investors to fit their objectives, including the time frame, he explained.

 Short-term earnings targets (one to two years) would be fit for short term funds with a low-risk character such as fixed-income or bond funds. Long-term objectives would fit better with long-term funds such as equities or balanced funds which are best characterized by a three to five-year time frame. But equities are not for risk averse investors while the balance are for the moderate risk takers. The higher the risks oftentimes mean greater returns.

 FAMI manages five mutuals funds under the Save and Learn (SAL) family, that are invested in fixed or bonds funds (SAL Fixed Income Fund or SALFIF); equity or securities fund (Save and Learn Equity Fund or SALEF); balanced funds (Save and Learn Balanced Fund or SALBF); US dollar-denominated bond funds (Save and Learn Global Opportunity Fund or SALGOF); and money market fund (Save and Learn Money Market Fund or SALMMF).

The assets of SALFIF stood at P1.2 billion at the end of January this year. The SALEF has AUMs worth P3.37 billion; the SALBF with P790 million; and the SALMMF with P206 million.

The minimum initial investment in a mutual fund is P5,000, after which a minimum investment of P1,000 can be made anytime. However, there is a minimum holding period of six months before an investor can redeem.

 If investors were to make a regular investment of P5,000 monthly for a number of years in a good performing fund, there is a good possibility that it could reach a million pesos. Of course, there are a lot of factors, but the discipline of making regular investments will heighten that probability.

At the least, the investor has regular savings that can earn better than if one were to put the same amount in a regular savings account in a bank,” De Leon pointed out.

FAMI is a joint venture among the Catholic Educational Association of the Philippines (CEAP), the Marist Brothers, and First Metro Investment Corp., which is a member of the Metrobank Group of Companies. The two minority owners are both Catholic school operators whose main advocacy in partnering with FMIC is to provide educational institutions and their teachers (and other employees) with sound investment vehicles in the form of the Save and Learn (SAL) mutual funds.

In the Philippines, a mutual fund is a company registered with the Securities and Exchange Commissison (SEC). The company sells common shares in the form of assets that result in a pool of money from the investing public, which is in turn managed and invested by a fund manager, in this case, FAMI.

FAMI is guided by strict regulations. It monitors the value of the investments very closely so that he can maximize the earnings of the fund, while operating within the fund’s objective and guidelines.

A good investment manager should outperform the usual alternative investments available mostly to big investors.

Fund managers typically invest in a variety of securities, seeking portfolio diversification. A diversified portfolio helps reduce risk by offsetting losses from some securities with gains in others.

The average investor would find it expensive and difficult to construct a portfolio as diversed as that of a mutual fund. Mutual funds provide an economical way for average investors to obtain the same kind of professional money management and diversification of investments that is available to large institutions and wealthy investors.

 In the Philippines, there are 46 mutual funds in the industry, managed by 10 professional fund managers.