BPI funds reach P710 B in July

MANILA, Philippines - Total value of all funds managed by the Bank of the Philippine Islands (BPI) has reached P710 billion as of end July 2013.

Of the total, roughly P476.5 billion are trust funds of pre-need companies, special deposit funds (SDA), escrow funds, estate funds, and the like.

The balance of P233.5 billion is investible funds such as mutual funds and unit investment trust funds (UITFs).

These funds are investments made by individuals and institutions, which are in turn invested in various peso-denominated and dollar-denominated investment instruments.

The BPI Asset Management Group (BPI-AMG) is the fund manager of all these funds.

Minimum initial investment to the funds can range from as low as P5,000 with succeeding minimum placements of P2,000, to as high as P100,000 initial investment and P25,000 succeeding placements.

The four basic funds are divided into four groups, which are the BPI Investment Funds, ALFM Mutual Funds, Odyssey Funds and Index Funds.

The BPI Investment Funds is the largest in terms of amount at approximately P89.58 billion, followed by the ALFM Mutual Funds at P84.03 billion. The Odyssey Funds amounts to P48.3 billion while the Index Funds are estimated at roughly P11.6 billion.

Other than the Index Fund, the three other funds are divided into peso and US dollar funds (classified as global funds).

Generally, all funds are invested in fixed income or bonds, equity or stock market, balanced funds or a combination of fixed income and equities, and money market.

Global funds are invested in ROPs or fund-of-funds, which in turn are invested in overseas domiciled funds. These funds are also invested in bonds, equities and money market, all US dollar denominated.

The single biggest fund is the ALFM Peso Bond Fund with assets worth P75.7 billion. It is also the single biggest fund in the country’s mutual fund industry.

BPI senior vice president and BPI-AMG head Maria Theresa Marcial-Javier said that investors are advised to spread their investment allocation.

“Seventy percent of portfolio placed in fixed income, 20 to 25 percent in equity, and five to 10 percent in money market, is a modest or safe allocation,” Javier said.

For the investor with a higher risk profile, equity can get a bigger share of up 40 percent, 50 percent in fixed income and roughly the same for money market.

Javier said that the choice of funds depends on the amount being invested, the risk profile of the investor, the target for each fund, and the time allocation given for each fund.

Overall, returns or earnings from investible funds are generally better than earnings from plain vanilla savings, which is slightly over one percent.

It is better than the two-percent being offered for SDAs, which has been effectively frozen by the Bangko Sentral ng Pilipinas (BSP).

Aside from mutual funds and UITFs, the investing public can turn to insurance products, more popularly known as variable or unit linked (VUL), that offer an investment portion aside from protection.

Investing directly to the stock market, or investing in real estate or property, are other options.