Thursday, March 3, 2011

Some notes about the MF Company Roundups

I got a PM on another forum asking me to comment on the mutual fund companies I've covered in the roundup series. These are (in order of appearance in my posts) Sunlife, FAMI, Philam, and Philequity. Here are my thoughts on each company:

The Good: Sunlife has a long company history that might make it more attractive to risk-averse investors. It also has low minimum investment amounts. If investing for the long-term, sales load charges can go as low as zero.
The Bad: Of the companies listed here, it has the highest annual fee at 2%.
Conclusion: Good for long-term investors looking for moderate returns and zero sales loads.

The Good: FAMI was the best performing Philippine MF company of 2011. Minimum investment amounts are low.
The Bad: To some, the phenomenal performance could signal that FAMI is less conservative in its investments than others. There is no "zero sales load" option.
Conclusion: Good for investors who believe that high returns are repeatable.

The Good: Philam has the lowest annual fee at 1.5% (tied with Philequity). In the long term this could have a significant effect on returns. Good performance in 2010.
The Bad: No "zero sales load" option.
Conclusion: The low annual fee could be attractive to long-term investors, especially those who believe that returns are largely a matter of luck (such as myself)*.

The Good: Philequity has an index fund available. In my opinion this is the best type of fund. It also tied with Philam for lowest annual fee.
The Bad: There is no "zero sales load" option. Also, the minimum investment amounts for the index fund are very high: P250,000 for the initial investment and P50,000 for subsequent investments. The index fund also carries a hefty front-end sales load at 5%.
Conclusion: If there were a "zero sales load" option and the minimum investment amounts were lower, this would be the best MF company in the roundup. As of now, however, their offerings are not very attractive.

Stay tuned for more! Check out these links:

Mutual Fund Company Roundup 1: Sunlife and FAMI
Mutual Fund Company Roundup 2: Philam
Mutual Fund Company Roundup 3: Philequity
* An interesting read: Luck vs. Skill

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