Philippine Index Funds Part 2: Philequity and First Metro

Let's continue our review of index funds.  If you missed it you can check out Part 1.

This post features Philequity and First Metro.  First up is Philequity:

PSE Index Fund
Fund Type: Mutual Fund
Index Tracked: Philippine Stock Exchange Index
Minimum Initial Investment: P200000
Minimum Transaction: P50000
Redemption Fee:2% in the first year, 1.5% in the second year
Annual Fee:1.5%
Tracking Error:  No data

Steep investment requirements, high fees.  Not very attractive.


Next is First Metro.  This fund was actually covered in a previous post so I'll just put a summary below.

First Metro ETF
Fund Type: ETF
Index Tracked: Philippine Stock Exchange Index
Minimum Initial Investment: (Multiple of 10 shares) x NAVPU (P111.00 as of 8/8/2014)
Minimum Transaction: Same as above
Transaction Fees: Broker/trading platform dependent
Annual Fee:  < 2%
Tracking Error:  0.05%


That's it for this post.

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:

Sunlife
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.

FAMI
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.

Philam
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)*.

Philequity
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

Mutual Fund Company Roundup 3

The stock market has been taking a beating lately. If you started investing or made investments during last year's run-up to the all-time high, now is the time to average down. Your P1000 investment will buy more shares at today's prices. Again, cost averaging. If you haven't started investing then you need to do some research on the different mutual fund companies out there. This is the third in our company roundup series. Let's take a look at Philequity Management, Inc.

Philequity Management Inc.

Fund types offered:

Bond Fund

 

Equity Fund

 

Equity Index Fund

 

Dollar Fund

 

 

Minimum initial investment:

P10000 for Bond fund

 

P5000 for Equity fund

 

P200,000 for Equity index fund

 

$2000 for Dollar fund

 

 

Minimum subsequent investment:

P5000 for Bond fund

 

P1000 for Equity fund

 

P50,000 for Equity index fund

 

$1000 for Dollar fund

 

 

Front-end Sales load:

1% for Bond fund

 

3.5% for Equity fund

 

5% for Equity index fund

 

1% for Dollar fund

 

Back-end Sales load:

1% for Bond fund

Shares redeemed within

2% for Equity fund

one year of investment date

2% for Equity index fund

 

1% for Dollar fund

 

 

Back-end Sales load:

0.5% for Bond fund

Shares redeemed in the

1.5% for Equity fund

second year from investment date

1.5% for Equity index fund

 

0.5% for Dollar fund

 

Annual Fee

1.5%

 

 

Website:

Philequity Management Inc.

E-mail:

sales@philequity.net

Phone Number:

6898080

Mutual Fund Company Roundup 1: Sunlife and FAMI
Mutual Fund Company Roundup 2: Philam
Mutual Fund Company Roundup 4: ATR KimEng