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Slides on Pooled Funds - MF / UITF at the Overhaul Stocks Seminar

Slides on Pooled Funds - MF / UITF at the Overhaul Stocks Seminar

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Pooled Funds - MF / UITF Pooled Funds - MF / UITF Presentation Transcript

  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph Investing in Pooled Funds Mutual Funds / UITF
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph WHY INVEST?
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph RETURNS on your SAVINGS Net of withholding tax Rates as of Aug 2013 Savings Deposit Rates Amount BDO BPI MBT 0.25% 0.25%-1.5% 0.25% Gross of 20% Withholding tax TD Rates - 364 Days Amount BDO BPI MBT 1k < 10k 0.500% 0.375% 10k < 50k 0.500% 0.50% 0.50% 50k < 100k 0.625% 0.63% 0.75% 100k < 500k 0.750% 0.75% 0.88% 500k < 1M 0.875% 1.00% 1.00% 1M < 5M 1.000% 1.13% 1.125% Gross of 20% Withholding tax
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph KEEPING PACE WITH INFLATION Today’s 1Mil will be worth 1.6Mil in 10 years. If you want to maintain today’s cost of living into the future, then you must keep pace with inflation. 1,000,000 Today 1,628,895 in 10 years Assumed annual inflation is 5% 100
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph KEEPING PACE WITH INFLATION The returns on your savings will not keep pace with inflation. Save 1,000,000 in 1.125% (gross) TD 364days You will need 1,628,895 in 10 years to retain the same value But you can only accumulate 1,118,370 in 10 yrs 1.125% gross
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph HOW IT CAN HELP YOU
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph INVESTING IN POOLED FUNDS
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph ADVANTAGES IN POOLED FUNDS  Professional Management  Diversification  Liquidity  Safety  Daily Pricing  Potential Higher Returns
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph TYPES OF FUNDS 1. BOND FUND – invests in government and high-quality debt instruments 2. EQUITY FUND – invests in high-quality listed stocks 3. BALANCED FUND - invests in diversified portfolio of bonds and equities 4. MONEY MARKET FUND – invests in short term government securities (SDA), time deposits, short- term deposit agreements
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph POOLED FUNDS – MF VS. UITF Mutual Funds vs. Unit Investment Trust Funds Mutual Funds (MF) UITF Regulators SEC BSP You buy Shares (NAVPS) Units (NAVPU) Sellers Agent / MF Company Bank Personnel / Bank Fees Entry Fee Trust fee Early Redemption fee Early Redemption fee Administration fee You are called Shareholder Investor
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph ADVANTAGES / DISADVANTAGES  MF gains are tax exempt. UITF gains are subject to 20% withholding tax (case to case)  Most MFs have high entry fee. UITFs have no or very low management fee/charge.  MFs are more transparent with shareholder rights. UITFs are less transparent, less regulations
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph Philippine Mutual Funds / UITFs Mutual Fund Companies UITF ATR Kim Eng Allied Bank First Metro Asset Mgt Inc. (FAMI) Asia United Bank Philam (PAMI) Bank of Commerce Philequity (PEMI) BDO ALFM (BPI) BPI Sun Life (SLAMC) Land Bank Cocolife Metrobank Grepalife BPI Odyssey MAA PNB Prudentialife RCBC UCPB Unionbank www.pifa.com.ph www.uitf.com.ph http://www.bloomberg.com/markets/funds/country/philippines/
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS – Long Term Investment
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS A Mutual Fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base. The assets are then entrusted to a full time professional fund manager who develops and maintains a diversified portfolio of security investments.
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS Equity Funds  ATRKE • ATR KimEng AsiaPlus Recovery Fund, Inc. $ • ATRKE Alpha Opportunity Fund, Inc. • ATRKE Equity Opportunity Fund, Inc.  First Metro (FAMI)  Philam SGF (PAMI)  Philequity (PEMI) • Philequity Fund, Inc. • Philequity PSE Index Fund Inc.  ALFM • Phil Stock Index Fund • ALFM Growth Fund  Sun Life Equity (Sun Life)  United Fund, Inc (Cocolife)
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS Balanced Funds  Bahay Pari Solidaritas Fund, Inc. (ALFM)  ATRKE  ATRKE Philippine Balanced Fund, Inc.  Optima Balanced Funds  Cocolife Dollar Fund Builder, Inc.  First Metro Save and Learn Balanced Fund  Philam  NCM Mutual Fund of the Phils., Inc  PAMI Asia Balanced Fund, Inc. (USD$)  PAMI Horizon Fund, Inc.  Philam Fund, Inc.  Sun Life  Sun Life Prosperity Balanced Fund  Sun Life Prosperity Dollar Advantage Fund
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS Bond Funds  ALFM • ALFM Dollar Bond Fund, Inc. (USD$) • ALFM Euro Bond Fund, Inc. • ALFM Peso Bond Fund, Inc. • Ekklesia Mutual Fund Inc.  ATR KimEng Total Return Bond Fund Inc. (USD$)  Cocolife Fixed Income Fund, Inc.*  First Metro Save and Learn Fixed Income Fund,Inc.  Grepalife • Grepalife Bond Fund Corporation • Grepalife Dollar Bond Fund Corp. (USD$) • Grepalife Fixed Income Fund Corp.
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS Bond Funds  MAA  MAA Privilege Dollar Fixed Income Fund, Inc. (USD$)  MAA Privilege Euro Fixed Income Fund, Inc.  Philam  PAMI Global Bond Fund, Inc (USD$)  Philam Bond Fund, Inc.  Philam Dollar Bond Fund, Inc. (USD$)  Philequity  Philequity Dollar Income Fund Inc. (USD$)  Philequity Peso Bond Fund, Inc.  Prudentialife Fixed Income Fund Inc.  Sun Life  Sun Life Prosperity Bond Fund, Inc.  Sun Life Dollar Abundance Fund, Inc. (USD$)  Sun Life GS Fund, Inc.
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph MUTUAL FUNDS Money Market Funds  ALFM Money Market Fund, Inc.  First Metro Save and Learn Money Market Fund, Inc.  Philam Managed Income Fund, Inc.  Sun Life Prosperity Money Market Fund, Inc.
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph HOW DOES IT WORK?  You invest by buying shares or units (navps / navpu)  Minimum Initial Investment P5,000.00 – P10,000  Succeeding minimum investment P1k-P5k • NAVPS / NAVPU – changes daily
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph EXAMPLE For example 1/4/2013 Equity Fund P10,000 / P3.6598 (navps) = 2,732 shares
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph As of 2/26/2013 NAVPS is now P4.0375 2,732 shares x P4.0375 (NAVPS) = P11,030.45 10.30% in 2 months
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph SALES LOAD (CHARGES) Most mutual funds automatically charge a fee of 2% - 3.5% upon placement. For example – P10,000, charge is 2% = P200. Total money invested is P9,800.00 If withdrawn within 1 year, some still charge an exit fee of 1-2% of the total amount
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph HOW ARE NAVPS/NAVPU COMPUTED
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph FEES (UITF) BDO BPI MBT UBP ODYSSEY Trust Fee Trust Fee Admin/Handling Fee Equity 1.00% 1.50% 2.00% 2.50% 2.00% - 2.50% 1.50% of subscription amount Balanced 1.00% 1.50% 2.00% 2% on Gross Market Value of Equity; 1.00% on Gross MV of FI; 0.25% on total MV 1.50% 1.50% of subscription amount Bond 0.50% to 1.00% 1.50% 1.00% to 1.50% 1.00% 1.00% 1.00% of subscription amount Minimum Holding Period 30 days None 90 days 90 days Early Redemption Charge 0.50% of original participation amount 50% of income from redeemed amount 0.25% of redeemed amount or 500 whichever is higher
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph FEES (MF) Equity Funds FEES FAMI Philam (PSGF) Philequity Sun Life ATRKE ALFM Entry Fee 2.00% 3.00% 3.50% 2% if Front End 2.24% 0.00% 0 if Back End Exit Fee > 6 mos 1% > 6mos 2% > 1 year = 2% 0 if Front End 5% 1% > 6 months1 year < 2 years = 1.50% 5%, 4%, 3%, 2%, 1% > 2 years = 0 > 5 years = 0
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph UNIQUE SALES CHARGE ALFM (BPI) – No entry fee Sun Life has 2 ways of charging. Either Front End (FE) or Back End (BE) load. FE – 2% entry fee. No holding period, no exit fee. BE – No charges upon entry but with charges upon exit depending on the years invested. Best for long term. If withdrawn on 1st year - 5% 4th Year - 2% 2nd Year - 4% 5th Year – 1% 3rd Year - 3% 6th Years onwards - 0
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph IN CASE OF DEATH OF INVESTOR Documents needed to claim in case any one investor has died? • The required documents include: • Certified True Copy of the deceased’s Death Certificate • The court order allowing the Will and distributing the estate of the deceased to his heirs. If there is no Will: if applicable, a Deed of Extrajudicial Settlement of Estate • Affidavit of Publication of Notice to Creditors of deceased, if applicable • Marriage Contract, if claimant is the spouse • Birth Certificates of children, if these are the claimants • If Beneficiary is a minor, the court order appointing the guardian to take the place of the deceased trustor or trustee
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph TOP EQUITY FUNDS Top Equity Funds as of August 16, 2013 Rank Mutual Fund YTD Gross Return 1 BDO Equity UITF 15.23% 2 BPI Phil Stock Index Fund (Equity) 14.21% 3 ATRKE Equity Opportunity Fund (Equity) 14.03% 4 Metro Equity Fund UITF 13.51% 5 Philequity PSE Index Fund Inc. (Equity) 12.56% 6 ATRKE Alpha Opportunity Fund, Inc. (Equity) 12.54% 7 Philequity Fund, Inc. (Equity) 11.70%
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph TOP MUTUAL FUNDS YTD Top 10 Mutual Funds as of August 16, 2013 Rank Mutual Fund YTD Gross Return 1 FAMI Bond Fund (Bond) 19.72% 2 Philequity Peso Bond Fund (Bond) 17.79% 3 Optima Balanced Fund (Balanced) 14.71% 4 BPI Phil Stock Index Fund (Equity) 14.21% 5 ATRKE Equity Opportunity Fund (Equity) 14.03% 6 ATRKE Philippine Balanced Fund, Inc. (Balanced) 13.18% 7 Philequity PSE Index Fund Inc. (Equity) 12.56% 8 ATRKE Alpha Opportunity Fund, Inc. (Equity) 12.54% 9 Philequity Fund, Inc. (Equity) 11.70% 10 Philam Bond Fund, Inc. (Bond) 10.11%
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph WHICH IS BETTER MF / UITF or Direct Stocks Investment??
  • Financial Planning Philippines Mutual Funds, Insurance, Educational Plan, Stocks, Investments ww.FinancialPlan.ph Basic Steps to Financial Security