1st Quarter and YTD Performance of Mutual Funds

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Here are the 1st quarter returns of Mutual Funds in the Philippines.  Aside from the quarterly returns, I have also included the Year-to-Date (YTD) return to show you how the funds performed in just a span of one week! (March 31, 2011 - April 6, 2011)  

If you have been following the stock market, you would know that the market gained around 7% in just a week.  More on how this affects the performance of certain mutual funds later.


   Primarily invested in PESO securities
                                                                                         1Q (March, 31, 2011)            YTD (April 6, 2011)
ATR KimEng Equity Opportunity Fund, Inc.                   -5.46%                                   -2.01%
First Metro Save and Learn Equity Fund, Inc.                -4.86%                                    -1.96%
Philam Strategic Growth Fund, Inc.                                 -2.78%                                     0.64%
Philequity Fund, Inc.                                                          -1.52%                                      2.01%
Philequity PSE Index Fund Inc.                                          -1.31%                                     2.12%
Philippine Stock Index Fund Corp.                                    -4.18%                                     -0.77%
Sun Life Prosperity Phil. Equity Fund, Inc.                      -1.18%                                     2.62%
United Fund, Inc.                                                                  -2.11%                                     -0.48%

   Primarily invested in Foreign currency securities

ATR KimEng AsiaPlus Recovery Fund, Inc.                     -0.05%                                    3.12%


   Primarily invested in Peso securities      

ALFM Growth Fund Inc.                                                      -6.74%                                      -3.97%  
Bahay Pari Solidaritas Fund, Inc.                                        -2.79%                                      -0.21%
First Metro Save and Learn Balanced Fund Inc.              -5.16%                                      -2.7%
GSIS Mutual Fund, Inc.                                                        -2.82%                                        0.43%
MFCP Kabuhayan Fund, Inc.                                              -5.9%                                        -3.58%
NCM Mutual Fund of the Phils. Inc.                                  -2.86%                                      -0.29%
Optima Balanced Fund Inc.                                                 -2.29%                                        0.31%
Philam Fund Inc.                                                                    -2.82%                                       0.2%
Sun Life Prosperity Balanced Fund, Inc.                            -1.51%                                      1.86%

   Primarily invested in foreign currency securities

Cocolife Dollar Fund Builder, Inc.                                       0.68%                                         1.05%
Sun Life Prosperity Dollar Advantage Fund Inc.             0.19%                                          0.53%


   Primarily invested in Peso securities

ALFM Peso Bond Fund Inc.                                                  -0.37%                                       -0.21%
Cocolife Fixed Income Fund Inc.                                             1.33%                                        1.41%
Ekklesia Mutual Fund Inc.                                                      -1.28%                                        -1.22%
First Metro Save and Learn Fixed Income Fund Inc.          -0.13%                                        -0.1%
Grepalife Bond Fund Corporation                                          -0.24%                                        -0.14%
Philam Bond Fund Inc.                                                             -1.32%                                        -0.88%
Philequity Peso Bond Fund, Inc.                                            -0.82%                                        0.31%
Prudentialife Fixed Income Fund Inc.                                     -3.01%                                        -2.47%
Sun Life Prosperity Bond Fund Inc.                                       -1%                                              0.43%
Sun Life Prosperity GS Fund, Inc.                                           -3.06%                                        -1.39%

   Primarily invested in foreign currency securities

ALFM Dollar Bond Fund Inc.                                                 -0.04%                                          0.14%
ALFM Euro Bond Fund Inc.                                                   -1.73%                                          -1.79%
ATR KimEng Total Return Bond Fund Inc.                         -1.35%                                          -1.26%
Grepalife Dollar Bond Fund Corp.                                          -0.31%                                          -0.18%
Grepalife Fixed Income Fund Corp.                                        -0.22%                                          -0.02%
MAA Privilege Dollar Fixed Income Fund, Inc.                   -4.76%                                          -4.49%
MAA Privilege Euro Fixed Income Fund, Inc.                     -2.9%                                             -3.34%
PAMI Global Bond Fund, Inc.                                                 0.41%                                            0.32%
Philam Dollar Bond Fund Inc.                                                  -0.93%                                          -0.94%
Philequity Dollar Bond Fund Inc.                                            0.02%                                            0.17%
Sun Life Prosperity Dollar Abundance Fund Inc.                 -0.9%                                            -0.82%


ALFM Money Market Fund Inc.                                               0.41%                                          0.48%
ATR KimEng Money Market Fund Inc.                                   0.34%                                           0.35%
First Metro Save and Learn Money Market Fund Inc.           0.29%                                          0.32%
Philam Managed Income Fund Inc.                                           0.14%                                           0.14%
Sun Life Prosperity Money Market Fund Inc.                         0%                                                0.01%

Source: Investment Company Association of the Philippines (ICAP)



Disappointing performance across the board for Mutual funds in the first quarter with most funds giving out negative returns.  Most affected are EQUITY-BASED and BALANCED Funds as investor sentiment in the first quarter were highly dampened by the crises in Japan and MENA (Midlle East and North Africa).  A lot of Stock markets worldwide also corrected after performing really well in 2010.


The reason why I included the returns of the mutual funds after only a week was to show the volatility of each type of fund.  The 2nd quarter looks very promising for stock markets with our very own PSEi gaining around 7% in just a week.  This brought most EQUITY-BASED funds to regain some of their losses and return to positive territory.  The same results were reflected in BALANCED Funds because part of these funds are also invested in the stock market.  However, the percentage gains are not as big as that of Equity-based funds.  FIXED INCOME funds and MONEY MARKET funds have remained fairly stable showing no significant correlation with the improvement of the stock market index.  This is because these funds don't invest in the stock market.  

In a span of one week, the Net Asset Value per share (NAVPS) of Equity-based and Balanced funds moved significantly, making their prices very volatile.  This makes them risky in nature.  On the other hand, Fixed Income funds and Money Market funds have not changed relatively in a week.  This makes them less risky in nature.


You might be wondering how BOND Funds or FIXED INCOME Funds can give negative returns considering that these funds are primarily invested in fixed-income instruments like corporate bonds, special deposit accounts, and treasury bills.  I believe the negative returns can mainly be brought about by multitude of investors redeeming their contributions at the same time.  This can happen when investor sentiment is low and investors start moving their funds to less risky investments like bank deposits.  What happens is, fund managers will have to sell these notes and bonds on a discount just so they can fund the redemptions of investors.  This can cause the fund to lose some money.

Another possible reason is the high management fees of these funds.  The fees are computed as percentages of the fund's total capitalization and not just a percentage of the gains.

And since these investment instruments are traded as well, prices also fluctuate depending on the current interest rates, investment ratings, credit ratings, and the corporate standing of the company in the case of corporate bonds.  

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