Showing posts with label Investments. Show all posts
Showing posts with label Investments. Show all posts
BPI Feeder Funds
I am a Money Magnet! We are Money Magnets!
Not very long ago, Fund-of-Funds type of UITFs were introduced in the market, Now, we have a new type of UITF funds called FEEDER Funds. BPI has just launched its BPI US EQUITY INDEX FEEDER FUND and BPI EUROPEAN EQUITY INDEX FEEDER FUND.
If you are interested in learning more about feeder funds and these new BPI UITF investment products, read on.
Philippines is now Investment Grade
The Philippines is Now Investment Grade
March 27, 2013
- The Philippines got its first ever investment grade debt rating from global credit rating firm Fitch.
- Fitch upgraded the Philippines sovereign credit rating to BBB- from BB+
- An investment grade rating tells investors it is safe to do business in the country and encourages them to put huge capital in the country.
"Promising Returns" Variable Unit Linked Insurance and the PSEi
As we were browsing entries in Facebook, we came across this article entitled "Philamlife lures Pinoys with new insurance-investment schemes." Here's an excerpt from the news article:
Philamlife Lures Pinoys with New Insurance-Investment Schemes
by Edgardo Tugade December 3, 2012.
source: GMANews
The Philippine American Life Insurance Co. (Philamlife) on Monday said it was mostly foreigners who took advantage of the growing Philippine economy by directly investing in industries, while Filipinos kept their money in low-yielding accounts.
Thus, the insurer is introducing new products to help Filipinos benefit from the economic growth of 7.1 percent as measured by the gross domestic product in the third quarter, the fastest growth in South East Asia.
The company is promising returns of at least 8 percent in an insurance and investment plan.
Rex Mendoza, Philamlife president and chief executive officer, said most Filipinos placed their hard-earned money in savings or time deposits which earn 0.375 percent and 2.75 percent per year, and cannot even catch up with the benign inflation rate at 3.1 percent.
As you probably know already, the Philippines Stock Exchange Composite Index (PSEi) has reached a new all-time high of 6,171 this January 2013. As a result, insurance and investment companies are banking on this positive development and are aggressively marketing their investment products. (Read more after the jump)
BPI UITF News
Here's some good news for those who want to invest with BPI's Unit Investment Trust Funds (UITF). I just received information that BPI has reduced the minimum initial investment and maintaining balance amount for their UITFs. You can now invest in Peso-denominated funds with an initial investment of only PHP 10,000, down from PHP 50,000 previously. For Dollar-denominated funds the minimum initial investment is now at USD 500, down from USD 1,000 previously. This is certainly good news as a lot of us can now invest with the Philippine's largest bank even if we only have 10,000 pesos.
The minimum transaction amount for additional contribution and partial redemption has also been reduced from PHP 10,000 to PHP 1,000 for peso-denominated funds, and maintained at USD 200 for dollar-denominated funds.
This will certainly encourage inflow of new money to the funds granting the funds more flexibility and access to more investments. A possible drawback though is the entrance of "weaker hands" in the fund. Investors who are risk averse that would sell right away at any sign of decline in the fund's value. In this regard, if you own units in any BPI UITF and you don't agree with the changes they've introduced, the bank is allowing you to redeem your participations free of any penalty or charges until November 19, 2010.
Learn more about UITFs through these articles:
UITF Performance as of October 2010 (3rd Quarter)
Do you hold Unit Investment Trust Funds (UITF) in your portfolio? Then you would be interested how your choices compare with other UITFs in the market. Personally, I have been investing more in Mutual Funds but I do have UITFs in my portfolio as well. I'll tell you all about them after the jump. Here are the year-to-date returns of the different UITFs as of October 2010.
PinoyMoneyTalk has summarized everything for us so I won't be repeating the data here again. Instead, I would just highlight the top performers for each category and add a few of my comments as well. I love PinoyMoneyTalk, it's a very informative site. You should subscribe to it as well. ^^ Click on this link to read the post from PinoyMoneyTalk.
Here are the highlights!
PESO EQUITY FUNDS
(Primarily invested in Peso securities)
1. Unionbank Large Cap Equity Philippine Equity - 78.91%
2. UCPB United Equity Fund - 60.99%
3. ING Philippine High Conviction Equity Fund - 60.30%
Note: Included in PinoyMoneyTalk's list are the BPI Global Equity Fund and the ING Asia Pacific High Dividend Equity Fund. These funds are not Peso funds but actually are US Dollar funds. That's why they have lower returns compared to Peso Equity Funds (International markets have not been performing as good as the Philippine Stock Market). If you are looking to diversify into Global Equity markets but you don't know how to invest in those markets directly, these 2 funds would be a good way to get exposure in those markets.
Updated year-to-date returns for these 2 funds are as follows:
ING Asia Pacific High Dividend Equity Fund - 11.32% (as of Oct. 7, 2010)
BPI Global Equity Fund - 5.55% (as of Oct. 8, 2010)
If you noticed, they have considerably increased compared to the returns published at PinoyMoneyTalk. This is because for the past couple of weeks, the US market and Asian markets have been performing well. Being Equity-based funds, these tend to be very volatile.
PESO BALANCED FUNDS
(Invested in both debt and equity securities)
1. BDO Peso Balanced Fund - 35.79%
2. UCPB United Balanced Fund - 33.15%
3. BPI Balanced Fund - 28.96%
PESO BOND FUNDS
A. Long term funds (More than 5 years)
1. UBP Long Term Current Income Portfolio - 8.80%
2. RCBC Rizal Peso Bond Fund - 6.50%
3. Landbank GS-FI Fund - 4.22%
B. Medium term funds (up to 5 years)
1. ING Peso Bond Fund - 9.81%
2. UBP Philippine Peso Bond Portfolio - 9.53%
3. BDO Fixed Income Fund - 8.51%
C. Intermediate term funds (up to 3 years)
1. UBP Current Income Portfolio (T-Bills 91) - 8.84%
2. UBP Infinity Prime Fund - 7.40%
3. BDO Peso Bond Fund - 6.80%
In these times when the dollar is skyrocketing down against the Peso, it might be better to hold on to them and wait for the rate to go up before exchanging. We don't have the comparative year-to-date returns for the different Dollar-based funds but we can give you two of our personal choices - the ALFM Dollar Bond Fund and the ING Philippine Dollar Bond Fund.
DOLLAR-BASED FIXED INCOME FUNDS
(Year-to-date returns as of Oct. 8, 2010)
ALFM Dollar Bond Fund - 6.68%
ING Philippine Dollar Bond Fund (PDBF) - 17.42%
The ING PDBF is performing impressively! For a dollar-based fund to give a double digit return is simply amazing. Regular dollar time deposit rates are only at around 1-3%. We have been invested in it for 3 years already and so far total return is around 34%. That's at least a return of 10% a year. We are very grateful.
Lastly, please note that the ALFM Dollar Bond Fund is a Mutual Fund and not a UITF. Read about Mutual Funds and UITFs here.
Happy investing Money Magnets! And keep on attracting money. ^^ Have you been singing our theme song? We certainly have!
Types of Investments (Financial Asset Classes)
I am a Money Magnet! We are Money Magnets!
According to Francisco Colayco, financial guru and author of Making Money Work Pera Mo Palaguin MO 2!, there are three general types of investments. These are lending investments, ownership investments, and speculative investments. Read on to learn more about these investments.
Lending Investments
These investments lend the money you invest in to them to borrowers as loans. Your investment earns from the interest charged to the borrowers for the use of your money. Examples of this type of investments are bonds (government or corporate bonds), bank deposits, and pension plans. These investments have relatively low returns for the short-term but may exceed inflation rate in the long-term. These investments are recommended for those who need regular and definite income. It is also best for older people who can take less risk due to old age.
Ownership Investments
As the name suggests, these investments allow you to be part owner of a business or company. They are classified as high risk investments. Your money earns only if the business or company goes up in value. In addition, gains and losses are only realized when you decide to sell them. Examples of this type of investments are stocks, mutual funds, unit investment trust funds, real estate, and your own business. These investments are recommended for young investors in their 30's or 40's.
Speculative Investments
Speculative investments are investments that are highly speculative - investors get into these investments hoping that they will hit the jackpot. Investors take the plunge and hope that the investment will eventually increase in value in the future. Information on how one can generate profit from these investments are usually vague and incomplete. Due to the nature of the investment, it possesses a very high risk. Examples of this type of investments are investment in assets, properties or businesses that may be illegal, and gambling activities like Lotto.
I personally would not recommend Money Magnets to invest in speculative investments. These are very risky and the chances of gaining returns from this type of investments are very slim. The more you deal with them the greater is the probability of losing your money. For capital growth, I suggest you go for ownership investments. If you are in your 30's then time can be your friend. The more time you have to invest in these, the less risky they will be. However, don't forget to leave some money for emergency purposes as well. Invest these on lending investments which are highly liquid (can be easily converted to cash). Happy investing to us all!
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Investing in Mutual Funds and UITFs
Mutual Funds and Unit Investment Trust Funds (UITFs) have become the most popular investments in recent years. In the Philippines, I think this is largely due to the efforts of financial gurus Francisco Colayco (author of the Pera Mo Palaguin Mo - Wealth Within Your Reach books ) and Efren Cruz (author of Pwede Na! The Complete Pinoy Guide books). Here's a primer on what Mutual Funds and UITFS are.
What is an investment fund?
A fund, or an investment fund, is a collection of stocks, bonds, or other securities (a portfolio of investment s) owned by a group of investors and managed by a professional investment company.
What are Mutual Funds and UITFs?
Mutual Funds and UITFs are both investment funds. These funds pool the money of various investors into a single portfolio which are managed by professional investment teams. By pooling funds together, the fund is able to invest in high yield investment products which would have been unavailable to small capital investors. This is what makes Mutual Funds or UITFs attractive. In concept both investment instruments are the same.
Difference between Mutual Funds and UITFs
The following chart (from ING) illustrates the difference between a Mutual Fund and a Unit Investment Trust fund. A mutual fund is managed by an investment company while UITFs are managed by the Trust Department of a bank. A mutual fund is regulated by the Securities and Exchange Commission (SEC) while a UITF is regulated by the Bangko Sentral ng Pilipinas (BSP). Participation in a UITF earns you "units" while participation in a mutual fund earns you "shares". They are called differently but they have the same meaning.
An important thing to note in this chart is that although both investment instruments are not required to keep reserves at BSP, setting up a mutual fund requires an initial paid-up capital of 50 million pesos. This makes mutual funds more attractive because with 50 million pesos in initial capital, the investor is already guaranteed a large pool of funds for investments.
UITFs are fairly young investments. It was only in September 3, 2004 that BSP released Circular No. 447, paving the way for the creation of UITFs. UITFs were created to reform the Fund industry and bring it to global standards. This means using the Market to Market (MTM) valuation method which accounts all gains and losses of the assets of the fund on a daily basis, reflecting the actual net worth of the fund for each trading day. (As opposed to the Accrual method where in gains and losses are only accounted for once they occur.)
Advantages of Investing in Mutual Funds or UITFs
Here are a few reasons why investing in Mutual Funds and UITFS are beneficial:
- Funds are professionally managed. A team of financial experts does the researching and monitoring for you. This is highly beneficial for individual investors who are not financially adept or have little time to monitor their investments. As a trade off, a management fee is taken from the fund usually on a per annum basis. (Management fee rates differ for every fund.)
- Fund portfolios are highly diversied. Diversification reduces the risk of an investment portfolio. (I will explain more on this on a future post about the types of mutual funds and UITFs.)
- Investing in a fund is affordable. With a minimum investment, you allow your investment to potentially earn higher.
- Funds are highly liquid compared to stocks and bonds.
I think the greatest risk involved in investing in Mutual Funds and UITFs is the fact that yield/return and performance are not guaranteed. This means that the fund's value go up and down as the market does. Furthermore, your investment is not insured by the fund manager or the PDIC.
Next week, watch out for my post on the types of Mutual funds and UITFs available and on which investment is best for you. Don't miss the sequel to this entry by subscribing to my email list for free.
Investsment Opportunity: Fixed Rate Bonds (Globe Telecom)
Interest rate 7.5% for 3 Year bonds
8.0% for 5 Year bonds
Minimum Investment PhP 50,000 (in increments of
PhP 10,000 above minimum)
Offer Period February 12-19, 2009
Issuer: Globe Telecom Inc.
Issue Size: PhP 3 Billion in 3 Year and 5 Year Bonds
Over Subscription Option: Up to PhP 1 Billion
Use of Proceeds: Capital Expenditures
Interest Payment: Quarterly
Maturity: 3-Year Bonds - February 2012
5-Year Bonds - February 2014
Issuer's Early Redemption Option:
For 5 Year Bonds on the 3rd anniversary of Issued Date
Lead Underwriters: BDO Capital Corp.BPI Capital Corp.
First Metro Investment Corp.
Co-Lead Underwriter: RCBC Capital Corp.
Participating Underwriter: Vicsal Investments Inc.
Credit Rating: PRS Aaa (Highest credit mark)
Philippine Rating Services Corp.
(source)
Additional news about the company that might be of interest to you follows:
According to GMANews.TV
"Globe has earlier said that it will spend anywhere between $350 million to $400 million in capital outlay this year. Of the amount, $130 million will be spent to fund its core 2G network expansion and $150 million for its consumer broadband including 3G.
Its corporate wireline data will be given $25 million, the same amount allotted for its international cable facilities. Support capital expenditures will be given $20 million.
Last year, the company spent P19.9 billion, 44 percent higher than 2007’s P13.8 billion.
Globe has reported that it earned P11.3 billion last year, 15 percent lower than P13.3 billion in 2007 as revenues fell to P55.64 billion from P56.41 billion"
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Security Bank: Lower Tier 2 Subordinated Notes
Attended the Security Bank Lower Tier 2 Subornidated Notes Presentation at Marco Polo Hotel Davao. (Details as follows)
Security Bank is offering to the general public a minimum of PhP 3.0 billion worth of Lower Tier 2 Subordinated Notes ("LT2 Notes"). They will bear a fixed interest rate for the first five (5) years of the life of the LT2 Notes. Interest rate is not yet decided as of presentation time but it is expected to be around 8.5%.
Issue Rating: Fitch National Rating: A+ (phl)
Tenor: 10 years callable on the first banking day after the 20th Interest period.
Use of Proceeds: To refinance the PhP3.0 billion LT2 callable on 29 January 2009 and to further increase and strengthen the Bank's capital base.
Interest Periods: Quarterly
Interest Rate Basis: 30/360
Reset Date: 5 Years after Issue date, if Redemption Option not exercised.
Minimum Investment: PhP 500,000 with increments of PhP 100,000 thereafter.
Offer period: November 17, 2008 ~ November 28, 2008 (may be closed earlier)
What are Lower Tier 2 Subordinated Notes?
A subordinated debt is a debt that is junior in the right of payment of principal and interest to all depositors and other creditors of the Issuing Bank, except those creditors expressed to rank equally with, or behind holders of the subordinated debt. Therefore, LT2 Notes rank below bank deposits and other senior debt but have priority over common and preferred shares.
Should the Issuing Bank become insolvent, the subordinated debt shall be satisfied only after payment of other ordinary debts. LT2 Notes are not insured by the PDIC.
What are the benefits of investing in Lower Tier 2 Notes?
email: inquiry@securitybank.com
Trunkline: (632) 867-6788
Issue Rating: Fitch National Rating: A+ (phl)
Tenor: 10 years callable on the first banking day after the 20th Interest period.
Use of Proceeds: To refinance the PhP3.0 billion LT2 callable on 29 January 2009 and to further increase and strengthen the Bank's capital base.
Interest Periods: Quarterly
Interest Rate Basis: 30/360
Reset Date: 5 Years after Issue date, if Redemption Option not exercised.
Minimum Investment: PhP 500,000 with increments of PhP 100,000 thereafter.
Offer period: November 17, 2008 ~ November 28, 2008 (may be closed earlier)
What are Lower Tier 2 Subordinated Notes?
A subordinated debt is a debt that is junior in the right of payment of principal and interest to all depositors and other creditors of the Issuing Bank, except those creditors expressed to rank equally with, or behind holders of the subordinated debt. Therefore, LT2 Notes rank below bank deposits and other senior debt but have priority over common and preferred shares.
Should the Issuing Bank become insolvent, the subordinated debt shall be satisfied only after payment of other ordinary debts. LT2 Notes are not insured by the PDIC.
What are the benefits of investing in Lower Tier 2 Notes?
- Higher Yield. The yields of LT2 Notes are usually higher than the rates on government securities and bank deposits. They yields of LT2 Notes are also tax exempt for individual investors and tax exempt institutions.
- Step-up rate if call option of the Notes is not exercised. The LT2 Notes carry a call option which allows the Issuing Bank to redeem the notes before maturity subject to certain conditions. If the Issuing Bank does not redeem the LT2 Notes, a step up interest rate allows Noteholders to enjoy potentially a higher rate.
- Liquidity mechanism for investors. The LT2 Notes may be traded in the secondary market subject to prevailing market prices. Negotiations and transfers of the LT2 Notes will be done through the Market Maker which is tasked to effect the secondary transfer and registration of the LT2 Notes in cordination with the Registry.
- Independent rating by a third-party rating agency. Issuing Banks that offer Tier 2 Notes to the public are required to be rated by an independent rating agency recognized by the BSP. Such rating provides an independent and professional assessment of the Issuer's credit worthiness.
email: inquiry@securitybank.com
Trunkline: (632) 867-6788
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PSBank Time Deposit Rate
PSBank's Time Deposit Rates
Rates are on a per annum basis and net of documentary stamp taxes.
Deposit Amount 30 days 90 days 180 days 1 year
100,000-499,999 3.750 3.750 3.875 4.250
500,000-999,999 4.0 4.0 4.125 4.50
1M - 4.99M 4.750 4.750 4.875 5.250
5.0M and up 5.0 5.0 5.125 5.50
Premium Time Deposit Interest rate is at 6.5% p.a. net of documentary stamp tax and 20% witholding tax.
Minimum amount for individual account is P50,000, holding period 5 years.
Member PDIC. Maximum deposit insurance for each Depositor is P250,000.
Visit there site at www.psbank.com.ph
LBC Bank Royal Earner Special Savings
LBC Bank Royal Earner Special Savings Rates
Deposits start at P10,000 only.
If you have low risk-tolerance and is looking for an investment vehicle where you can safely put your hard earned money then this investment might be for you.
Term Interest Rate
2 years 7.750 %
3 years 8.500 %
4 years 8.750 %
5 years 9.000 % (Tax Free if maintained for 5 years)
Email: time.deposit@lbcbank.ph for more inquiries.
Domestic toll-free number: 1-800-1-888-86-86
Metro Manila: (02) 899-86-86
Member of PDIC. Deposits insured up to P250,000 per depositor.
-0-
Sample computations:
For 2 years:
Php : 10,000.00
Term : 30 days
Interest : 7.75%
Tax : 20% Monthly Interest before Tax =
[10,000.00 x 7.75% x 30 (days)] / 360 days = Php64.58
= Php64.58 x 20%
= 12.92
= Php64.58 – Php12.92
= Php51.67 (interest monthly)For 5 years (tax free):
Php : 10,000.00
Term : 30 days
Interest : 9.00%
Tax : FREE
[10,000.00 x 9.00% x 30 (days)] / 360 days = Php75.00
Total Interest after 5 years =
= Php75.00 x 60 (months)
= Php4,500.00 (earn interest for 5 years)
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