It’s my pediatrician this time .

“Hi Salve. You know what, I’m keeping my mutual fund investments. After all, I’m investing for the long-term naman eh. As long as the value of my shares don’t go down to zero!,” she said.

This appears to be a common concern among mutual fund investors, who have watched the net asset value per share (NAVPs) of their mutual fund holdings drop to precarious levels this year. Many have decided to stop checking the values every day as the movements make them nervous. Others have decided to withdraw their investments altogether even at a huge loss.
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Official and audited figures on Philam Asset Management Inc. (PAMI)—mutual fund business–investment portfolio as of Aug. 31:

GSIS Mutual Fund

Top 10 Holdings:
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The Brad Pitts of the world couldn’t have unglued me from Bloomberg television and my computer since yesterday, watching every little blip of news regarding the debacle happening in Wall Street and thinking about the ramifications locally.

Unlike Lehman Brothers, it seems that American International Group (AIG) has friends in high places. So far, it has been allowed by regulators to raise another $20 billion by borrowing from its subsidiaries and no less than Federal Reserve officials have asked Goldman Sachs and JPMorgan Chase to set up a $75-billion facility to stave off a crisis at AIG.

Gov. David A. Paterson of New York said the magic words: “It’s a systemic risk.” Meaning he thinks if the government let’s AIG fail, this could shake the entire financial system. Having said that, the government has shown reluctance in bailing out any financial firm using public money, of course, so expect more creative means to help out financial companies in trouble.
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Mutual funds are sold as the investment for the masses, allowing ordinary Filipinos with as little as P5,000 to get their feet wet in an instantly diversified portfolio of stocks, bonds, or both.

It was a little bit of a surprise to find out that the average mutual fund investor as of June 30, 2008 has a placement of roughly P483,820 in mutual funds — not your average Filipino, obviously. That’s an impressive little factoid.

Based on official figures from the Investment Company Association of the Philippines (ICAP), this figure is lower than the average investment size of P580,843 in December 2007, which is again lower than P622,079 in June 30, 2007.
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Sexy mutual fund returns are a sure way of getting most people’s attention. With the recent turbulence in the equities market, however, many realize that it’s also important to look at how often a fund outperforms the index, and not just by how much.

Of course, the sweetest thing would be to find a fund that outperforms with great returns all the time! But perhaps that’s like looking for that dream girl or boy. :-)

Read my article on how to look for a mutual fund you can count on here.

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For Filipinos who are just starting to get their long-term savings acts together, mutual funds have slowly become the investment instrument of choice. It’s not very hard to see why. For a minimum of P5,000, small savers get a professional fund manager working to grow their little nest egg. (Photo of cuckoo’s nest courtesy of Michelle Morelos)

Businesswoman Liah Alcantara is confident returns from the company she has nurtured will help her retire perhaps better than she initially expected. Lately, however, she realized she needed to “put her eggs in different baskets” and invested some of her extra money in mutual funds.

She says she is not a financial person and knows little about how the market works. After listening to her financial planner, however, she decided to make a go for it. Next steps: learning to keep calm amid the gyrations of the market and decoding the mutual fund table.

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When it comes to saving and investing money, people are drawn towards figures that measure returns in cold, hard figures. Returns become some sort of Holy Grail that indicates whether an investment is any good, regardless of volatility and default risk.

In this exclusive interview with Karen Liza M. Roa, president and chief executive officer of Philam Asset Management, Inc. (PAMI), Roa says stability of the company and a well-defined investment process should also be topmost consideration for serious investors.

PAMI is one of the top three players in the mutual fund industry in terms of size. Learn about several sticky issues about mutual fund investing in this interview, like costs of investing, clues on upcoming new funds, the difference between mutual funds and UITFs, and what is the best strategy if you decide to invest in this instrument. MoneySmarts asks the hard questions so that you will be an informed investor. Happy reading!

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This post kicks off a MoneySmarts series on mutual funds. As I promised in a previous post, I will help investors pound on the doors of mutual fund companies and get answers on issues we all need to understand to make informed decisions about our investments.

So I interviewed PhilEquity Management Inc. president Edmundo Marco P. Bunyi. I asked some of you to be a part of the interview by soliciting your questions. Take a look at how the interview went, and, as usual, you are welcome to share your views and comments.

Bunyi: I read your blog and the comments about PhilEquity and I am pleased that more people are interested in investing and investing wisely. Let me just share with you candidly what PhilEquity is all about. The story of PhilEquity is all about its fund manager, Wilson Sy. You know Wilson Sy – he was former chairman of the Philippine Stock Exchange, a totally low-profile guy, a very good listener, and exceptionally talented. Are you familiar with the mosaic theory? He has a way of putting things together — information that are public, non-public and non-material — in a way that can make money in the market. He was a phenomenal market player and soon colleagues, friends and associates asked him to invest for them too. Eventually, he decided to set up a fund and personally managed it – that was in 1994. That was how PhilEquity began.

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