Mutual Funds

[xxxpert]

Yes, you can go to the Philam office in L.P. Leviste St. or if you want I can help you. My office is at 5F Salustiana T. Dy Tower in Paseo(corner Perea). You will have to fill out redemption form and it takes T+3 days for settlement. Check issued under your name and you can encash it at Philam Savings Bank. If you want my assistance, send me a PM. If not, it is  still the same process.

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Thanks pare...

 

:cool:

[financial advisor]

Marked To Market FAQs

1. How is Marked-to-Market (MTM) valuation different from the Accrual valuation?

 

The Accrual Method

 

Based on the accounting terminology, accrual simply means recognizing expense or income as they become due. The Philam Dollar Bond Fund, Inc. (PDBF) for example, uses the accrual method in recognizing its earnings. This means that all earnings derived from the instruments it invests in are recognized or “booked” as they fall due.

 

For instance, a bond held by the PDBF earns an indicated interest or coupon rate of 12%. In this case, the accrual of interest income becomes automatic. The accrued earning should be 1% per month or 12% divided by 365 days is the earning per day times the face value of the bond.

 

Therefore, the accrual method disregards the interest rate situation that impacts the prices of the bonds or the movement of it, so much so, if the holder of the bond / fixed income instrument decides to hold the instrument until maturity.

 

 

The MTM Method

 

In contrast to the accrual method, “Marked-to-Market” is sensitive to the movement of interest rates from the day the investor purchases a bond. MTM, from the words itself means that the bond / fixed income instrument is “priced” based on market. Meaning, the bond will be accorded with a market value depending on the movement of the interest rates or, the adjustment of the credit rating of the bond issuer.

 

In this method, however, the pricing of such a bond should be systematic and centralized. An exchange is imperative to be able to price such security. Otherwise, a bond will carry various prices depending on supply and demand, location, intermediary, and other variables.

 

In the MTM method, the indicated interest rate is not so relevant unlike in the accrual method. The intention of this method is to be able to price the securities depending on the movement of the interest rates.

 

Example is that a bond has an indicated interest of 12% at the time of issuance. At this time it has a 100% value or price. Upon movement of interest rates or some other factors that will affect interest rates, the “price” of the bond will fluctuate. If say, interest rates go up to 13%, the price will go down. This way, it will compensate the difference of the rates in order to accommodate the sale of the original bond. On the other hand, if the rate goes down to 10%, then the “price” of the bond will go up.

 

 

2. Why does this have to be implemented?

 

MTM is a regulatory requirement. Hence it has to be implemented in order to comply with the International Accounting Standards. In more matured or sophisticated economies like the US and Europe, MTM is being practiced to value fixed-income securities.

 

 

3. What is the impact of MTM on the funds?

 

The valuation of the Net Asset Value Per Share (NAVPS), particularly on the BOND FUNDS would be affected. Since the bonds that the fixed income funds are invested in will be valuated based on current market prices and no longer on accrual valuation, the NAVPS may have chances in going up and down on a daily basis (short-term volatility), unlike the constant increase it had during accrual valuation.

 

For the EQUITY LACED FUNDS, however, the impact will be quite minimal since these funds already have the volatility brought about by their equity positions.

 

 

4. When will Philam Bond Fund (PBF) and Philam Dollar Bond Fund (PDBF) implement the MTM valuation?

 

Pursuant to a letter from the Securities and Exchange Commission dated July 22, 2005, all mutual funds are directed to comply with IAS 39 adopting the MTM valuation for all fixed income securities by October 1, 2006. All distributors & shareholders will be informed via direct mail, publication and telemarketing two (2) weeks before the implementation.

 

 

5. What are the preparations of PAMI for the upcoming shift in valuation from ACCRUAL to MTM?

 

PAMI started rebalancing the fixed income portfolios of all the funds last year. While rebalancing of portfolio somewhat affected the yields of the fund, it also did well to manage the risk of higher volatility when the funds shift to MTM. PAMI’s strategy now is to rebalance the portfolio in such a way that there would be little or no changes in NAVPS when the funds change valuation.

 

 

6. If MTM is to be implemented on all the funds, does it mean that our bonds funds are to be treated like and will behave like stock funds?

 

Technically, yes, since bond prices and values will be based on the current values that the market determines. The fund managers will have to be more astute and alert in making investment decisions. In an accrual method, as explained, the fund manager can hold on to a particular security up to its maturity. In MTM it is crucial for the fund manager to trade (buy or sell) the funds’ security to realize gains or cut losses due to unpredictable market conditions – same with equity investments.

 

However, while the bonds are being actively traded like stocks, this does not mean that they are as volatile as equity securities. It should be noted that while MTM will trigger short-term volatilities on bond portfolios, bonds are still more conservative than stocks. Also, bonds still generate the annual coupon payments that will cushion down sided volatility.

 

 

7. Given that MTM is to be implemented, how will the competition be like?

 

The skill of the fund managers will have a big impact on the performances of the several mutual funds available in the market. It is also important to look at how well the fund managers will manage the risk for their investors /shareholders. Much like investments in stocks or equities where fund managers can invest in growth companies with higher risk and higher returns, in fixed income investing; the fund manager can also invest in longer term securities with higher volatility in terms of price. Prudence and a good foresight are necessary to achieve higher returns in trading fixed-income instruments.

 

 

8. How will MTM affect our projected yields? Will it give us higher or lower yields? Will this method technically make us earn more?

 

MTM valuation will not give us the confidence to project yields the way we project yields under accrual valuation. However, targets will still be provided but on the basis of fundamental conditions, in which case, the duty of making the clients understand the foundation of these projections fall on the distributor or sales person.

 

MTM does not really mean a higher or lower yield for the funds. Over the long-term, MTM valuation can give the same return as a fund valued on an accrual basis. The difference will now be the volatility of the NAVPS.

 

 

9. Given that we stay in the fund within the agreed upon term and given that there are fluctuations in between, do you think that we can still hit the targeted projections?

 

Yes, it is likely that the funds will hit the projected return, but not on the terms given on the funds’ holding-period, rather on the basis of the funds’ Weighted Average Tenor (WAT). WAT is basically the average number of years of the funds’ securities. Even if the holding period of the fund is only for a year, some of the securities may not mature for the next three years. To be safe the investor should have longer term investment horizon.

 

 

10. With MTM, is it still possible to redeem the interest of our investments on a monthly/quarterly basis?

 

Yes, but due to the volatility of the funds there may be times wherein the current value of the investment may not carry enough funds to support the desired amount of redemption.

 

 

 

http://www.philamfunds.com/

[b0redrat]

has anyone tried investing in autosurfing companies? found a blog that explains how to earn from it. this is a lot bigger than mutual funds. checkout http://pinoyinvest.blogspot.com

 

[b_junzo]

FA pano kung walang tym magdaan sa makati area pano maginvest sa mutual fund kaya ba sa banks? or may offices sa province?

[financial advisor]

where is your province?we also have provincial offices

[joveyb]

sorry,

 

I just saw your photo in the manilatonight. You are pretty. I am just interested in knowingyou

i am a chinese working in makati

 

sorry if i offend you

[bRIX]

@joveyb

 

who are you talking to? i can only see male avatars here.

[Guest VO2_Max]

- S A L E S L O A D -

ENTRY FEE

PBF PFI

5,000 - 99,999 2.00% 10,000 - 99,999 3.00%

100,000 - 499,999 1.50% 100,000 - 249,999 2.00%

500,000 - 1,999,999 1.00% 250,000 - 999,999 1.50%

2,000,000 & ABOVE 0.50% 1,000,000 & ABOVE 1.00%

PSGF P$BF

10,000 - 99,999 5.00% $2,000.00 - $9,999.00 2.00%

100,000 - 999,999 3.00% $10,000.00 - $49,999.00 1.75%

1,000,000 & ABOVE 2.00% $50,000.00 - $99,999.00 1.50%

$100,000.00 $149,999.00 1.25%

$150,000.00 $249,999.00 1.00%

$250,000.00 & ABOVE 0.75%

EXIT FEE

PBF & P$BF PFI & PSGF

less than one year 1.00% less than one year 1.00%

more than one year 0.00% less than two years 0.50%

more than two years 0.00%

 

 

ur right...the reasom i got a good rate because of the amount i invested...sorry

[financial advisor]

NAV UPDATE:

 

http://www.icap.com.ph/factsfignavps.asp

[Quentin]

I was wondering if anybody here invests in UITF? Currently I'm looking at Banco de Oro's UITF, Sunlife and Philam Mutual funds. The BDO Peso Bond UITF only started this april and has earned 9%, annualized that's 18%. Sunlife's Peso Bond only earned 8% last year (this year ba ano yield nila), which is why I'm thinking of investing in BDO, even if they have a yearly trust fee it would still give better returns as they have better performance.

[b0redrat]

people, you should consider growing your money in autosurfing programs. checkout this article: http://pinoyinvest.blogspot.com

[Quentin]

b0redrat, get a life.

[greentea55]

people, you should consider growing your money in autosurfing programs. checkout this article: http://pinoyinvest.blogspot.com

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OH, PLEASE ...

[b0redrat]

sorry i didnt mean to offend anyone here. im just posting an alternative to Mutual Funds, the interest you earn in a year in MF can be earned in a month in autosurfing. anyway, to mods pls delete my mesg. sorry ulet.

[financial advisor]

quentin,

 

yes, bdo has good uitf and il be keeping track of their uitfs.

 

in addition, etuiy market is doin good, phisix up and highest in 8mos (youve already heard about it a lot in the news), and has recovered from garci scandal..it may have already hit the lowest for the year..and trend is bullish, hopefully a finish of 16 or better by dec..now is a good time to invest in equity funds before start of 2006...