PAMI maintains P19.4B in AUMs

Mutual funds managed by the Philam Asset Management Inc. (Pami) has slipped slightly as an indirect result of the disturbances brought about by the unit investment trust fund (UITF).

From P20.7-billion assets under management (AUMs) at the end of 2005, it slipped to P19.4 billion as the mutual fund industry was indirectly affected by panic-stricken investors confused with the bank-managed UITFs.

Pami describes a mutual fund is an investment company whose objective is to make money by investing and reinvesting in securities. Investors can participate in the investment company by buying the shares of the mutual fund.

A mutual fund is operated by an asset management company not allied with a bank. It is regulated by the Securities and Exchange Commission (SEC).

On the other hand, the UITF is a trust fund managed by the trust department of a bank. The Bangko Sentral ng Pilipinas (BSP) is the regulating government agency since it is managed by banks.

UITFs are now under close scrutiny by the BSP as it has been experiencing huge redemptions or withdrawals due to the poor net asset values. The regulator said that it may have been marketed more as a deposit product than an investment product with greater risks than deposits.

Likewise, some investors are made to believe that UITFs are also covered by the Philippine Deposit Insurance Corp. (PDIC).

"It is very much like the problem being experienced by the country’s life insurance industry wherein people confuse them from the troubled pre-need industry," Pami officials said.

Meanwhile, the mutual funds managed by Pami recorded positive growth in net yields at the end of 2005.

The Philam (peso) Bond Fund recorded a net yield of 12.28 percent while the Philam Strategic Growth Fund (equity or stock market) with a net yield 15.19 percent.

The Philam Fund (mix of equities and bonds) grew by 14.78 percent while the Philam Dollar Bond Fund expanded by 8.34 percent.

The GSIS Kinabukasan Fund recorded a net yield of 13.85 percent end December.

By the end of May this year, the assets invested with the Philam Bond Fund reached P9 billion while the Philam Strategic Growth Fund registered assets worth P763 million.

The Philam Fund had P550 million in AUMs, the GSIS Kinabukasan Fund with P1.3 billion, and the Philam Dollar Bond Fund, P7.8 billion.

In the same period last year, the Philam Bond Fund reached P8.7 billion while the Strategic Growth Fund was placed at P462 million.

The Philam Fund hit P289 billion, the GSIS Fund at P1.2 billion, and the Dollar Bond Fund stood at $205 million at the end of May 2005.

At the start of the last quarter, Pami will be launching its newest fund, the Philam Managed Income Fund (PMIF).

The PMIF is a mutual fund that provides a quarterly cash facility or flow.

"Through the fund, investors can generate quarterly cash flows in the form of redemptions that will enable them to meet short-term financial needs while building their long-term funding requirements. The fund will have a natural attraction for retirees who need to provide for day-to-day needs," Karen Liza M. Roa, the newly-installed Pami president and chief executive officer, said. – Ted Torres