Inquirer:
Growth (Photo credit: AdamSelwood)
I have invested on the following at BPI :
1. BPI Balanced Fund
2. BPI Equity Value Fund
3. BPI Global Phil Fund ( $)
4. BPI Phil Dollar Bond Index Fund ( $)
5.ALFM Dollar Bond Fund ( $)
6. Phil Stock Index Fund ( Mutual fund )
7. ALFM Growth Fund ( Mutual fund )
8. Odyssey Diversified Capital Fund
9. Odyssey Diversified Balanced Fund
10. Odyssey Phil Equity Fund
11. Odyssey Phil High Conviction Equity
12. Odyssey Asia Pacific High Dividend Equity Fund ( $ )
13. Odyssey Phil. Dollar Bond Fund ($)
I don’t have any professional basis why I have chosen and put my money on the above investments . I want to know if what I did was right and I want to know if I should consolidate some of the investments into fewer investments / simplify and group some of them into one instead of having 13 .
What do you suggest ? Do you have other investments( UITF or Mutual fund ) other than BPI to invest ?
I am asking your advice what to do .
Guita of Colayco Foundation:
First, it is good that you are invested in many different funds. This helps you diversify your risks. However, I need to point out areas of caution:
Thought BPI is a reputable and good performing company, by investing only w/ BPI you are exposing yourself to the following risks:
1. What if something happens to BPI / BPI Asset Management?
2. BPI Asset Management has a certain investment style and philosophy which is applied to all the funds. Investing w/ a different fund manager is also prudent.
In addition, several of the funds are very similar to one another – you are exposing yourself to the same risks.
For example the following are all Philippine Equity Funds:
2. BPI Equity Value Fund
6. Phil Stock Index Fund (Mutual fund)
10. Odyssey Phil Equity Fund
11. Odyssey Phil High Conviction Equity
Invested in one stock market by the same fund managers, your savings are exposed to the same risks and it’s growth dependent on the same skills/knowledge of the fund managers. The only thing that differentiates these funds are the guidelines that govern the management of the fund and the asset base of the fund.
The same is true for:
1. BPI Balanced Fund
7. ALFM Growth Fund ( Mutual fund )
and
4. BPI Phil Dollar Bond Index Fund ( $)
5.ALFM Dollar Bond Fund ( $)
13. Odyssey Phil. Dollar Bond Fund ($)
3. BPI Global Phil Fund ( $)
For the above – Of course performance depends on the management of the individual funds. But risk wise, this exposes you to foreign exchange or currency risks. Whether the fund is invested in Asia vs. US or Europe also matters.
As a rule of thumb however, we recommend that you invest in the currency you earn or spend in as converting PHP-USD and vice versa just to invest starts you off in a negative position
Take note of the following:
1. What is your purpose for each fund? Why are you invested there?
i.e. I invested in Phil Stock Index Fund ( Mutual fund ) for my retirement…
Match a fund (or 2 funds) with a specific purpose – or use for the money (and its growth). You don’t need 13 funds. Consolidate based on purpose.
2. Consider other fund managers. The performance of a fund is heavily dependent on the skill of its fund managers. BPI Asset Management is consistently one of the best. But there are other fund managers that have proven that they are equally if not more adept at growing and protecting their funds. A full list can be found for MFs on http://www.pifa.com.ph and for UITFs onwww.uitf.com.ph
3. Consider other investment instruments. Growth is important but so is protecting your wealth. While other instruments may have less return they are also less risky. Depending on your needs in the future, age and risk profile you can study long term savings plans such as (pension plans or endowment plans), certain tips of investment linked insurance products and government securities.
