PH’s first exchange-traded fund debuts on PSE

AFP FILE PHOTO

MANILA, Philippines—The Philippine Stock Exchange index-tracking First Metro Exchange Traded Fund (FMETF), the country’s very first exchange-traded fund, debuted on the local stock exchange on Monday as proponents shared bright prospects for underlying local stocks in the coming year.

Rather than buying all 30 stocks in local barometer PSEi, this new instrument First Metro ETF opens up market access even to grassroots investors even with a small amount of participation, said Roberto Juanchito Dispo, president of First Metro Investment Corp. which sponsored and organized this pioneering fund.

“Timing could have never been kinder and more perfect,” Dispo told a press briefing after the listing ceremonies of FMETF Monday.
After a heavy pipeline of initial public offerings this last quarter that sucked up a lot of liquidity in the stock market, the recent market pullback allowed FMETF to offer the funds at relatively low values, Dispo said.

FMETF offered the funds at an opening net asset value per share of P99.20. On its trading debut, the share price of FMETF – one of the most actively traded issuers on Monday – appreciated by 0.81 percent to P100 per share in morning trade.

The fund has an authorized capital of P3 billion which Dispo expects to fully use up by the first quarter of 2014. At present, 7.5 million out of FMETF’s 30 million shares authorized by the PSE for listing had been issued at par value of P100 each.

Like mutual funds, ETF pools funds by selling shares to the investing public. But unlike mutual funds, its price is quoted real time so investors immediately know how much they are buying or selling their ETF shares for. ETF investors may buy or sell shares through trading participants.

FMETF aims to “provide returns that would reflect the performance of the local equities market by investing in a basket of securities included in the PSEi.