Sun Life, CTBC team up on PSEi feeder fund

PSE trading floor AFP PHOTO / Jay DIRECTO

The mutual fund arm of Sun Life of Canada has teamed up with the local unit of Taiwanese banking giant CTBC to offer a fund that tracks the local stock barometer Philippine Stock Exchange index.

CTBC Bank and Sun Life Asset Management Co. Inc. (SLAMCI) recently signed a partnership to create the CTBC-Sun Life Philippine Stock Index Feeder Fund, which allows CTBC clients to subscribe to a PSEi-tracking fund for as low as P10,000.

A feeder fund is a type of investment fund that invests its capital into a larger master fund, in this case SLAMCI’s index fund.

This partnership allows retail investors to ride on the booming local stock market at a more affordable participation scheme, as opposed to the usual minimum investment of P1 million.

“SLAMCI is delighted to partner with CTBC Bank in making investing more accessible and convenient for more Filipinos,” SLAMCI president Valerie Pama said in a press statement on Tuesday. “With CTBC Bank’s 25 retail branches nationwide, this partnership certainly boosts our distribution efforts.”

For its part, CTBC Bank said this initiative would complete the bank’s product plate for unit investment trust fund (UITF) from a risk-spectrum point of view.

“Feeding into SLAMCI’s Index Fund complements CTBC Bank’s UITF offering, because we can now offer risk-taking clients with an equity fund option,” CTBC Bank vice president and trust officer Dreda Teresa Mendoza.

CTBC Bank assistant vice president and product services head Gerardo Bien added: “The CTBC Bank-Sun Life Philippine Stock Index Fund is ideal for our retail clients who are looking for an alternative outlet that mirrors the PSEi and are aiming for longer capital growth without the hassle of analyzing and monitoring each stock.

“This is also for clients who are willing to take certain risks in order to avail of the potential higher investment returns offered by the equities market,” Bien said.

With the PSEi recently reaching 8,000 levels, it is indeed a good time to be investing, said Sun Life chief investments officer Michael Enriquez.

“We continue to be bullish on the long term prospects for the Philippine economy, as the government focuses on their aggressive infrastructure program for capacity expansion,” Enriquez said.

“We expect the passage of the tax reform package to be a near-term catalyst for the equity market to finally breach the PSEi’s all-time index level of 8,127.48 last April 2015,” he added.

While the first package of the Duterte administration’s tax reform program seeks to lower personal income tax and estate donor taxes, it also expands the coverage of the value added tax, increases the tax rates on automobile and updates excise tax on oil alongside other complementary revenues.