First Metro, MSCI launch consumer-themed index

First Metro Asset Management prexy Gus Cosio discusses the First Metro index

Fund management firm First Metro Asset Management Inc. (FAMI) has teamed up with leading global index provider MSCI Inc. to create a new Philippine index for passive investors who want to build a portfolio that rides on the country’s favorable demographics and consumption-driven economy.

The new index, First Metro Index, is a subset of the MSCI Philippines investible market index. It contains 18 companies deemed as “key drivers of Philippine economic growth,” FAMI president Gus Cosio said in an interview.

“Passive investing has become a global trend,” Cosio said. “At the heart of passive investing is index investing.”

The index seeks to provide investment tools for people who don’t want to actively manage their investment portfolio but will instead track certain benchmarks like MSCI indices. Each of the 18 stocks in the First Metro Index is “highly liquid, fundamentally sound and tradable,” forming a basket that can be a guide to investors who want to buy into the country’s consumption theme.

In a press briefing on Tuesday, Cosio said the top 10 constituents of the First Metro Index were: Ayala Land, SM Prime, BDO Unibank, Ayala Corp., Universal Robina Corp., Jollibee Foods Corp., GT Capital Holdings, Metro Pacific Investment and Bank of the Philippine Islands.

Cosio said FAMI had contracted MSCI to be able to use their methodology in constructing its own index by picking up constituents from MSCI’s existing universe. In effect, First Metro Index contains less than half of the 44 constituents of the MSCI Philippines investible market index.