Philequity Management eyes exchange-traded funds to diversify products

ILLUSTRATION FROM ETFDB.COM

MANILA, Philippinies—Investment management firm Philequity Management Inc. plans to get into the exchange-traded fund (ETF) business and diversify its product offering with the launch of three new funds that will respectively invest in high-dividend stocks, small caps and resources-based companies.

In a press briefing on Thursday, Philequity director Wilson Sy said the company has been managing a fund that has been tracking the PSE and which would be converted into ETFs upon the issuance by the Securities and Exchange Commission of guidelines on these instruments.

ETF refers to a mutual fund-like asset class that tracks an index, a commodity or a basket of assets like an index fund.  But since it trades like a stock on an exchange, its net asset value (NAV) is not calculated every day but it is supposed to trade close to its NAV.  This instrument thus offers public investors an undivided interest in a pool of securities and other assets and thus are similar in many ways to traditional mutual funds, except that shares in an ETF can be bought and sold throughout the day like stocks on an exchange through a broker-dealer.

“We are ready for it if the rules are out,” Sy said.

Philequity currently has five mutual funds in its family—an actively managed equities fund, a peso bond fund, a dollar income fund, a strategic growth fund and an index fund. The index fund is the one that can be converted into ETF.  Philequity, the only fund management firm that is independent or not affiliated with a bank, has over P6 billion in assets under management and over 7,000 fund shareholders.

Sy said the company likewise had a pending application with the Securities and Exchange Commission to offer a new mutual fund—one that would offer a basket of high-yielding Philippine stocks.

Edmundo Bunyi Jr., Philequity Fund, said this “dividend yield fund” could be offered early next year. “The idea is to put the top 10 high dividend-yielding stocks there,” he said.

Bunyi added that a fund focusing on small cap companies with strong growth potentials and a “resources”-based fund were likewise in the pipeline.

The “resources” fund planned by Philequity would invest in select mining and oil issues, Sy said.

Despite its lack of bank distribution channels, Sy said Philequity could harness synergies with its 160-branch network of Western Union remittance centers. These remittances centers, he said, could accept mutual fund investments such as from overseas Filipinos looking for alternative investment outlets.