A beginner’s guide to Philippine best balanced funds

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Do you know that there is a cross between an equities fund and bond fund? It’s called balanced fund. It is invested in both, so it actually gives you the best of both worlds.

Find out why investing in a balanced fund may be suitable for you.

What is a balanced fund?

A balanced fund is a hybrid of an equities fund and bond fund. Its assets are a mix of stocks and debt instruments such as bonds or money market securities. In effect, it combines the high risk/high growth potential associated with stocks and the low risk/modest earnings from fixed income instruments.

Here is a portfolio of a balanced fund.

Sample portfolio of a UITF balanced fund.

As you can see, over half of its allocation is into equities and a little less than the other half is into government-issued bonds, time deposits and money market.

What is the goal of a balanced fund?

A balanced fund seems to occupy the space between the aggressive equities and conservative fixed income assets. Its interesting composition makes it necessary to be a very actively managed fund. In turn, this is reflected on its fees.

Consequently, its goal is two-fold. It tries to match or exceed the stock index—which is composed of blue chip stocks, the top 30 Philippine corporations—as well as the 91- or 100-day return of Philippine government bills.

It is important to note though that some funds may not have exactly the same goal. Nonetheless, they may share the common characteristic of comparing its returns to some benchmark in stocks and fixed income.

Who sells balanced funds

Just like any other investment fund, you can actually invest through the following companies:

It’s sort of unusual that there aren’t any balanced fund available under Personal Equity and Retirement Account (PERA) just yet. Maybe in the future, it’s going to be offered to give the investing public more choices.

List of balanced funds in the Philippines

Below is the list of balanced funds excluding those that are available through VUL.

NameType
AB CAPITAL BALANCED FUNDUITF
ATRAM Dynamic Allocation Fund, Inc.Mutual fund
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class)UITF
ATRAM Philippine Balanced Fund, Inc.Mutual fund
ATRAM US Multi-Asset Income Feeder Fund (PHP Unit Class)UITF
BDO PESO BALANCED FUNDUITF
BEST BALANCED FUNDUITF
BPI Balanced FundUITF
BPI Bayanihan Balanced FundUITF
CHINA BANK BALANCED FUNDUITF
Cocolife Dollar Fund Builder, Inc.Mutual fund
CTBC Bank – ATRAM Philippine Balanced Feeder FundUITF
First Metro Save and Learn Balanced Fund Inc.Mutual fund
Grepalife Balanced Fund CorporationMutual fund
LANDBANK Growth FundUITF
Manulife Global Preferred Income Feeder Fund (PHP Unhedged Class A)UITF
Metro Aspire Balanced Feeder FundUITF
Metro Balanced FundUITF
NCM Mutual Fund of the Phils., Inc.Mutual fund
Odyssey Diversified Balanced FundUITF
Odyssey Diversified Capital FundUITF
PAMI Asia Balanced Fund, Inc.Mutual fund
PAMI Horizon Fund, Inc.Mutual fund
Philam Fund, Inc.Mutual fund
PNB BALANCED FUND (formerly PNB PRESTIGE BALANCED FUND)UITF
RBank Balanced FundUITF
RBank Tax-Exempt Retirement Fund                  (A Balanced UITF)UITF
RIZAL BALANCED FUNDUITF
SB PESO ASSET VARIETY FUNDUITF
Solidaritas Fund, Inc.Mutual fund
Sterling Balanced FundUITF
Sun Life of Canada Prosperity Balanced Fund, Inc.Mutual fund
Sun Life Prosperity Dollar Advantage Fund, Inc.Mutual fund
Sun Life Prosperity Dollar Wellspring Fund, Inc.Mutual fund
Sun Life Prosperity Dynamic Fund, Inc.Mutual fund
UCPB Balanced Fund (Formerly United Balanced Fund)UITF
UnionBank Capital Accumulation Global Fund of Funds Peso Class PortfolioUITF
UnionBank Peso Balanced PortfolioUITF

Advantages of balanced fund

Best of both worlds

By investing in a balanced fund, you get to derive the benefits from stocks and fixed income. You get both the earning from these two different asset classes.

Moderate risk

Due to its composition, its risks can be described as moderate. While equities can be volatile, the fixed income part of its allocation provides the relatively safer cushion.

Diversified portfolio

You are invested to a portfolio that is diversified. You are exposed to both equities and relatively risk-free bonds and money market securities. This means that losses from a volatile stock market may possibly be softened by the its fixed income assets.

Disadvantages of a balanced fund

Moderate returns

The allocation is divided in two different securities that have opposite risk-return profiles. The consequence is that you may not be able to fully take advantage in maximizing your returns in a rising stock market.

Higher fees

Because the fund manager has to handle different asset classes, the fees may be higher compared to passively managed and low-cost index funds.

Best balanced funds in the Philippines

Here’s the list of the top balanced funds arranged from highest to lowest returns for the year 2019. See top UITF and best mutual funds articles respectively for the complete list. Again, past performance does not guarantee future returns.

TypeBankFund NameROI
UITFBPIOdyssey Diversified Capital Fund12.66%
UITFBPIOdyssey Diversified Balanced Fund10.60%
UITFUnion BankUnionBank Peso Balanced Portfolio9.76%
UITFRobinsons BankRBank Tax-Exempt Retirement Fund9.55%
UITFSecurity BankSB PESO ASSET VARIETY FUND9.51%
UITFBPIBPI Bayanihan Balanced Fund8.13%
UITFChina BankCHINA BANK BALANCED FUND7.83%
Mutual fundPhilamPAMI Horizon Fund, Inc.7.21%
UITFRCBCRIZAL BALANCED FUND6.73%
Mutual fundPhilamPhilam Fund, Inc.6.61%
UITFMetrobankMetro Balanced Fund6.59%
UITFBDOBDO PESO BALANCED FUND6.54%
UITFMetrobankMetro Aspire Balanced Feeder Fund6.39%
UITFLand BankLANDBANK Growth Fund6.01%
UITFUCPBUCPB Balanced Fund 5.82%
Mutual fundSun LifeSun Life of Canada Prosperity Balanced Fund, Inc.5.81%
Mutual fundSun LifeSun Life Prosperity Dynamic Fund, Inc.5.77%
Mutual fundFAMIFirst Metro Save and Learn Balanced Fund Inc.3.46%
UITFBPIBPI Balanced Fund3.30%
UITFPNBPNB BALANCED FUND2.78%
UITFAB CapitalAB CAPITAL BALANCED FUND2.77%
Mutual fundALFMSolidaritas Fund, Inc.2.58%
Mutual fundGrepalifeGrepalife Balanced Fund Corporation1.92%
Mutual fundATRAMATRAM Philippine Balanced Fund, Inc.-1.27%
UITFRobinsons BankRBank Balanced Fund-2.54%
UITFPBCOMBEST BALANCED FUND-3.05%
Mutual fundATRAMATRAM Dynamic Allocation Fund, Inc.-5.36%

Fees of balanced funds

The table below contains details of balanced funds:

  • Initial stands for the minimum required starting capital. This is the amount that the company requires for you to start investing.
  • Add means the least amount that you can add to your investment.
  • Sales load is the fee that the investment fund company charges every time that you invest. It may be collected either upfront or when you decide to get your money back.
  • Hold describes the period of time that you’re expected to keep your investment.
  • Exit fee stands for the charge collected when you withdrawing your money before the holding period is up.
  • Fee is the management fee which is used to pay for the operation of the fund.
NameTypeInitialAddSales loadHoldExitFee
ATRAM Dynamic Allocation Fund, Inc.Mutual fund50505%90 days1.12%1.75%
ATRAM Philippine Balanced Fund, Inc.Mutual fund50505%90 days1.12%1.75%
First Metro Save and Learn Balanced Fund Inc.Mutual fund5,0001,0002%6 months1%1.88%
Grepalife Balanced Fund CorporationMutual fund5,0005002%1 year2%1.88%
NCM Mutual Fund of the Phils., Inc.Mutual fund100,00010,0003.36%6 months1%1.80%
PAMI Horizon Fund, Inc.Mutual fund5,0001,0002.80%6 months1%1.80%
Philam Fund, Inc.Mutual fund1,0005003%6 months1%2%
Solidaritas Fund, Inc.Mutual fund5,0001,0001.50%6 months1%2%
Sun Life of Canada Prosperity Balanced Fund, Inc.Mutual fund1,0001,0002%NoneNone2%
Sun Life Prosperity Achiever Fund 2028, Inc.Mutual fund1,0001,000None5 years5%undefined
Sun Life Prosperity Achiever Fund 2038, Inc.Mutual fund1,0001,000None5 years5%undefined
Sun Life Prosperity Achiever Fund 2048, Inc.Mutual fund1,0001,000None5 years5%undefined
Sun Life Prosperity Dynamic Fund, Inc.Mutual fund1,0001,0002%30 days1%2%
AB CAPITAL BALANCED FUNDUITF25,00010,00030 calendar1.00% of the Principal1.25% PA
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class)UITF1,0001,0000 calendarnone0.95%
ATRAM US Multi-Asset Income Feeder Fund (PHP Unit Class)UITF1,0001,0000 calendarnone0.95%
BDO PESO BALANCED FUNDUITF10,00010,00030 calendar0.50% of the Original Participation Amount1.00% p.a.
BPI Balanced FundUITF10,0001,0000 calendarNone1.50%  p.a.
Odyssey Diversified Capital FundUITF10,0005,0000 calendarNone1.50% p.a.
Odyssey Diversified Balanced FundUITF10,0005,0000 calendarNone1.50% p.a.
BPI Bayanihan Balanced FundUITF10,0001,0000 calendarNone0.30% p.a.
CHINA BANK BALANCED FUNDUITF5,0001,00030 calendar1.0% of the amount redeemed1.0% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
CTBC Bank – ATRAM Philippine Balanced Feeder FundUITF10,00010,00030 calendar0.50%1.00%
LANDBANK Growth FundUITF5,0001,00030 calendar25% of net earnings (P500 minimum)1.25%
Manulife Global Preferred Income Feeder Fund (PHP Unhedged Class A)UITF50,0005,00030 calendar1.00% as a % of the amount withdrawn1.75%
Metro Balanced FundUITF25,00025,00030 calendar50% of income on redeemed amount2.00%
Metro Aspire Balanced Feeder FundUITF5,0001,0000 calendarNoneNone
BEST BALANCED FUNDUITF10,00010,00090 calendar0.25% of redemption value1.5% p.a. 
PNB BALANCED FUND (formerly PNB PRESTIGE BALANCED FUND)UITF10,00010,00030 calendar50% of Income Earned1.25% p.a.
RIZAL BALANCED FUNDUITF5,0001,00030 calendar0.25% of redemption proceeds1%
RBank Balanced FundUITF50,00010,00090 calendar1/2% of redemption amount or P500.00 whichever is higher1.50%
RBank Tax-Exempt Retirement Fund                  (A Balanced UITF)UITF1,000,0001,0000 calendarN/A0.15%
SB PESO ASSET VARIETY FUNDUITF10,0005,0000 calendarN/A1.5%
Sterling Balanced FundUITF10,0005,00030 calendar0.50% of the net proceeds1.25%
UnionBank Peso Balanced PortfolioUITF100,000090 calendar0.25% or Php 500 whichever is higher2% on equity, 1% on fixed income, 0.25% of pooled funds; 0.53% per quarter
UnionBank Capital Accumulation Global Fund of Funds Peso Class PortfolioUITF5,000,0005,00090 calendarPhp 500 or 0.25%, whichever is higher 1.5% per annum
UCPB Balanced FundUITF1,0001,00030 calendar5%1.75%

Is balanced fund right for you?

A balanced fund may be right for people who would want to avoid being completely invested in equities and therefore being exposed to its risks. The volatility of stocks may be dampened by the comparatively safer risk profile provided by fixed income assets.

Also, it can also be appropriate for people who are saving up for a financial goal a very long term, such as retirement. As we age, our risk appetite may change from being aggressive in our younger years to becoming conservative when we get older. A balanced fund can be a good option to park your savings as your risk appetite changes.

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