Best equities funds in the Philippines: A beginners’ guide

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What are equities funds? How different are they from index funds? And are they right for you? If you’re new to investment or you might’ve already started and want to know more options, this article is for you.

Equities funds

By definition, equities funds are any investment funds whose major asset is in the form of stocks of big companies. They are high risk with potential for higher return than other conservative alternatives like savings accounts, time deposits, or bonds.

For the sake of this article, and actually throughout this entire blog, when I say equities funds I mean any fund that is primarily invested in stocks and is actively managed. Their stated objective is to exceed the performance of the Philippine Stock Exchange index or just generally provide capital appreciation for investors.

Their fund manager’s job is to buy stocks of companies and trade these equities in a way that does not just provide value to investors but also to beat the benchmark. One of the ways they do this is to manage a portfolio of stocks with the most potential for growth regardless if they belong to the stock index or not.

Equities funds and index funds

Actually, all index funds are equities funds because in essence invested in stocks too. However, the goal of index funds is to match the return of stock index, which is made up of blue chip top 30 Philippine companies. These funds are passively managed. Their fund managers are restricted to only trade with the top 30 companies. Nothing else.

Also, index funds use the stock index as a template in terms of buying or selling shares as they just simply follow its composition.

Meaning, they acquire a number of shares from each company in a way that mirrors their proportion to the entire index. So if SM Investments Corporation makes up 11% of the stock index, then fund managers would buy just enough SM shares to reflect that portion in their own index funds. That sort of removes the deliberate portfolio re-balancing (adding, removing or replacing shares) that actively managed funds would need.

Fund managers of equities fund, however, don’t have a template or a model to copy from. So they really have to be experts and very skilled in re-balancing the portfolio of their funds to get the most gain.

Other index funds

Lastly, there are index funds that are invested in specific industries like property or consumer. They follow a defined list of companies that are representative of that particular industry, such as:

  • Philequity MSCI Philippine Index Fund, Inc.
  • BPI Philippine Consumer Equity Index Fund
  • BPI Philippine Infrastructure Equity Index Fund

To simplify the discussion, I will include them under equities funds rather than on the separate article about index funds, which under our definition is restricted to mean only those that track the top 30 Philippine companies.

So how do you know equities funds from index funds?

In summary, here are the differences of equities funds that fall under the definition.

DetailEquities FundsEquities Index Funds
SharesAll listed companiesTop 30 companies
ManagementActivePassive
GoalBeat the index or other benchmarksMatch the index
PortfolioActive re-balancingFollows the index
Management feeHighLow

There are a couple of ways to determine an equities fund and index fund.

  • Name of the fund.
  • The prospectus
  • Management fee

The name of the fund is the surest giveaway. If there is the word “index” in the name, then it means it is an index fund. If there is the word “equity” but no “index”, it means it is an equities fund. Examples are: First Metro Save and Learn Philippine Index Fund and PNB Phil-Index Tracker Fund. There are a few that use the PSEI keyword such as the East West PSEI Tracker Fund.

Now as I have stated earlier, there are index funds that track a particular niches such as consumer and infrastructure industries. Those are different because they track companies that are engaged in businesses in respective industries.

The prospectus, which is a document that funds provide to investors, also spells out the goal of the fund. It usually provides objectives and what securities it is going to acquire. Here is a First Metro Asset Management, Inc. (FAMI) equities fund prospectus.

Equities fund objective as found in the prospectus.

In comparison, here’s another one in Sun Life index fund prospectus.

Sun Life index fund objective as found in the prospectus.

Lastly, although not as accurate as the first two indications, you can actually check the management fee. Index funds are lower, and equities funds are usually higher. Here’s the fee from FAMI’s equities fund, which is at 1.875% per year. On the other hand, here’s the fee of a Sun Life index fund, which is at 1% per year.

FAMI equities fund fee.

Sun Life Prosperity Philippine Stock Index fund summary.

Top equities funds in the Philippines

So what are the Philippines’ best performing equities funds? We can actually check the performance of all them and rank them according to how much they’ve gained in 2019. UITF is updated as of December 31, 2019 while mutual funds are updated as of January 2, 2020.

ATRAM Global Technology Feeder Fund tops the list, followed by BPI Catholic Values Global Equity Feeder Fund  and Manulife Dragon Growth Equity Feeder Fund (PHP Unhedged Class A). As a reminder, past performance does not guarantee future returns. See the rest of the entries in the table below.

TypeBankFund NameROI
UITFAtramATRAM Global Technology Feeder Fund39.09%
UITFBPIBPI Catholic Values Global Equity Feeder Fund 16.86%
UITFManulifeManulife Dragon Growth Equity Feeder Fund (PHP Unhedged Class A) 16.73%
UITFAtramATRAM Global Dividend Feeder Fund15.65%
UITFManulifeManulife Asia Best Select Equity Fund (PHP Unhedged Class A) 12.27%
UITFManulifeManulife Asia Pacific REIT Fund of Funds (PHP Unhedged Class A)10.40%
UITFBPIBPI Philippine Consumer Equity Index Fund7.51%
UITFManulifeManulife Equity Wealth Fund (Class I)6.00%
UITFBDOBDO ESG EQUITY FUND6.00%
UITFAB CapitalAB CAPITAL EQUITY FUND5.80%
UITFBDOBDO FOCUSED EQUITY FUND5.68%
UITFBDOBDO INSTITUTIONAL EQUITY FUND5.55%
UITFPNBPNB PHIL-INDEX TRACKER FUND5.37%
UITFSecurity BankSB PHILIPPINE EQUITY INDEX FUND5.31%
UITFMetrobankMetro Aspire Equity Feeder Fund5.30%
UITFAsia United BankEquity Investment Trust Fund5.19%
UITFBDOBDO EQUITY FUND5.18%
UITFBPIBPI Philippine High Dividend Equity Fund4.91%
UITFBPIOdyssey Philippine Equity Fund4.37%
Mutual fundCocolifeUnited Fund, Inc.4.36%
UITFChina BankCHINA BANK EQUITY FUND4.28%
UITFMetrobankMetro Equity Fund4.02%
UITFBPIBPI Equity Value Fund4.00%
UITFManulifeManulife Equity Wealth Fund (Class A)3.95%
UITFPBCOMVALUE EQUITY FUND3.90%
UITFRCBCRIZAL EQUITY FUND3.80%
UITFAtramATRAM Philippine Equity Smart Index Fund3.76%
UITFUCPBUCPB Equity Fund (Formerly United Equity Fund)3.73%
Mutual fundSun LifeSun Life Prosperity Philippine Equity Fund, Inc.3.71%
UITFBDOBDO SUSTAINABLE DIVIDEND FUND3.54%
Mutual fundFAMIFirst Metro Consumer Fund on MSCI Phils. IMI, Inc.3.50%
Mutual fundPhilamPhilam Strategic Growth Fund, Inc.3.50%
UITFUnion BankUnionBank Large Capitalization Philippine Equity Portfolio3.50%
UITFEastWestEastWest PhilEquity Feeder Fund3.48%
UITFUnion BankUnionBank Dividend Play Equity Portfolio3.48%
UITFUCPBUCPB High Dividend Fund3.46%
Mutual fundPhilamPhilequity Fund, Inc.3.45%
UITFMetrobankMetro High Dividend Yield Fund3.31%
UITFSecurity BankSB HIGH DIVIDEND PESO EQUITY FUND2.71%
UITFPNBPNB EQUITY FUND (formerly AUP EQUITIES FUND)2.67%
Mutual fundPhilamPhilequity Dividend Yield Fund, Inc.2.62%
UITFAtramATRAM Asia Equity Opportunity Feeder Fund2.62%
UITFSecurity BankSB PESO EQUITY FUND2.48%
UITFBPIOdyssey High Conviction Equity Fund1.83%
UITFChina BankCHINA BANK HIGH DIVIDEND EQUITY FUND1.15%
Mutual fundFAMIFirst Metro Save and Learn Equity Fund,Inc.1.09%
Mutual fundClimbsClimbs Share Capital Equity Investment Fund Corp.0.80%
Mutual fundALFMALFM Growth Fund, Inc.-0.13%
UITFPNBPNB HIGH DIVIDEND FUND-0.99%
Mutual fundSoldivoSoldivo Strategic Growth Fund, Inc.-1.13%
Mutual fundATRAMATRAM Alpha Opportunity Fund, Inc.-4.08%
Mutual fundATRAMATRAM Philippine Equity Opportunity Fund, Inc.-5.75%
UITFBPIBPI Philippine Infrastructure Equity Index Fund-7.32%
Mutual fundMBGMBG Equity Investment Fund, Inc.-11.28%

Complete list of Philippine equities funds

In the country, the following offer equities funds.

And here’s a summary of all peso-denominated funds, type, and companies that offer them. I did not include VUL products as these are specific to the insurance companies and even specific to a particular plan.

NameTypeCompany
AB CAPITAL EQUITY FUNDUITFAB Capital
ALFM Growth Fund, Inc.Mutual fundALFM
ATRAM Alpha Opportunity Fund, Inc.Mutual fundATRAM Trust Corporation
ATRAM Asia Equity Opportunity Feeder FundUITFATRAM Trust Corporation
ATRAM Global Dividend Feeder FundUITFATRAM Trust Corporation
ATRAM Global Financials Feeder FundUITFATRAM Trust Corporation
ATRAM Global Technology Feeder FundUITFATRAM Trust Corporation
ATRAM Philippine Equity Opportunity Fund, Inc.Mutual fundATRAM Trust Corporation
BDO EQUITY FUNDUITFBDO Unibank, Inc.
BDO ESG EQUITY FUNDUITFBDO Unibank, Inc.
BDO FOCUSED EQUITY FUNDUITFBDO Unibank, Inc.
BDO INSTITUTIONAL EQUITY FUNDUITFBDO Unibank, Inc.
BDO SUSTAINABLE DIVIDEND FUNDUITFBDO Unibank, Inc.
BPI Catholic Values Global Equity Feeder FundUITFBPI Asset Management and Trust Corporation
BPI Equity Value FundUITFBPI Asset Management and Trust Corporation
BPI PERA Equity FundPERABPI Asset Management and Trust Corporation
BPI Philippine Consumer Equity Index FundUITFBPI Asset Management and Trust Corporation
BPI Philippine High Dividend Equity FundUITFBPI Asset Management and Trust Corporation
BPI Philippine Infrastructure Equity Index FundUITFBPI Asset Management and Trust Corporation
CHINA BANK EQUITY FUNDUITFChina Banking Corporation
CHINA BANK HIGH DIVIDEND EQUITY FUNDUITFChina Banking Corporation
Climbs Share Capital Equity Investment Fund Corp.Mutual fundClimbs
DIVERSITY DIVIDEND FOCUSED FUNDUITFBank of Commerce
EastWest PhilEquity Feeder FundUITFEastWest Banking Corporation
EastWest PhilEquity Institutional Feeder FundUITFEastWest Banking Corporation
Equity Investment Trust FundUITFAsia United Bank
First Metro Consumer Fund on MSCI Phils. IMI, Inc.Mutual fundFirst Metro Asset Management Inc
First Metro Phil. Equity Exchange Traded Fund, Inc.Mutual fundFirst Metro Asset Management Inc
First Metro Save and Learn Equity Fund,Inc.Mutual fundFirst Metro Asset Management Inc
Manulife American Growth Equity Feeder Fund (Php Unhedged Class A)UITFManulife Asset Management and Trust Corporation (MAMTC)
Manulife Asia Best Select Equity Fund (PHP Unhedged Class A)UITFManulife Asset Management and Trust Corporation (MAMTC)
Manulife Asia Pacific REIT Fund of Funds (PHP Unhedged Class A)UITFManulife Asset Management and Trust Corporation (MAMTC)
Manulife Asia Pacific REIT Fund of Funds (PHP Unhedged Class I)UITFManulife Asset Management and Trust Corporation (MAMTC)
Manulife Dragon Growth Equity Feeder Fund (PHP Unhedged Class A)UITFManulife Asset Management and Trust Corporation (MAMTC)
Manulife Equity Wealth Fund (Class A)UITFManulife Asset Management and Trust Corporation (MAMTC)
Manulife Equity Wealth Fund (Class I)UITFManulife Asset Management and Trust Corporation (MAMTC)
MBG Equity Investment Fund, Inc.Mutual fundMBG
Metro Aspire Equity Feeder FundUITFMetropolitan Bank & Trust Co.
Metro Equity FundUITFMetropolitan Bank & Trust Co.
Metro High Dividend Yield FundUITFMetropolitan Bank & Trust Co.
Odyssey High Conviction Equity FundUITFBPI Asset Management and Trust Corporation
Odyssey Philippine Equity FundUITFBPI Asset Management and Trust Corporation
Philam Strategic Growth Fund, Inc.Mutual fundPhilam
Philequity Dividend Yield Fund, Inc.Mutual fundPhilam
Philequity Fund, Inc.Mutual fundPhilam
Philequity MSCI Philippine Index Fund, Inc.Mutual fundPhilam
PNB EQUITY FUND (formerly AUP EQUITIES FUND)UITFPhilippine National Bank
PNB HIGH DIVIDEND FUNDUITFPhilippine National Bank
RIZAL EQUITY FUNDUITFRizal Commercial Banking Corporation
SB HIGH DIVIDEND PESO EQUITY FUNDUITFSecurity Bank Corporation
SB PESO EQUITY FUNDUITFSecurity Bank Corporation
Soldivo Strategic Growth Fund, Inc.Mutual fundSoldivo
Sun Life Prosperity Philippine Equity Fund, Inc.Mutual fundSun Life
UCPB Equity Fund (Formerly United Equity Fund)UITFUnited Coconut Planters Bank
UCPB High Dividend FundUITFUnited Coconut Planters Bank
UnionBank Dividend Play Equity PortfolioUITFUnion Bank
UnionBank Large Capitalization Philippine Equity PortfolioUITFUnion Bank
United Fund, Inc.Mutual fundCoco Life
VALUE EQUITY FUNDUITFPhilippine Bank of Communications

Charges, fees, and taxes of equities fund

Now that you see the returns, you have to understand that there are fees involved. This is a summary of the features of the funds, and you can definitely revisit the pages for mutual funds, UITF, and PERA for more in-depth discussion.

  • Initial capital.
  • Additional investment.
  • Management fee.
  • Holding period
  • Exit fee
  • Sales load

Initial capital

Initial capital is the minimum amount you can start with the fund. It can be as low as 50 pesos to 100,000 pesos.

Additional investment

Additional investment is the minimum amount that you can add to your fund. You’re not required to add but it is recommended that you do, especially if you can do so regularly. The range is between 50 pesos and 10,000 pesos.

Management fee

Management fee or trust fee is what the company charges to pay for the costs in operating the fund. It is assessed every year. You don’t have to worry about this because you’re not going to be asked to pay out-of-pocket. The fee is computed into the net asset value per share or net asset value per unit.

Holding period

Holding period, also called lock-in period, is the minimum period of time between starting your account and redeeming your investment. Some funds don’t have any holding period. Most do however.

Exit fee

Exit fee is charged when you withdraw within the holding period. It is calculated usually as a percentage of your total investment value.

Sales load

Sales load, also called front-end/back-end fee depending on the timing on which it is charged, is a percentage of your capital that is taken off for the fund company.

NameType InitialAddSales loadFeeHold Exit
ALFM Growth Fund, Inc.Mutual fund5,0001,000 3.00%2%90 days1.00%
ATRAM Alpha Opportunity Fund, Inc.Mutual fund5050 5.60%2%90 days1.12%
ATRAM Philippine Equity Opportunity Fund, Inc.Mutual fund5050 5.60%2%90 days1.12%
Climbs Share Capital Equity Investment Fund Corp.Mutual fund5001,000 2.00%???
First Metro Consumer Fund on MSCI Phils. Inc.Mutual fund5,0001,000 2.00%1.75%6 months1.00%
First Metro Save and Learn Equity Fund,Inc.Mutual fund5,0001,000 2.00%1.88%6 months1.00%
MBG Equity Investment Fund, Inc.Mutual fund100,00010,000 5.00%2%1 year5.00%
One Wealthy Nation Fund, Inc.Mutual fund5,0001,000 3.00%1.88%6 months1.00%
Philam Strategic Growth Fund, Inc.Mutual fund5,0001,000 3.00%2%6 months1.00%
Philequity Dividend Yield Fund, Inc.Mutual fund1,000500 5.00%3%90 days2.00%
Philequity Fund, Inc.Mutual fund1,000500 5.00%1%90 days2.00%
Soldivo Strategic Growth Fund, Inc.Mutual fund5,000500 3.36%2.25%6 months1.12%
Sun Life Prosperity Philippine Equity Fund, Inc.Mutual fund1,000500 2.00%2%NoneNone
United Fund, Inc.Mutual fund1,000500 2.00%?1 year3.50%
BPI PERA Equity FundPERA10001,000 1.50%NoneNone
AB Capital Euqity FundUITF25,000500 1%30 calendar1.00%
ATRAM PhilippineEquity Smart Index FundUITF1,000500 2%0 calendarnone
ATRAM Global DividendFeeder FundUITF1,000500 1%0 calendarnone
ATRAM Asia EquityOpportunity Feeder FundUITF1,000500 1%0 calendarnone
ATRAM GlobalTechnology Feeder FundUITF1,000500 1%0 calendarnone
ATRAM GlobalFinancials Feeder FundUITF1,000500 1%0 calendarnone
ATRAM GlobalMulti-Asset Income Feeder Fund (PHP Unit Class)UITF1,000500 1%0 calendarnone
BDO EquityFundUITF10,000500 1%30 calendar1.00%
BDO Focused Equity FundUITF10,000500 1.50%30 calendar1.00%
BDO Esg Equity FundUITF10,000500 1.00%30 calendar1.00%
BDO Institutional Equity FundUITF1,000500 1.00%30 calendar0.50%
BDO Sustainable Dividend FundUITF10,000500 1.25%30 calendar1.00%
BPI Equity Value FundUITF10,000500 1.50%0 calendarNone
BPI Philippine High DividendEquity FundUITF10,000500 1.50%0 calendarNone
BPI Philippine InfrastructureEquity Index FundUITF10,000500 1.00%0 calendarNone
BPI Philippine Consumer EquityIndex FundUITF10,000500 1.00%0 calendarNone
BPI Catholic Values GlobalEquity Feeder FundUITF100,000500 0.50%0 calendarNone
CHINA BANK EQUITY FUNDUITF5,000500 1.00%30 calendar1.00%
CHINA BANK HIGH DIVIDENDEQUITY FUNDUITF5,000500 1.00%30 calendar1.00%
East West PhilEquityInstitutional Feeder FundUITF0500 Fee is charged at the portfolio level0 calendar0
Manulife Asia Best SelectEquity Fund (PHP Unhedged Class A)UITF5,000500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Manulife Asia Pacific REITFund of Funds (PHP Unhedged Class A)UITF50,000500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Manulife American GrowthEquity Feeder Fund (Php Unhedged Class A)UITF5,000500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Manulife Asia Pacific REITFund of Funds (PHP Unhedged Class I)UITF50,000500 N/A30 calendarN/A
Manulife Equity Wealth Fund(Class A)UITF5,000500 2.00%365 calendar1.00% of the amount redeemed
Manulife Equity Wealth Fund(Class I)UITF5,000500 N/A365 calendarN/A
Manulife Dragon Growth EquityFeeder Fund (PHP Unhedged Class A)UITF5,000500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Metro Aspire Equity FeederFundUITF5,000500 None0 calendarNone
Metro Equity FundUITF25,000500 2.00%30 calendar50% of income on redeemed amount
Metro High Dividend Yield FundUITF25,000500 2.00%7 calendar50% of income on redeemed amount
Odyssey Philippine Equity FundUITF10,000500 2.00%0 calendarNone
Odyssey High Conviction EquityFundUITF10,000500 2.50%0 calendarNone
PNB HIGH DIVIDEND FUNDUITF10,000500 2.00%30 calendar50% of Income Earned
PNB EQUITY FUND (formerly AUPEQUITIES FUND)UITF10,000500 2.00% p.a of NAV30 calendar.5% of income earned, if any
RIZAL EQUITY FUNDUITF25,000500 1% based on NAV30 calendar0.25% of redemption proceeds
SB HIGH DIVIDEND PESO EQUITYFUNDUITF10,000500 1.50%0 calendarN/A
SB PESO EQUITY FUNDUITF10,000500 1.50%0 calendarN/A
UCPB Equity FundUITF1,000500 1.75%30 calendar5%
UCPB High Dividend FundUITF1,000500 1.50%30 calendar5%
UnionBank Dividend Play EquityPortfolioUITF100,000500 2%30 calendar0.25% or Php 500 whichever is higher
UnionBank Large CapitalizationPhilippine Equity PortfolioUITF100,000500 2% per annum; 0.63% for the quarter90 calendar0.25% or Php 500 whichever is higher
VALUE EQUITY FUNDUITF10,000500 1.50%90 calendar0.25% of redemption value

Is equities fund right for you?

Equities funds are for aggressive investors. They are appropriate for people who have long time horizon, high risk appetite and with no immediate need for liquidity.

What this means is that equities funds are ideal for long-term because, historically, stocks have risen in value (with a reminder that it does not guarantee future performance). Which also, in a way, may require that you have no immediate reason to redeem your investment. Long time horizon also would allow you to ride through cycles of market boom and bust, and still end up potentially with positive gains.

Additionally, you must be ready for possible capital loss. And that’s why all fund reps would ask you to fill out a form that would determine your ability to manage your reaction in times of negative turnout for your investment.

How do you invest in equities funds?

  1. Choose the investment house: mutual fund, UITF, PERA, or VUL.
  2. Contact the company rep and gather information.
  3. Learn and compare
  4. Decide on the fund.
  5. Start your account.
  6. Regularly invest whenever you can or depending on your financial goal.

First, you have to choose if you’d want to acquire a mutual fund, UITF, PERA or investment-linked insurance. Each has their own pros and cons. For me though, it all boils down to the level of fees, ease of doing business, convenience, and customer service. For more tips, here are some guides on investing before you even get started, investing in mutual funds without sales load, and a discussion on buying direct stocks versus investment funds.

Second, contact any fund rep. You may see here the contact details of mutual fund and UITF companies. Or, in the case of UITF and PERA, you can check with your bank if they offer those. You may also opt to invest in them via an life insurance such as in variable universal life plan.

Third, learn as much as you can. I know that this guide, as a general discussion, might’ve missed out details that are specific to the fund that you’ve chosen. So it’s best to do the legwork, understand the prospectus, policies, online access to monitor your money, and other details of the funds. And then compare them based on fees, convenience in doing business, etc.

Fourth, decide on a specific fund. Take into account your attitude towards risks, the need for cash, the length of time you’re willing to let your capital stay invested, the objective of the fund, your income, and so on.

Fifth, start your account. Make sure that you have adequate funding to put up the initial capital. Make sure that you bring at least a valid identification card, a tax identification number, and the starting capital.

Lastly, check too if you can add more later on. It doesn’t have to be a huge amount. By investing regularly, you get to be able to save in a way that might grow your savings over time. You can read the discussion on peso cost averaging versus lump sum investment.

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