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 FundsIndex Funds
SharesAll listed companiesTop 30 companies
ManagementActivePassive
GoalBeat the indexMatch 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.

See examples below.

  • First Metro Save and Learn Philippine Index Fund, Inc.
  • PAMI Equity Index Fund, Inc
  • Philequity PSE Index Fund Inc
  • Philippine Stock Index Fund Corp.
  • Sun Life Prosperity Philippine Stock Index Fund, Inc.
  • Exception: East West PSEI Tracker Fund (No “index” in the name, but it contains PSEI tracker)

Now as I have stated earlier, there are index funds that track a particular industry and even the entire Philippine market, and they will be included in this article.

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.

FAMI equities fund fee.

On the other hand, here’s the fee of a Sun Life index fund, which is at 1% per year.

Sun Life Prosperity Philippine Stock Index fund summary.

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

Best performing equities funds in the Philippines 2019

See below the list of the best performing equities funds as of August, 2019. They are arranged by highest rate of return in a five-year period. You will also the returns for 3 years, 1 year, and YTD or year to date.

Fund NameType5yr3yr1yrYTD
CHINA BANK EQUITY FUNDUITF15.96%3.24%1.16%5.61%
RIZAL EQUITY FUNDUITF12.82%6.57%2.87%1.06%
BPI Philippine High Dividend Equity FundUITF11.92%1.10%0.69%5.61%
Equity Investment Trust FundUITF11.67%3.85%1.01%5.36%
BPI Equity Value FundUITF10.39%-0.63%-0.17%7.07%
BDO INSTITUTIONAL EQUITY FUNDUITF8.78%0.04%1.18%7.07%
Odyssey Philippine Equity FundUITF6.18%-2.73%0.14%4.26%
UCPB High Dividend FundUITF5.96%3.11%-0.49%1.06%
Metro Equity FundUITF5.42%-1.51%-0.50%4.26%
VALUE EQUITY FUNDUITF5.25%-0.94%-0.80%1.06%
SB HIGH DIVIDEND PESO EQUITY FUNDUITF5.21%7.07%1.01%1.06%
BDO EQUITY FUNDUITF3.66%-3.10%-0.01%5.84%
UnionBank Dividend Play Equity PortfolioUITF2.89%1.52%0.02%1.06%
United Fund, IncMutual fund2.22%1.43%0.15%4.48%
PNB EQUITY FUND (Formerly AUP EQUITIES FUND)UITF1.62%0.36%-1.90%3.74%
SB PESO EQUITY FUNDUITF1.55%9.54%0.69%1.06%
ATRAM Alpha Opportunity Fund, IncMutual fund1.29%2.02%0.66%4.79%
Sun Life Prosperity Philippine Equity Fund, IncMutual fund1.11%-0.09%0.03%4.43%
Philequity Fund, IncMutual fund1.08%0.28%-0.51%3.59%
Philequity Dividend Yield Fund, IncMutual fund1.05%-0.49%-0.65%2.96%
First Metro Save and Learn Equity Fund,IncMutual fund0.13%-1.02%-2.21%0.97%
ALFM Growth Fund, IncMutual fund-0.06%-2.04%-3.33%0.99%
Philam Strategic Growth Fund, IncMutual fund-0.25%-1.71%0.30%3.78%
UCPB Equity Fund (Formerly United Equity Fund)UITF-0.65%2.38%-0.19%1.06%
ATRAM Philippine Equity Opportunity Fund, IncMutual fund-1.30%-3.44%-4.83%1.09%
AB CAPITAL EQUITY FUNDUITF-2.04%10.77%1.29%7.07%
PNB HIGH DIVIDEND FUNDUITF-2.46%-8.88%-0.28%1.06%
Odyssey High Conviction Equity FundUITF-4.96%-8.92%-1.37%4.26%
BDO SUSTAINABLE DIVIDEND FUNDUITF-11.92%-16.52%-0.60%7.07%
BDO FOCUSED EQUITY FUNDUITF-17.45%-16.86%0.14%7.31%
UnionBank Large Capitalization Philippine Equity PortfolioUITF-18.22%-0.82%0.27%1.06%
Climbs Share Capital Equity Investment Fund CorpMutual fund2.33%4.81%
First Metro Consumer Fund on MSCI Phils. IMI, IncMutual fund-1.54%3.73%
MBG Equity Investment Fund, IncMutual fund2.38%1.99%
Philequity MSCI Philippine Index Fund, Inc.Mutual fund
Soldivo Strategic Growth Fund, IncMutual fund-1.24%1.20%4.10%
BPI PERA Equity FundPERA3.85%6.93%
Manulife Asia Pacific REIT Fund Of Funds (PHP Unhedged Class A)UITF9.33%12.76%
BPI Catholic Values Global Equity Feeder FundUITF-5.25%10.89%
BPI Philippine Consumer Equity Index FundUITF1.55%7.02%
BDO ESG EQUITY FUNDUITF-0.98%2.81%6.98%
Manulife Equity Wealth Fund (Class I)UITF1.53%6.07%
Manulife Asia Best Select Equity Fund (PHP Unhedged Class A)UITF-9.43%6.03%
Manulife Dragon Growth Equity Feeder Fund (PHP Unhedged Class A)UITF5.81%
Metro Aspire Equity Feeder FundUITF2.29%0.42%5.50%
Manulife Equity Wealth Fund (Class A)UITF-0.49%4.70%
Metro High Dividend Yield FundUITF-3.79%-1.39%3.66%
CHINA BANK HIGH DIVIDEND EQUITY FUNDUITF3.94%-1.36%2.95%
BPI Philippine Infrastructure Equity Index FundUITF-2.73%2.74%

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 fund 5,000          1,000 3.00% 2% 90 days 1.00%
ATRAM Alpha Opportunity Fund, Inc. Mutual fund 50               50 5.60% 2% 90 days 1.12%
ATRAM Philippine Equity Opportunity Fund, Inc. Mutual fund 50               50 5.60% 2% 90 days 1.12%
Climbs Share Capital Equity Investment Fund Corp. Mutual fund 500          1,000 2.00% ? ? ?
First Metro Consumer Fund on MSCI Phils. Inc. Mutual fund 5,000          1,000 2.00% 1.75% 6 months 1.00%
First Metro Save and Learn Equity Fund,Inc. Mutual fund 5,000          1,000 2.00% 1.88% 6 months 1.00%
MBG Equity Investment Fund, Inc. Mutual fund 100,000        10,000 5.00% 2% 1 year 5.00%
One Wealthy Nation Fund, Inc. Mutual fund 5,000          1,000 3.00% 1.88% 6 months 1.00%
Philam Strategic Growth Fund, Inc. Mutual fund 5,000          1,000 3.00% 2% 6 months 1.00%
Philequity Dividend Yield Fund, Inc. Mutual fund 1,000             500 5.00% 3% 90 days 2.00%
Philequity Fund, Inc. Mutual fund 1,000             500 5.00% 1% 90 days 2.00%
Soldivo Strategic Growth Fund, Inc. Mutual fund 5,000             500 3.36% 2.25% 6 months 1.12%
Sun Life Prosperity Philippine Equity Fund, Inc. Mutual fund 1,000             500 2.00% 2% None None
United Fund, Inc. Mutual fund 1,000             500 2.00% ? 1 year 3.50%
BPI PERA Equity FundPERA1000         1,000 1.50%NoneNone
AB Capital Euqity FundUITF25,000            500 1%30 calendar1.00%
ATRAM Philippine Equity Smart Index FundUITF1,000            500 2%0 calendarnone
ATRAM Global Dividend Feeder FundUITF1,000            500 1%0 calendarnone
ATRAM Asia Equity Opportunity Feeder FundUITF1,000            500 1%0 calendarnone
ATRAM Global Technology Feeder FundUITF1,000            500 1%0 calendarnone
ATRAM Global Financials Feeder FundUITF1,000            500 1%0 calendarnone
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class)UITF1,000            500 1%0 calendarnone
BDO Equity FundUITF10,000            500 1%30 calendar1.00%
BDO Focused Equity FundUITF10,000            500 1.50%30 calendar1.00%
BDO Esg Equity FundUITF10,000            500 1.00%30 calendar1.00%
BDO Institutional Equity FundUITF1,000            500 1.00%30 calendar0.50%
BDO Sustainable Dividend FundUITF10,000            500 1.25%30 calendar1.00%
BPI Equity Value FundUITF10,000            500 1.50%0 calendarNone
BPI Philippine High Dividend Equity FundUITF10,000            500 1.50%0 calendarNone
BPI Philippine Infrastructure Equity Index FundUITF10,000            500 1.00%0 calendarNone
BPI Philippine Consumer Equity Index FundUITF10,000            500 1.00%0 calendarNone
BPI Catholic Values Global Equity Feeder FundUITF100,000            500 0.50%0 calendarNone
CHINA BANK EQUITY FUNDUITF5,000            500 1.00%30 calendar1.00%
CHINA BANK HIGH DIVIDEND EQUITY FUNDUITF5,000            500 1.00%30 calendar1.00%
East West PhilEquity Institutional Feeder FundUITF0            500 Fee is charged at the portfolio level0 calendar0
Manulife Asia Best Select Equity Fund (PHP Unhedged Class A)UITF5,000            500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Manulife Asia Pacific REIT Fund of Funds (PHP Unhedged Class A)UITF50,000            500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Manulife American Growth Equity Feeder Fund (Php Unhedged Class A)UITF5,000            500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Manulife Asia Pacific REIT Fund of Funds (PHP Unhedged Class I)UITF50,000            500 N/A30 calendarN/A
Manulife Equity Wealth Fund (Class A)UITF5,000            500 2.00%365 calendar1.00% of the amount redeemed
Manulife Equity Wealth Fund (Class I)UITF5,000            500 N/A365 calendarN/A
Manulife Dragon Growth Equity Feeder Fund (PHP Unhedged Class A)UITF5,000            500 1.75% as a % of the NAV30 calendar1.00% as a % of the amount withdrawn
Metro Aspire Equity Feeder FundUITF5,000            500 None0 calendarNone
Metro Equity FundUITF25,000            500 2.00%30 calendar50% of income on redeemed amount
Metro High Dividend Yield FundUITF25,000            500 2.00%7 calendar50% of income on redeemed amount
Odyssey Philippine Equity FundUITF10,000            500 2.00%0 calendarNone
Odyssey High Conviction Equity FundUITF10,000            500 2.50%0 calendarNone
PNB HIGH DIVIDEND FUNDUITF10,000            500 2.00%30 calendar50% of Income Earned
PNB EQUITY FUND (formerly AUP EQUITIES FUND)UITF10,000            500 2.00% p.a of NAV30 calendar.5% of income earned, if any
RIZAL EQUITY FUNDUITF25,000            500 1% based on NAV30 calendar0.25% of redemption proceeds
SB HIGH DIVIDEND PESO EQUITY FUNDUITF10,000            500 1.50%0 calendarN/A
SB PESO EQUITY FUNDUITF10,000            500 1.50%0 calendarN/A
UCPB Equity FundUITF1,000            500 1.75%30 calendar5%
UCPB High Dividend FundUITF1,000            500 1.50%30 calendar5%
UnionBank Dividend Play Equity PortfolioUITF100,000            500 2%30 calendar0.25% or Php 500 whichever is higher
UnionBank Large Capitalization Philippine Equity Portfolio UITF100,000            500 2% per annum; 0.63% for the quarter90 calendar0.25% or Php 500 whichever is higher
VALUE EQUITY FUNDUITF10,000            500 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 to get started with equities fund?

First, you have to choose if you’d want to acquire a mutual fund, UITF, or PERA. 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 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.

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.

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.

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.