When you buy a variable universal life or VUL plan, you are not just buying a life insurance. One of the things that you would need to decide is the choice of investment. Whether you go for the Axelerator, Academix, LifeBasix, RetireSmart, or MyAmbition, AXA Philippines will let you pick the best fund that you’d like to invest in.
In this article, the focus is going to be on a few important details of each of the funds in Philippine peso to assist you in selecting what’s best for you.
Who manages the AXA’s investment funds?
All funds are managed by the Metrobank Trust Banking Group, a subsidiary of Metropolitan Bank and Trust Company. As a fund manager located in Makati City, it is one of the most awarded asset management establishments in Asia and one of the top three players in the industry.
Just a quick note though that the performance of the funds in the past does not guarantee similar returns in the future.
Types of investment funds
As what has been discussed in variable universal life article, managed funds can be broadly sorted into three groups: equities, fixed income, and balanced. Funds are also grouped in terms currency. AXA Philippines has peso and dollar funds.
You may want to read more information on the pros and cons of managed funds, and then you can come back here after.
Equities are into acquiring shares of companies which are traded in a stocks exchange. Their portfolio may include shares of Ayala, BDO, and SM for example, all of which are publicly listed companies on the Philippine Stocks Exchange. Because stocks rise and fall in value, equities are considered having the highest risk. They are fit for people who are aggressive in letting their money grow and who can wait for long term.
Fixed income meanwhile hold assets that are relatively safer such as interest-bearing securities. Examples would be certificates of deposit, money market, treasury notes, and corporate or sovereign bonds.
Balanced, as the name suggests, is a combination of fixed income and equities. They are somewhat in the middle in terms of risk because they contain both safe and aggressive assets.
AXA equities funds
AXA Philippines has four peso-denominated equities funds, namely:
Philippine Wealth Equity Fund
The Philippine Wealth Equity Fund is invested in top companies listed in the Philippine Stock Exchange. Its portfolio is composed primarily of equities that belong to the stock index, a bit of money market, and no bonds. Shares include SM Investment Corporation, Ayala Land Inc., SM Prime Holdings Inc., Ayala Corporation and BDO Unibank Inc.
The objective of the fund is to optimize earnings by beating the stock index. Stock index or the Philippine Stock Exchange Index (PSEi) is a list of the top 30 companies. The shares that are part of the stock index are also called blue chip stocks.
The Opportunity Fund also invests in the stock index, but it has the flexibility to also hold shares in other companies with the potential for growth. These companies are called second-liners, meaning that they can be part of the index in the future. They are either the top or one of the biggest in their respective industries. Shares that fall into this group are media giants GMA7 and ABS-CBN, as well as retail conglomerates Puregold and Robinsons Retail.
Chinese Tycoon Fund
The Chinese Tycoon Fund is what its name is about. It is invested in companies owned by Filipino-Chinese entrepreneurs that are part of the stock index. The objective of the fund is to take advantage of the growth story of these companies, which are more into consumer and retail. Shares that are included usually are Universal Robina Corporation, Jollibee Foods and GT Capital Holdings.
Spanish-American Legacy Fund
The Spanish-Legacy Fund is focused on companies owned by entrepreneurs with Spanish or American lineage. Its shares are usually found in industries that have stable earnings like power, utilities, and property. They have historically paid out dividends. Part of its portfolio include shares of companies such as Aboitiz Power, Meralco, PLDT and Manila Water.
AXA’s Retire Smart Funds
The Retire Smart Funds are unique in a way that assets are bought or sold according to your risk profile. As you approach your retirement, riskier assets are traded off and safer ones are bought. Generally, the funds are in equities, corporate bonds, government bonds, and cash. The proportion of each assets are automatically re-balanced.
Currently, there are funds available.
Retire Smart 2030 Fund
The Retire Smart 2030 Fund sets the retirement year at 2030. The asset mix then diversified in a way that risky ones with higher potential for growth are bought at the start of the plan and then sold in favor of safer securities.
Retire Smart 2035 Fund
Just like the first fund, the Retire Smart 2035 Fund is a long-term investment that sets retirement age at 2035. It gradually divests from equities and more towards fixed income as the target date approaches, coinciding with risk appetite associated with age.
Retire Smart 2040 Fund
The Retire Smart 2040 Fund has a target date of 2040. As it approaches that date, the asset mix is re-balanced for interest-bearing securities. Meaning, stocks are traded with bonds to match your life’s needs at any stage of your life.
Retire Smart 2045 Fund
Another long-term investment, the Retire Smart 2045 Fund is ideal for people who are looking forward to retire in the year 2045. From the start, majority of assets are in equities and then gradually would be replaced with more stable, conservative assets.
AXA’s Bond Funds
AXA Philippines also has several bond funds, namely:
Philippine Wealth Bond Fund
The Philippine Wealth Bond Fund is a long-term investment fund. It is primarily invested in fixed income securities such as those that are traded in money market and bonds that are issued by the Philippine government.
The 3GX$-B19 Fund is another bond fund. The difference is that it is invested in bonds issued by the Philippine government in dollar denomination. The fund offers capital protection and varying guaranteed returns with the fund maturing in June 2019. The Premium bond fund also offers the potential income.
The 3GX-B20 Fund has a maturity that is scheduled in 2020. It provides guaranteed returns and potential upside earnings from the Opportunity Fund, Chinese Tycoon Fund or Spanish-American Legacy Fund.
Just like the previous fund, the 3GX-B21 Fund is invested in the Philippine sovereign bonds. With its maturity scheduled on March of 2021, it is ideal for people who would want to protect their capital or guaranteed returns with the potential upside earnings provided by the Opportunity Fund, Chinese Tycoon Fund or Spanish-American Legacy Fund.
Philippine Wealth Balanced Fund
The Philippine Wealth Balanced Fund is allocated in treasury bonds and stocks with a small portion for money market. The goal of the fund is to carry an asset mix that features interest income from bonds and capital gains and dividends from equities.
Treasury bonds are debt instruments issued by the Philippine government. Maturities range from 0 to 25 years. The stocks are shares from publicly-traded companies on the Philippine Stock Exchange.
Philippine Peso Liquidity Fund
The Philippine Peso Liquidity Fund is the only money market fund by AXA Philippines. It is can be a temporary fund when market situation is very unpredictable. As a haven during volatile times, the fund is open for clients who would wish to park their money while awaiting for volatility to subside.