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mutual funds
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True or False
True or False
True or False
True or False
Investing Myths
• Higher Risk• Incompatible with your goal and risk profile• Must be long-term• Could be a scam• High returns or income do not always
translate to wealth
The Highest Return, is always the Best
Investing Myths
• Risk is not just about losing money• Risk is also about not having enough in the end• Fail to meet financial goals
Better safe than sorry.
• Delayed gratification• Debt will lead to the need to sacrifice• Savings result to financial freedom
Saving and Investing means financial sacrifice.
Investing Myths
I can always start later.
What will you choose?What will you choose?a)a) P100,000.00 or P100,000.00 or b)b) P0.01 doubled everyday for 30 days?P0.01 doubled everyday for 30 days?
Who will have more at age 65?Who will have more at age 65?a)a) A 21 year old who saves P10,000 per year for 44 years at 12% A 21 year old who saves P10,000 per year for 44 years at 12%
or; or; b)b) A 31 year old saving TWICE the amount for 34 years at the A 31 year old saving TWICE the amount for 34 years at the
same rate?same rate?
• Miss-out on compounding periods• Need to save more of your income• Need to take more risk to meet goals
Investing Myths
Timing is everything.
B
S
S
SS
BB
B
• Hindsight is always 100% right
• Easier said than done "I have no idea on timing. It’s
easier to tell what will happen than when it will happen.” -Warren Buffet
• Better left to the experts
• Successful investing is not a Successful investing is not a matter of TIMINGmatter of TIMING
• ItIt’’s a matter of TIMEs a matter of TIME
Investing Myths
Income – Expenses = SAVINGS
Income – SAVINGS = Expenses
• Pay yourself first!• Higher income or yields do not result to wealth• FINANCIAL DISCIPLINE = WEALTHFINANCIAL DISCIPLINE = WEALTH
• A partnership between three institutions
1. First Metro Investment Corporation (FMIC)
2. Catholic Educational Association of the Philippines (CEAP)
3. Marist Brothers Foundation
• Asset management company
• Manages seven (7) mutual funds
• Aggregate AUM of P15 Bln
Company Profile
Fund Management Structure
Mutual Funds• Investment companies registered with the SEC.
• Investors become shareholders of the fund or funds of their choice
• Pools the money of shareholders, with the same investment objectives, through the issuance of shares.
• The resulting size of the fund allows it to invest in a basket of securities
• It is managed by full-time professionals.
Mutual Funds
Corporate Structure
SHAREHOLDERS
BOARDOF
DIRECTORS
INVESTMENTADVISOR
FUNDADMINISTRATOR
PRINCIPALDISTRIBUTOR
CUSTODIANBANK
EXTERNALAUDITOR
Pricing: Based on a fund’s Net Asset Value per Share (NAVPS)•Price of a mutual fund share•Computed and published dailyInvestment Amounts:
Mutual Funds: Valuation
5,000 - 99,999 2.0%
100,000 - 499,999 1.5%
500,000 - 1,999,999 1.0%
2,000,000 & Up 0.5%
3.0% (Max.)
1.0%
0.5%
1.0%
0.0%
SALES LOAD / ENTRY FEES
EXIT / REDEMPTION FEES< 6 Months
6 Months or more
SALEF, SALBF, SALFIF
OWNFMGOF
< $40,000
$40,000 or more
SALEF 1.875%
SALBF 1.875%
SALFIF 1.750%
OWN 1.750%
FMGOF 1.750%
MANAGEMENT FEES P.A.
Applicable Fees:
MINIMUM INVESTMENTS
INITIAL ADDITIONAL
SALEF P5,000 P1,000
SALBF P5,000 P1,000
SALFIF P5,000 P1,000
OWN P5,000 P1,000
FMGOF $10,000 $1,000
Example:
Investment Amount 100,000.00 Sales Load (1.5%) (1,500.00) Net Investment Amount 98,500.00
NAVPS 1.9700 No. of shares bought 50,000.00
PREV. SLIDE
How to Make Money in MFs
1.0000
1.5000
2.0000
2.5000
3.0000
3.5000
4.0000
4.5000
5.0000
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
NAVPS
Buy: 50,000 SharesNAVPS: 1.9700Value: P98,500
Buy: 50,000 SharesNAVPS: 1.9700Value: P98,500
Sell: 50,000 SharesNAVPS: 4.7200Value: P236,000
Sell: 50,000 SharesNAVPS: 4.7200Value: P236,000
A
B
Mutual Funds: Advantages
–Professional Fund Management–Diversification–Affordability–Liquidity–Safety (Regulation and Disclosure)–Convenience (Shareholder Services)–Daily Pricing–Tax Free
2006 Net Yield 67.58%2007 Net Yield 12.62%2008 Net Yield -30.70%2009 Net Yield 53.11%2010 Net Yield 63.37%2011 Net Yield 8.18%2012 Net Yield 27.32%2013 Net Yield -1.35%03.19.2014 7.11%CAGR 21.07%
• P7.3 Bln. AUM• Launched in October 2005• Long-term investment (5 Years or
more)• Growth Oriented• Full-equity fund• Invested in stocks listed in the PSE• Ideal for investors looking for the
capital growth opportunities of the stock market
FAMI Mutual Funds
TYPICAL PORTFOLIO MIX
Cash10%
Properties15%
Telecoms20%
Power20%
Banking10%
Transport 15% Holding Cos.
10%
Maximum Equity Exposure: 90%
• Fee Structure
FAMI Mutual Funds
-25.0%
75.0%
175.0%
275.0%
375.0%
475.0%
O-05 O-06 O-07 O-08 O-09 O-10 O-11 O-12
SALEF Vs. PSEi
NAVPS Performance Benchmark Performance
-25.0%
75.0%
175.0%
275.0%
375.0%
475.0%
O-05 O-06 O-07 O-08 O-09 O-10 O-11 O-12
SALEF Vs. PSEi
NAVPS Performance Benchmark Performance
Cash10%
Bond Portfolio30%
Stock Portfolio60%
Maximum Equity Exposure: 60%
2007 Net Yield 4.07%2008 Net Yield -4.86%2009 Net Yield 45.36%2010 Net Yield 61.97%2011 Net Yield 6.62%2012 Net Yield 25.27%2013 Net Yield 1.04%03.19.2014 3.55%CAGR 16.05%
• P2.5 Bln AUM• Launched in May 2007• Long-term investment (2 to 5 years)• Moderate Returns• A balance of stocks and bond investments• Ideal for investors looking for capital
growth opportunities of the stock market tempered by the steady cash flow from fixed-income securities.
FAMI Mutual Funds
TYPICAL PORTFOLIO MIX
• Fee Structure
FAMI Mutual Funds
-55.0%
-5.0%
45.0%
95.0%
145.0%
195.0%
M-0
7
A-0
7
D-0
7
M-0
8
J-08
S-08
D-0
8M
-09
J-09
S-09
D-0
9M
-10
J-10
S-10
D-1
0M
-11
J-11
S-11
D-1
1
M-1
2
J-12
S-12
D-1
2M
-13
J-13
S-13
SALBF Vs. Belnded Index
NAVPS Performance Benchmark Performance
-55.0%
-5.0%
45.0%
95.0%
145.0%
195.0%
M-0
7
A-0
7
D-0
7
M-0
8
J-08
S-08
D-0
8M
-09
J-09
S-09
D-0
9M
-10
J-10
S-10
D-1
0M
-11
J-11
S-11
D-1
1
M-1
2
J-12
S-12
D-1
2M
-13
J-13
S-13
SALBF Vs. Belnded Index
NAVPS Performance Benchmark Performance
Cash10%
Government Securities
45%
Corporate Papers
30%
Dep. Subs.15%
Maximum Equity Exposure: 0%
2006 Net Yield 14.85%2007 Net Yield 4.07%2008 Net Yield 2.40%2009 Net Yield 5.36%2010 Net Yield 11.56%2011 Net Yield 12.34%2012 Net Yield 11.31%2013 Net Yield 18.92%03.19.2014 -1.55%CAGR 10.11%
• P3.3 Bln AUM• Launched in October 2005• Medium to long-term (6 months to 2
years)• Conservative Fund• Purely fixed-income instruments• Ideal for investors looking for reasonable
returns but are wary about market volatilities
FAMI Mutual Funds
TYPICAL PORTFOLIO MIX
• Fee Structure
FAMI Mutual Funds
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%O
-05
F-06
J-06
O-0
6
F-07
J-07
O-0
7
F-08
J-08
O-0
8
F-09
J-09
O-0
9
F-10
J-10
O-1
0
F-11
J-11
O-1
1
F-12
J-12
O-1
2
F-13
J-13
SALFIF Vs. HSBC ALBI
NAVPS Performance Benchmark Performance
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%O
-05
F-06
J-06
O-0
6
F-07
J-07
O-0
7
F-08
J-08
O-0
8
F-09
J-09
O-0
9
F-10
J-10
O-1
0
F-11
J-11
O-1
1
F-12
J-12
O-1
2
F-13
J-13
SALFIF Vs. HSBC ALBI
NAVPS Performance Benchmark Performance
• P58 Mln AUM• Registered in April 2013• Lon-term Dividend and Growth
Balanced Fund• Long-term investment (2 to 5 years)• Annual Stock Dividend when
profitable• Ideal for investors who require
regular draw-downs to generate cash flow
FAMI Mutual Funds
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Jan-
12
Apr
-12
Jul-1
2
Oct
-12
Jan-
13
Apr
-13
Jul-1
3
Oct
-13
OWN Blended Index
PSEi Blended Index (50:50) Bond Index
Cash10%
Bond Portfolio30%
Stock Portfolio60%
Maximum Equity Exposure: 60%
• Fee Structure
FAMI Mutual Funds
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000 Ja
n-09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Jan-
12
Apr
-12
Jul-1
2
Oct
-12
Jan-
13
Apr
-13
Jul-1
3
Oct
-13
OWN Blended Index
PSEi Blended Index (50:50) Bond Index
PERFORMANCE 1-YR 3-YR 5-YRTotal Returns 5.2% 31.4% 54.2%CAGR 5.2% 9.5% 9.1%
PERFORMANCE 1-YR 3-YR 5-YRTotal Returns 5.2% 31.4% 54.2%CAGR 5.2% 9.5% 9.1%
• P145 Mln AUM• Registered in December 2009• Global Balanced Fund• Ideal for investors who want
access to the market opportunities in other countries
FAMI Mutual Funds
Global Bonds45%
Asian Stocks15%
European Stocks
15%
US Stocks15%
Cash10%
TYPICAL PORTFOLIO MIX
150.00
200.00
250.00
300.00
350.00
400.00
450.00
J-09
A-09
J-09
O-0
9
J-10
A-10
J-10
O-1
0
J-11
A-11
J-11
O-1
1
J-12
A-12
J-12
O-1
2
J-13
A-13
J-13
O-1
3
J-14
FMGOF Benchmark
ACWI Standard (Large+Mid Cap)
S&P/Citigroup International Treasury Bond Ex-U.S. Index
BLENDED INDEX
Cash10%
Bond Portfolio30%
Stock Portfolio60%
Maximum Equity Exposure: 60%
• Fee Structure
FMGOF Benchmark
150.00
200.00
250.00
300.00
350.00
400.00
450.00
J-09
A-09
J-09
O-0
9
J-10
A-10
J-10
O-1
0
J-11
A-11
J-11
O-1
1
J-12
A-12
J-12
O-1
2
J-13
A-13
J-13
O-1
3
J-14
FMGOF Benchmark
ACWI Standard (Large+Mid Cap)
S&P/Citigroup International Treasury Bond Ex-U.S. Index
BLENDED INDEX
1 YR 3-YR 5-YR Total Return7.61% 6.04% 9.41% 62.48%
1 YR 3-YR 5-YR Total Return7.61% 6.04% 9.41% 62.48%
Transaction Options for FMGOF
FACILITY CLREARING TIME FEES REMARKS
Philippine Domestic Dollar Transfer System (PDDTS-Netting System)
1 day; end of day crediting
$29.20 (may vary with other banks) + $20 (receiving)
Application for Miscellaneous transfer
Demand Draft 30 to 45 days Depends on the amount (DST, commission, $2.50 clearing fee)
Request for Demand Draft
Corporate Check 30 to 45 days Nil Check Fund transfer via settlement account 0 Nil for M.M.
0.25% for provincial branches Minimum ADB is $500
Applications of Mutual Funds
Asset - Liability matching
Funding for future projects
Retirement Funding
Employee retention programs
Diversification of existing portfolios
Monthly Investment Program for employees
How To Build A Winning Portfolio
• Mutual funds are very useful in attaining many long-term financial goals.
• They are not a “cure-all solution” for all financial goals.
• Knowing your goals will enable you to implement the PORTFOLIO APPROACH IN PERSONAL WEALTH MANAGEMENT.
• Begin with the end in mind
How To Build A Winning Portfolio
OBJECTIVE: To maximize returns within acceptable risk parameters.
VUL15%
Stocks8%
Bonds25%
Time Deposit32%
Mutual Fund20%
Investment Portfolio
How To Build A Winning Portfolio
OBJECTIVE: To meet personal financial objectives.
Protection15%
Repairs8%
Education25%
Emergency Fund32%
Retirement20%
Investment Goals
How To Build A Winning Portfolio
INVESTMENT GOALS INVESTMENT VEHICLE
Goal Duration Feature Instrument
Emergency Fund Immediate Liquidity Deposits, Money Market
Home Repair Near Term Liquidity Bonds, Time Deposit
Education Medium Term Growth + Liquidity Balanced Fund
Retirement Long Term High Growth Equity Fund, Stocks
Protection Long Term Guarantee Insurance, HMO
Investing Tips
• Start Early• Know your objectives
• Long-term• Short-term
• Prioritize your objectives• Always have the right
mindset• Know your risk profile• Choose investments wisely• Always maintain balance
SALEF 15.0%SALBF 12.5%SALFIF 7.0%
YEAR-END SALEF SALBF SALFIFInitial Inv. PHP 5,000.00 PHP 5,000.00 PHP 5,000.00
1 18,771.12 18,469.36 17,814.88 2 34,635.44 33,639.51 31,530.84 3 52,929.45 50,735.68 46,213.03 4 74,043.74 70,012.89 61,931.29 5 98,431.69 91,759.96 78,760.53 6 126,619.54 116,303.93 96,781.05 7 159,218.15 144,015.15 116,078.97 8 196,936.57 175,313.02 136,746.65 9 240,597.83 210,672.48 158,883.09 10 291,157.27 250,631.33 182,594.47 15 693,113.09 543,789.72 329,061.24 20 1,535,954.97 1,087,019.57 535,965.40 25 3,307,823.74 2,095,936.50 828,547.11 30 7,037,320.61 3,972,063.43 1,242,587.49
The above table is for illustration purposes only. Projected amounts are not guaranteed. The yields of the mutual funds are subject to market conditions and
volatilities and will vary accordingly.
MONTHLY INVESTINGProjected Returns
INVESTMENT AMOUNT / MONTH
PHP 1,000.00
Accumulating Wealth via MIP
SALEF 15.0%SALBF 12.5%SALFIF 7.0%
YEAR-END SALEF SALBF SALFIFInitial Inv.
1 - - - 2 - - - 3 - - - 4 - - - 5 - - - 6 - - - 7 - - - 8 - - - 9 - - - 10 - - - 15 - - - 20 - - - 25 - - - 30 - - -
The above table is for illustration purposes only. Projected amounts are not guaranteed. The yields of the mutual funds are subject to market conditions and
volatilities and will vary accordingly.
MONTHLY INVESTINGProjected Returns
INVESTMENT AMOUNT / MONTH
Accumulating Wealth via MIP
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