Top Performing UITFs in the Philippines as of September 30, 2015

Unit Investment Trust Funds, popularly referred to as UITFs are pooled funds similar to Mutual Funds, only it is managed by Banks.

Here are the Top Performing UITFs in the Philippines from UITF.com.ph as of September 30, 2015.

Top 5 Equity Funds (Year-to-Date)

Bank Fund Name ROI
Bank of the Philippine Islands BPI Philippine High Dividend Equity Fund -0.51%
China Banking Corporation CBC EQUITY FUND -0.53%
Bank of the Philippine Islands BPI Equity Value Fund -1.40%
Bank of the Philippine Islands Odyssey Tax-Exempt Philippine Equity Fund -2.59%
Bank of the Philippine Islands Odyssey Philippine Equity Fund -2.87%

Top 5 Balanced Funds  (Year-to-Date)

Bank Fund Name ROI
Philippine Bank of Communications BEST BALANCED FUND 1.30%
Development Bank of the Philippines GINTONG SIKAP SECURE FUND 0.55%
Bank of the Philippine Islands BPI Balanced Fund 0.08%
Bank of the Philippine Islands Odyssey Diversified Capital Fund -0.53%
Robinsons Bank RBank Balanced Fund -0.54%

Top 5 Intermediate Term Bond Funds (Year-to-Date)

Bank Fund Name ROI
Security Bank Corporation SB Intermediate Term Peso Bond Fund 2.35%
Portfolio Duration: 0.71 year(s) as of 2nd quarter of 2015
Union Bank UnionBank Infinity Prime Fund 1.85%
Portfolio Duration: 2.41 year(s) as of 2nd quarter of 2015
Union Bank UnionBank Medium Term Fixed Income Portfolio 1.65%
Portfolio Duration: 2.28 year(s) as of 2nd quarter of 2015
Bank of the Philippine Islands BPI Premium Bond Fund 1.29%
Portfolio Duration: 1.26 year(s) as of 2nd quarter of 2015
China Banking Corporation CBC INTERMEDIATE FIXED-INCOME FUND 1.24%
Portfolio Duration: 0.04 year(s) as of 2nd quarter of 2015

Top 5 Medium Term Bond Funds (Year-to-Date)

Bank Fund Name ROI
BDO Unibank, Inc. BDO PESO FIXED INCOME FUND 3.49%
Portfolio Duration: 3.27 year(s) as of 2nd quarter of 2015
BDO Unibank, Inc. BDO PESO BOND FUND 2.96%
Portfolio Duration: 3.32 year(s) as of 2nd quarter of 2015
Asia United Bank Peso Investment Trust Fund 2.62%
Union Bank UnionBank Philippine Peso Fixed Income Portfolio 1.91%
Portfolio Duration: 3.97 year(s) as of 2nd quarter of 2015
BDO Unibank, Inc. BDO MERIT FUND MEDIUM TERM PORTFOLIO 1.81%
Portfolio Duration: 3.65 year(s) as of 2nd quarter of 2015

Top 5 Long Term Bond Funds (Year-to-Date)

Bank Fund Name ROI
AB Capital AB CAPITAL PREMIUM FUND 6.29%
Portfolio Duration: 1.09 year(s) as of 3rd quarter of 2015
Union Bank UnionBank Long Term Fixed Income Portfolio 2.76%
Portfolio Duration: 4.44 year(s) as of 2nd quarter of 2015
Union Bank UnionBank Tax Exempt Portfolio 2.62%
Portfolio Duration: 2.65 year(s) as of 2nd quarter of 2015
Bank of the Philippine Islands ABF Philippines Bond Index Fund 1.72%
Portfolio Duration: 7.61 year(s) as of 2nd quarter of 2015
Security Bank Corporation SB PESO BOND FUND 1.58%
Portfolio Duration: 5.04 year(s) as of 2nd quarter of 2015

Disclaimer: Past performance is not an indication of future results. There are several risks associated with investing in mutual funds which are further discussed and enumerated in the fund’s prospectus. Please read the fund’s prospectus before you start investing. 

Top Mutual Funds in the Philippines as of September 30, 2015

As of September 30, 2015, the Philippines has a total of 54 active Mutual Fund Companies as per Philippine Investment Fund Association (PIFA).

top performing mutual funds in the philippines
Top 5 Equity Funds Year To Date

Fund Name NAVPS YTD Return
United Fund, Inc. 3.1352 -3.59%
Philippine Stock Index Fund Corp. 767.82 -4.77%
Philequity PSE Index Fund Inc. 4.5688 -5.12%
First Metro Save and Learn Equity Fund,Inc. 5.2842 -5.17%
ALFM Growth Fund, Inc 245.41 -6.06%

Top 5 Balanced Funds Year To Date

Fund Name NAVPS YTD Return
Cocolife Dollar Fund Builder, Inc. $0.03506 1.33%
Bahay Pari Solidaritas Fund, Inc. 2.0028 -1.53%
First Metro Save and Learn Balanced Fund Inc. 2.7115 -3.16%
PAMI Horizon Fund, Inc. 3.5733 -4.30%
Sun Life of Canada Prosperity Balanced Fund, Inc. 3.5974 -4.34%

Top 5 Bond Funds Year To Date

Fund Name NAVPS YTD Return
Cocolife Fixed Income Fund, Inc. 2.5113 3.76%
ATR KimEng Total Return Bond Fund Inc. $1.0864 2.23%
Ekklesia Mutual Fund Inc. 2.0529 1.69%
ALFM Dollar Bond Fund, Inc. $415.12 1.69%
Grepalife Fixed Income Fund Corp. P 1.6448 1.43%

Top 10 Mutual Funds in the Philippines as of September 30, 2015

Fund Name Fund Type NAVPS 5 yr. Return
1 Bahay Pari Solidaritas Fund, Inc. Balanced Fund 2.0028 13.49%
2 Philequity PSE Index Fund Inc. Equity Fund 4.5688 11.73%
3 Philequity Fund, Inc. Equity Fund 33.631 11.64%
4 Philippine Stock Index Fund Corp. Equity Fund 767.82 11.27%
5 First Metro Save and Learn Equity Fund,Inc. Equity Fund 5.2842 10.57%
6 First Metro Save and Learn Fixed Income Fund,Inc. Bond Fund 2.2119 9.43%
7 NCM Mutual Fund of the Phils., Inc Balanced Fund 1.7819 8.68%
8 Sun Life Prosperity Philippine Equity Fund, Inc. Equity Fund 3.806 8.57%
9 ATRAM Dynamic Allocation Fund, Inc. Balanced Fund 1.765 8.53%
10 First Metro Save and Learn Balanced Fund Inc. Balanced Fund 2.7115 8.40%

Disclaimer: Past performance is not an indication of future results. There are several risks associated with investing in mutual funds which are further discussed and enumerated in the fund’s prospectus. Please read the fund’s prospectus before you start investing.

Winning Strategies to Getting Out of Debt

Debts, especially credit card debts, have become a real part of the modern day life.

Many of us had fallen to the trap of this modern day slavery – perhaps of our own doing or due to some outside forces that we have little or no control of. Nevertheless, these debts have been putting a lot of stress in many peoples day to day lives – directly affecting the quality of their lives.

With this video, Registered Financial Planner Marvin Germo discuss some tips that we may follow to get out of this unwanted financial mess.

Here are some insights that our worth highlighting.

Take inventory of all of your debts

To further understand the facts of our debts, laying them all, written in a paper will allow us to see clearly our current financial circumstances.

Also, this activity will help us see the debts that charge the highest interests, which we should prioritise to pay, and manage those that are not interest-heavy.

Marvin and the hosts also talks about an option on making compromise with the lending institutions in removing the interests on existing loans, but emphasized that this route is not easy to take.

Though it may be true that nobody gets to jail by not paying debts, having bad credit records will forgo future opportunities of borrowing funds for future endeavours like buying a house, a car, and so on.

Sell unnecessary stuffs at home

In most households, there are items that just idle in closets, cabins, and many areas of the house. Marvin suggested to just sell those stuffs and use the proceeds in paying off debts.

We may use OLX to sell these pre-loved items.

Look at your budget

Debts are often incurred due to how we spend and on the things that we spend on. It is very important to look at our budget and remove the unnecessary expenses.

What’s important is that we do things regularly and consistently for a long period of time. As long as we have the drive and determination to be debt-free, everything is possible.

How much do I need to start a VUL Policy?

Hi,

I’m interested to start my very first life insurance policy, and I’m considering to get a VUL because aside from having life insurance, I will also be invested in the stock market, which is nice.

My question is this, since my salary is not that high, how much can do I need to invest to start my VUL policy?

Appreciate your response.

Thank you

Money Talks Before Tying the Knot: Pre-Marriage Money Talk c/o ANC on the Money

Money has always been a very touchy subject, especially in relationships. It is definitely easier not to talk about it, however, failure to find comfort in talking about it freely could have a negative impact in a relationship built by a sincere feeling of love.

Here’s a great video that covers how to address this subject early on the relationship.

In a romantic relationship, we should remember that it is not always about romance, about love, and about those cheesy stuffs (cheesy if you’re outside that romantic relationship). Since most relationships are there for the long haul, it’s best to talk about the practical stuffs early on, particularly about money.

Explore Your Financial Compatibility

Unless you are in a short time/term relationship, financial compatibility should always be part of the game plan.

Compatibility doesn’t really mean that each partner should have the same views in all aspects of life – as Edrick Mendoza mentioned in this video, that’s a boring relationship.

It simply means that both partners eventually get along, no matter how different their views are in different things.

Money Compatibility

Financial compatibility is one of the practical areas that should be tackled in a romantic relationship. Understanding compatibility in this area is very crucial.

Okay, but how?

In this video, Maricris San Diego, pointed out some questions we may ask ourselves to help us determine if we and our partners view money the same way.

  • Do our partners value money?
  • Do we view borrowing the same way? How about spending?
  • Are our lifestyle choices compatible? (perhaps one spends a lot and the other is very thrifty)

All these questions may be answered even while we and our partners are still dating – in a boyfriend/girlfriend stage.

Considerations in identifying compatibility

  1. While still dating, start watching out for signs on how our partners treat money – are they a show-off and spends a lot, or are they high maintenance, etc…
  2. How do they live their lives? Do the live within their means or do they spend unnecessarily.
  3. Start talking about where they invest, or where they put their money.

Proper ways of Probing and Finding Answers

  1. Through observation
    On the early stage of the relationship, the first way to identify money compatibility is to observe one’s partner on how they behave and use money.
  2. Ask questions
    As the relationship gets serious, it is imperative to talk about money since it will be a very important area that will affect the success of the relationship for the long haul.

What if the difference are just too great?

Well, what about it? People are unique and different.

We adjust along the way. The careless spender could change to a conscious spender, and a very thrifty partner could learn to spend a bit and enjoy life a bit more.

In a relationship, we will change and evolve along the way.

Important Money Questions to Ask Before Tying the Knot

  1. What each owe and own.
    Upon marriage, assets and liabilities of each partner becomes conjugal or combined. This means that everything that each partner owns and owe will be combined. Ownership of these assets and responsibilities for liabilities will be divided equally to each partner.
  2. Kind of lifestyle each partners want
    Do you want a luxurious lifestyle – a lot of travels, entertainment, etc…? This should be discussed and match against the reality of existing resources and financial capability.
  3. Expectations and roles in the relationship on how money will be managed
    Who will manage the household finances? Who’ll take care of the budget? and more.. This should be discussed transparently.

Advice for Married Couples

  1. Start having an inventory of what they own and owe.
  2. Look at the family budget
  3. Talk about how they will be paying out debts, if any.
  4. Talk about the long term plans

How to Deal With The Filipino Culture of Extended Family

  1. Be transparent in identifying which obligations from parent and siblings that will continue after marriage.
  2. What are the support they can get from family members (discuss what your support system will be like)

The Ultimate Guide in Getting Life Insurance in the Philippines

We already know that Life Insurance should always be part of your personal finance strategy, everybody is talking about it, and all personal finance gurus are recommending it.

However, how should you start your journey in getting one?

Let me guide you through the things you should do, step-by-step.

understand what you need

Before anything else, there are few things you need to ask yourself to ensure that you will get what you need.

Have an inventory of what you have.

To have a better understanding on what you need, it is best to have an inventory of all assets and liabilities that you have.

These inventory should include the following:

  • Cash In Bank (all banks including payroll accounts)
  • Real Estate properties (indicate a market value)
  • Insurance Policies
  • Investments (Stocks, Mutual Funds, Businesses, etc…)
  • Liabilities (bank loans, credit card debts, etc…)

Be honest to yourself. These information will help you understand where you are financially. As you will notice, you’ll be creating a personal Balance Sheet.

Understand your cash flows – your income and your expenses.

First step is to list all your income sources, no matter how small. The purpose is to have the most accurate understanding of how much money is coming in.

Next is to classify your expenses. Separate fixed and variable expenses.

Fixed? Variable?

Fixed Expenses are those expenses that you can no longer decrease, well, because they are fixed. Example of these expenses are your monthly rent, car amortisation, postpaid plans, cable tv bills, etc…

On the other hand, variable expenses are those expenses that you have control. These are the expenses that you may increase or decrease . Example of these expenses are your allotment for food, transportation, excess of your postpaid plans, etc…

Identifying your variable expenses will allow you to understand how much you can adjust and bring into savings.

Identify how much you can set aside on your monthly budget.

Upon analysing your cash flows, identify how much the maximum amount you can save on your monthly budget.

If you are happy on your current cash flows, that’s good.

If you wish to minimise further your variable expenses, then check how much further you can save.

At this stage, you should already know how much you can set aside.

List down your financial goals

Money is just a means to an end, a tool that we use to fund some life’s needs, wants, and experiences. That’s why it’s very important to identify what we are really trying to accomplish so that we’ll know how much we are targeting, and what we can do to ensure we meet those goals.

In identifying financial goals, it’s best to classify their term – either short term, medium term, or long term, and find balance in all of it. You may use the following as a guide:

  • if the goal is targeted in 5 years or below, classify them as short term
  • if the goal is targeted in 6 to 10 years, classify them as medium term.
  • for goals that are targeted in more than 10 years, classify them as long term.

In this goal setting process, always allot something for your retirement, and if you have children, an education fund for them.

Identify how much life insurance coverage you need

It’s very important to identify how much coverage you need to ensure that you won’t be purchasing more than what you need.

For a basic computation, you may get your annual expenses and multiply that by 10. What comes up is your ideal life insurance coverage which you should be trying to meet.

If you currently have debts, add that, and subtract any existing life insurance coverage you may have.

Allot a specific budget for each goal that you have

Prepare an initial budget on how much you’ll be allotting for a specific goal to ensure that you have something set aside for each of the financial goals you want to achieve.

select life insurance company

Now that you are done identifying where you are financially and the resources that you have to plan for the future, it’s time to check out the life insurance company/s that you may want to transact with.

One way to do it is to visit the website of the Insurance Commission and get a list of legitimate Life Insurance Companies here in the Philippines.

For easier and more reliable reference, just select from the top companies.

  • Sun Life Financial
  • Manulife
  • Insular Life
  • Pru Life UK
  • Philam Life
  • Axa Life

You can never go wrong with either of these companies.

Look for a Financial Advisor

To be able to transact with the Life Insurance Company that you have chosen, you need to find an Insurance Advisor/Financial Advisor/Insurance Agent.

You may know a friend, a relative, or a family member who is an advisor. If not, you may send us a Request for a Life Insurance Quote and we’ll send a Financial Advisor within your area. 

The job of an Insurance Advisor is to analyse your current financial situation and your goals and match financial products that could help you achieve your financial goals.

The question is, what should you be looking for in an Insurance Advisor?

Here are some characteristics that you should consider your Insurance Advisor should have.

Competence

The main task of a financial advisor is to understand your unique personal circumstances and develop a program that will help you achieve your financial goals.

Competence pertains to knowledge about personal finance as a whole and knowledge on the products they represent.

If possible, look for an advisor who distributes both Life Insurance and Mutual Fund products to provide you more options – but not really a deal-breaker.

Visibility and accessibility

An insurance advisor will become your representative in the company that you chose. It is best that they are always accessible to address your concerns – either personally, or through their staffs.

Although customer services of the insurance company that you may choose are always available to help, it’s easiest to talk to the advisor who helped you with your policy (or their staffs) to speed up in addressing your concerns.

Trustworthiness

This goes without saying.

Since this is a conversation about money, it’s mandatory that you trust the people you transact with.

Just ensure that every transaction with a financial advisor is supported by provisional receipts issued by their respective companies.

BONUS Consideration

Find an advisor who is trying to share their knowledge and expertise through their own websites or other platforms. More often than not, these advisors are committed to bringing themselves to the public for visibility, accessibility, and exhibition of their competence.

These advisors are keeping a reputation by being a public image, thus could be very trustworthy (not a guarantee though).

what to discuss with a financial advisor

As I have mentioned earlier, the role of an insurance advisor is to identify where you are currently in your finances, understand what are your current resources to help you move forward with your financial goals, and develop an actionable program that will suit your personal circumstances (preference, budget, behaviour, etc…)

The job of an insurance advisor is to keep asking. Here are some questions he/she will ask during your meeting.

  • Do you have any existing life insurance policies?
  • Do you have any investments? (paper assets, real estate, businesses)
  • Do you have children? How old?
  • How much is your monthly income? Monthly expenses? Monthly savings?
  • How are you managing your finances?
  • What the other assets you may have? Any liabilities?

As you will notice, the answers to these questions are present in your personal Balance Sheet and Income Statement.

You may answer these questions, or you may not. It’s up to you.

The ideal scenario is that you already have computed what you need (kindly refer to your computations in section 2), and how much you can shell out monthly, quarterly, semi-annually or annually, for the said policy.

You can just send these information to your insurance advisor so he/she can create a program that will fit your budget and preference.

For better understanding and in order for you to explore your options, it is best to meet an insurance advisor personally.

Choosing the Best Proposal

As I have mentioned earlier, the role of an Insurance Advisor is to understand your money preference and your needs, then create an insurance program around it. We refer to these insurance programs as Life Insurance Proposals or Life Insurance Quotes.

During the course of your discussions with the insurance advisor, you may end up having several proposals on hand that could be overwhelming to review.

Now that’s a challenge. Which one will you pick?

Here’s the general rule: choose the policy that will meet your objectives.

People choose different insurance programs based on their unique individual preference. There is no exact identifier on which is best to choose, but you may just take note of the following proposals that may be given to you:

Term Insurance (most inexpensive but no savings/cash values)

This type of insurance is like a car insurance – you’ll pay for it as long as you want it. It will not accumulate savings or fund values.

Good thing about Term Insurance is that it provides the highest life insurance coverage for the most inexpensive rate.

For some people, what they don’t like about term insurance is that it’s like spending for something without any expectation that they can get something in return.

Endowment Insurance (Life Insurance plus savings but limited duration)

Aside from the basic life insurance, Endowment Insurance provides a savings component that gives the policyholder a specified amount after a specified year – say you’ll be receiving P50,000 starting the 10th year upto the 20th year.

You’ll also be entitled to yearly dividends.

This proposal is more pricey than term insurance and offers a very limited life insurance coverage period, usually 20 years. Unlike the first proposal though, you’ll be receiving a lump sum of money at the end of the term, usually higher than what you will be paying for the whole policy.

Whole Life Insurance (Life Insurance with Savings, for life)

Very similar to Endowment Insurance, but this insurance policy last for a lifetime, well at age 100.

It’s a bit pricey, same as endowment, but over time, you’ll get what you have invested, slowly.

Variable Universal Life Insurance (Life Insurance with Investment on stocks and bonds)

This life insurance proposal is a combination of life insurance and mutual funds. I have written great details about this type of life insurance here.

Choosing the Best Proposal (2)

Once you have already decided which proposal to pick, you may start the application process with your insurance advisor.

Here’s how it will all go:

Fill up the application forms.

Usually, the only requirement that will be asked from you is the initial payment, and a copy of one valid government ID. Be sure to have those ready.

For payments, there are usually different mode of payment available – monthly, quarterly, semi-annual, and annually.

Be sure you get a provisional receipt from your insurance advisor.

Also, you’ll be issued a Certificate of Temporary Life Insurance that signifies that your life insurance is temporary effective until the policy is approved. This just means that even if your insurance application is still for processing, you’re already insured, subject to restrictions set individually by each insurance company.

Reminders

Ensure that you declare everything that needs to be declared – medical conditions, history, smoking habits, etc…

Failure to declare these things might cause headaches in the future for your beneficiaries. You may refer to the Two-Year Contestability Clause.

Also, if you’re an OFW, ensure that you are signing the documents within the Philippines. Signing application documents outside the Philippines might cause you troubles in the future.

The Insurance Advisor submits your application to the insurance company’s Customer Centres

From the point of submission to point of approval of your insurance application, it will take approximately 2 to 3 weeks to gain approval, depending on the life insurance company.

In between, there could be additional requirements to be asked by the approving departments of the insurance company (aka underwriters). You might also be asked to undergo Medical Exams.

Don’t worry about anything. Any subsequent procedures will cost you nothing. Some people take advantage of these things to check where their physical health.

Once your application has been approved, you will be issued a policy contract.

Investing In Life Insurance in the Philippines

Life Insurance: One of the Best Tool in Estate Planning (by Atty. Angelo Cabrera)

There are only two things that are certain in life – death, and taxes.

In this video, Atty. Angelo Cabrera pointed out great topics that are prevalent in today’s market.

Let’s get down with some basics and understand what Estate Taxes and Estate Planning are.

What is Estate Tax?

Upon death of an individual, all his properties should be transferred to the heirs (sa mga tagapagmana). That will only possible after payment of a transfer tax called estate taxes.

Estate taxes are unavoidable, thus, it’s necessary to plan for it.

This leads us to the second term.

What is Estate Planning?

Estate Planning is the act of proactively seeing (and foreseeing) the requirements and the needs in the transfer of assets should a property owner dies. Through estate planning we will be able to prepare what is bound to happen anyway (though timing is still uncertain) without having our loved ones worry about where to get the money to pay off estate taxes.

Disadvantage of Donation and Incorporation as way of avoiding estate taxes

In this video, Atty. Cabrera raised the usual practices of many in avoiding estate taxes and pointed out that Life Insurance is one of the best way to plan for our estate. In particular, he mentioned the disadvantages of the following for the sake of trying to avoid estate taxes.

1) Donating properties to the heirs while we are alive.

This premature transfer may destroy the character of our children because of instead of relying on their own God-given abilities to produce their own wealth, they no longer have to since they got the wealth from us.

2) Incorporation

This will push the children in a co-ownership regime that might lead them to a conflict situation, or inequitable situation where one ends up domineering and controlling while the other children/heirs suffer in silence.

As a result, many of the properties that are co-owned are left idle or uproductive.

Life Insurance and Estate Taxes

He also advised to load up as much life insurance possible until we’re still insurable. Insurability has the following considerations:

1) Age
2) Health
3) Financial Capacity