[arlene168]

Hi po.. please enlighten me naman sa absolute return strategy sa MF, mas ok daw kasi yon kesa sa cost averaging eh.. kaso nagugugluhan ako.. pano. lahat ba ng investment cost pati interest kelangan i pull out? or yung interest lang? salamat sa lahat ng sasagot! )

[kimerran]

first wala pong interest sa mutual funds.

[joconcepcion]

ang alam ko po, hindi po puedeng withdrawhin lang interest, kapag ipull-out mo lahat po yun! kaya para sa akin ang MF ay pang long term po.

[mxherr5]

Absolute return strategy is better as opposed to
cost averaging? Google says absolute return strategy
is a strategy that a mutual fund might take. In a nut
shell, it strives to make money regardless, as oppose
to traditional funds which pegs their performance to
a benchmark like the PSEi.

Its not a strategy that an investor on a mutual fund
would implement to get his money invested in a
mutual fund.

As far as I know, there's cost averaging and value
averaging as strategies for getting your money invested
in a fund.

Where did you learn about absolute return strategy ba
and how it could be applied as an investment strategy
for mutual funds?

[bauer]

absolute return strategy is entirely different from the definition of cost averaging. It cannot and should not be compared.

you may have an absolute return strategy mutual fund and at the same time implement cost averaging & value averaging so it's not actually an option that you can choose among the three. Thay can be done at the same time using only 1 fund.

maraming klase ng mutual fund or UITF fund na offer sa market, marami itong ibat ibang pangalan pero among the best funds eh yung fund managers na nag commit ng 'absolute return' sa mga investors kesa sa mga fund managers na nag commit lang sa mga 'benchmarks'.  mas mahirap kasi gawin at ma achieve ang absolute return.

[mamee]

Absolute return strategy is better as opposed to
cost averaging? Google says absolute return strategy
is a strategy that a mutual fund might take. In a nut
shell, it strives to make money regardless, as oppose
to traditional funds which pegs their performance to
a benchmark like the PSEi.

Its not a strategy that an investor on a mutual fund
would implement to get his money invested in a
mutual fund.

As far as I know, there's cost averaging and value
averaging as strategies for getting your money invested
in a fund.

absolute return strategy is entirely different from the definition of cost averaging. It cannot and should not be compared.

you may have an absolute return strategy mutual fund and at the same time implement cost averaging & value averaging so it's not actually an option that you can choose among the three. Thay can be done at the same time using only 1 fund.

maraming klase ng mutual fund or UITF fund na offer sa market, marami itong ibat ibang pangalan pero among the best funds eh yung fund managers na nag commit ng 'absolute return' sa mga investors kesa sa mga fund managers na nag commit lang sa mga 'benchmarks'.  mas mahirap kasi gawin at ma achieve ang absolute return.

 

[happzz]

I have read the thread above, tama lahat ang nabasa ko, the way i understand it, a mutual fund can employ absolute return strategy or benchmarking their returns for example sa psei, but sa alam ko, wala yatang mutual fund sa phils na gumagawa ng absolute return strategy coz as what i hve read in investopedia, a mutual fund employing this strategy involves  short selling,derivatives,options,futures,leverage,arbitrage and unconventional assets na sa pagkakaalam ko di pa ganun ka sophistacated ang stock market natin.  As an investor, tama si bauer na there is no comparison. Ang cost averaging applies to the investors strategy on how he will invest his/her money. Absolute return strategy is a strategy that a mutual fund can employ while cost averaging is a strategy for the investor who wish to invest in a mutual fund.

[xyphrus]

Hi po.. please enlighten me naman sa absolute return strategy sa MF, mas ok daw kasi yon kesa sa cost averaging eh.. kaso nagugugluhan ako.. pano. lahat ba ng investment cost pati interest kelangan i pull out? or yung interest lang? salamat sa lahat ng sasagot! )

I'm also curious about this absolute return stuff. I already heard this before as one of the strategies you can use in your MF, but im not really sure kung paano talaga ito ina-apply.

How/where did you learn about this kind of strategy, if you don't mind?

[kithe]

absolute return strategy is entirely different from the definition of cost averaging. It cannot and should not be compared.

you may have an absolute return strategy mutual fund and at the same time implement cost averaging & value averaging so it's not actually an option that you can choose among the three. Thay can be done at the same time using only 1 fund.

maraming klase ng mutual fund or UITF fund na offer sa market, marami itong ibat ibang pangalan pero among the best funds eh yung fund managers na nag commit ng 'absolute return' sa mga investors kesa sa mga fund managers na nag commit lang sa mga 'benchmarks'.  mas mahirap kasi gawin at ma achieve ang absolute return.

Yes may point po si sir bauer..

Sa pagcompute po ng absolute return, let say 5 year period investment,
You invest Php100,000 last July 12, 2007, NAVPS is Php1.00, zero load or back end load..
You have 100,000 shares.. After 5 years, July 12, 2012, the NaVPS is Php2.00..
100,000 shares multiply by 2.00 = Php 200,000.00
Your absolute return is, 100%... 200,000 - 100,000 = 100,000

With Peso cost averaging you are regularly set aside a fixed amount of money (optional) for investments, regardless of the NAVPS. This way, you automatically buy more shares when the price is low, and fewer shares when the price is high.

[wiggy]

Sa pagcompute po ng absolute return, let say 5 year period investment,
You invest Php100,000 last July 12, 2007, NAVPS is Php1.00, zero load or back end load..
You have 100,000 shares.. After 5 years, July 12, 2012, the NaVPS is Php2.00..
100,000 shares multiply by 2.00 = Php 200,000.00
Your absolute return is, 100%... 200,000 - 100,000 = 100,000

With Peso cost averaging you are regularly set aside a fixed amount of money (optional) for investments, regardless of the NAVPS. This way, you automatically buy more shares when the price is low, and fewer shares when the price is high.

Kithe or to anyone,

These are investing strategies used by fund managers to gain or secure profits right?

Are there really funds na pure absolute return agad ang usapan? Usually these funds have a minimum fund amount and lock-in period right?

Ex: Time Deposits (yes, these are not "funds" but as an example lang nung strategy), minimum amount requirement, may lock-in period, may specific fixed profit.

[kithe]

Actually, with stock market, mutual fund or uitf, even in business, wala talaga makakapagbigay ng future returns or guaranteed returns like yung sa mga banks like td's or rtb's..

The absolute return can be computed lang after you made the investment either on MoM, YTD or YOY basis..

[allanmm13]

These are investing strategies used by fund managers to gain or secure profits right?
Are there really funds na pure absolute return agad ang usapan? Usually these funds have a minimum fund amount and lock-in period right?

We have a different setup compared to foreign mutual funds. Kasi "securing profits", kelangan mo ng hedging like using insurance for the stock holdings (called put options) to lock in any profit.
Now, MFs and stocks in Phils, wala pa ata tayo pang hedge to secure the profits. So either i-pupullout yung investment sa stocks holdings and find a great stocks depende sa analysis nila.
Kaya siguro MFs here use the PSEi as benchmark.

Yung lock-in period is required dahil kung iinvest ng fund managers ang pera ng investor, hindi naman kikita kagad yun immediately. Ang assumption kasi sa equity market, the longer you keep it, the more "potential" returns you will have.

Ex: Time Deposits (yes, these are not "funds" but as an example lang nung strategy), minimum amount requirement, may lock-in period, may specific fixed profit.

TDs are considered lending type of investments. You lend your money to the banks at a fixed profit rate (let's say 4%). Ang kagandahan nito sa bank, they use your money ,same money you lend the bank, and they will lend to other people (let's say 12%). Kaya they earn on the spread (12%-4%). So, in theory, bank can provide you the specific profit they promise. Meron din sila risk kung magdefault ang pinautang nila, of course. 

That's why @kithe's view is correct about the stock market, mutual fund or uitf non-guranteed returns vs. of the bank's TD fixed profit.

[wiggy]

hi kithe and allanmm13 - thanks for the clarifications. yup we really cant guarantee lalo na sa stock market. i guess i forgot about hedging.

if the hedging failed, the bank will still be liable in securing profits to its investors?
or its just a safety net for your profits, but still guaranteed returns are not 100% assured? may disclaimer parin to investors?

[kithe]

Alam mo ba sa banks, na pwede ka din wala ineterest like sa regular savings.. So di rin guaranteed na kung mag deposit ka sa banks, may kikitain ang pera mo..
Kung di mo naman gagalawin, may dormant fee ka pa..

Unlike sa Mutual Fund, kahit 10k lang at 7  years pa yun na di mo galawin, tiyak na kikita.. This is base on my experience..

[wiggy]

Oh yes, I do believe in MF din.
Natanong ko lang yung hedging kasi naging issue samin yan dito.