[Times3]

Looking for a Phil company that has a good index fund, any suggestion out there ?

[vhinsent08]

Looking for a Phil company that has a good index fund, any suggestion out there ?

BPI INDEX

and Philequity Index and PNB meron din

[Times3]

BPI INDEX

and Philequity Index and PNB meron din

What do you think the fees are   I take type in on goggle and I will find them, correct

[alacrity]

Sir yung Phil. Stock Index Fund ng BPI, at yung sa Philequity pero hindi sila yung index fund na parang sa US, mahal pa fees nila.

[Times3]

Sir yung Phil. Stock Index Fund ng BPI, at yung sa Philequity pero hindi sila yung index fund na parang sa US, mahal pa fees nila.

English please this Pinoy cannot read Tagalog was not raised here

[mxherr5]

What he said was, the index funds aren't like index funds in the US,
they do not have low fees.

[personalfinanceapprentice]

BPI Index funds charge 1.5% annually. I invested in this also and so far, the results are ok.
more info here: http://www.alfmmutualfunds.com/alfm/cms/page/22

The fees are low compared to philequity and BPI's Odyssey funds. Not sure how it compares to other funds though.

[Sans]

Take a look at this analysis of BPI's Philippine Stock Index Fund and Philequity's PSE Index Fund: Edited to point to the correct link http://www.investorjuan.com/2012/12/philequity-and-bpis-stock-index-funds.html

I agree with Investor Juan's analysis that there is something fishy going on when an index fund DOES NOT follow the index closely.

[personalfinanceapprentice]

Juts read the post. Yeah, if it doesn't follow the index, it's not an index fund. They're either cooking the data or messing with the fund.

[mxherr5]

@Sans, you linked the wrong article btw.
For the other readers, its the most recent post in the blog.
The article linked was posted in 2006.

I'm not sure investor juan here knows what he's talking about.
the PSEi doesn't track dividends.
That's why BPI's index fund btw is almost 1:1 to the index, it uses
the dividends it earns to pay for the management fee and then keeps the
rest in a special fund to pay for future management fees.

If you look at the yearly returns between the PSEi and Philequity, the difference
can probably be explained by dividends(This is just speculation on my part)

But the bottomline is, investorjuan might be right but he definitely didn't explore
the possibility that the dividends is responsible for the "discrepancy"

[harimon21]

I read InvestorJuan's article. The correct link is here-->http://www.investorjuan.com/2012/12/philequity-and-bpis-stock-index-funds.html

And this is what is says in the PhilEquity Index Fund site:

For investors who are looking for an investment which mirrors the performance of the Philippine Stock Exchange Index (PSEi), Philequity PSE Index Fund (PPSE) is the perfect solution.  With PPSE, you don’t need to figure out the composition of the PSEi from day to day and use up large amounts of your money just to be able to buy the stocks which compose the index.  All you need to do is buy shares in the mutual fund.

What is striking is the very large divergence of NAVPS value starting from 2010. Mostly, the difference even exceeds a whopping 100%! Will the reassignment of dividends give that much difference in yield?   

[mxherr5]

I wouldn't think so..
I decided to check the fund's annual FS report and it shows over 10%
is in non listed equities and debt?

I guess its like PNB's index fund lol

[personalfinanceapprentice]

@Sans, you linked the wrong article btw.
For the other readers, its the most recent post in the blog.
The article linked was posted in 2006.

I'm not sure investor juan here knows what he's talking about.
the PSEi doesn't track dividends.
That's why BPI's index fund btw is almost 1:1 to the index, it uses
the dividends it earns to pay for the management fee and then keeps the
rest in a special fund to pay for future management fees.

If you look at the yearly returns between the PSEi and Philequity, the difference
can probably be explained by dividends(This is just speculation on my part)

But the bottomline is, investorjuan might be right but he definitely didn't explore
the possibility that the dividends is responsible for the "discrepancy"

I beg to disagree. Even if PhilEquity is tracking dividends, (but no other index fund is), there are several points to that:

1. They should say so, because the difference is a head-scratcher for people who know what they should be looking at and deceiving to people who don't know any better.

2. Dividend yields aren't that huge (at least not the dividends of the companies in the index). PLDT's cash dividends are one of the highest but it doesn't even come close to 20% or even 15% of the stock price.

3. If it was dividends, the difference should hypothetically be a small separation (the dividends are roughly 10% or so) not a large deviation. Plus, it should be consistent over the long term, happening or exaggerating when dividends are paid out. Not a sudden, sharp, and very pronounced trend of deviation.

4. The lines should still behave the same way after the deviation. it might be higher because dividends was counted, but the dips and rises in the price should be reflected similarly in the chart. But as you can see, PhilEquity's index fund rises when the PSEi lowers and there was even a very sharp dip when in fact the PSEi actually rose a bit.

[mxherr5]

@personalfinance,

Dude, I check reply 11.. I said it might
not be dividends

I was at the office when I first replied
so I couldn't really do "investigate" this.

And when harimon expressed his doubts about
the dividends making up the huge difference
between the 2 fund's performance, I had AGREED
that it might be something else.

I was only able to briefly glance thru the 2011
FS and couldn't see anything that would say
for sure what was causing the gap.


BUT I'm now at the comfort of my home and I
could dig deeper.

1.) I looked at the latest fact sheet of both
funds, namely Oct 2012.

2.) Both fact sheet says that the 3 year absolute
return of the PSEi is 86.5%

So PSEi is 86.5%
Philequity is at 91.8%
BPI is at 88.66%

And this is where BPI's fund fact sheet comes
in handy.
It actually also tracks the PSEi PLUS dividends

PSEi + Dividends is at 106.01%

Now look at those figures again.
With the dividends the total return ballooned to 106%
With Philequity at 91.8%, do you still think that the
dividend is not what's causing the gap???

And about the graph, did no one notice anything funky about it?
On year 2009, its at around 2.0 then on year 2010 it took a nosedive
to 2010 but when you look at the actual numbers, on 2009 PSEi whent up
by 69% and by 37% on 2010??

So to answer your question,

1.) maybe. I personally don't care.
An index fund to me invests just like the index.
There would always be tracking errors

2.) Well, you can check BPI's fund fact sheet again
Since 2003, the difference is at around 159%
So yes, it can!

4.) See my point about the graph

So yeah, I speculated correctly hahaha

[personalfinanceapprentice]

@mxherr5

Well, I guess you are right. My bad.