[alkansya]

sir fg, nailbiter maraming salamat, now it is becoming clearer;

so yung pera na ipinasok ko sa mf, iniinvest at kumikita, and this kita or income is reflected as an increase in the navps; my # of shares remain the same but my value per share increases.  

Now, dahil kumita, meaning dumami ang pera,o pool ng funds,  mas maraming perang i-re-reinvest ang fund managers; in effect, yung interes ng pera natin ay gagamitin ulit para kumita pa ulit ng interes!!! AYUN!!! AYUN NA ANG PRINCIPLE OF COMPOUNDING INTEREST; and with the fluctuations in navps, we the investors all hope its going to be a net positive increase over a period of time.


na kaka excite ito, parang gusto kong sumigaw ng EUREKA  

may i-ca-clarify lang ako, sir fg paki-comment na lang kung tama

Let's extend the example to Year 2. Assume that at the end of Year 2, the NAVPS of Mutual Fund A fell to P0.50. Let's review first:

1. How many shares again of Mutual Fund A do you have? 100,000 shares.

2. At what price did you buy these shares? P1.00 per share

3. How much is the total value of these shares at the end of Year 1? P200,000.

4. How much was the NAVPS of those shares at the end of Year 1? P2.00 per share.

5. At the end of Year 2, what are the only things you should be concerned about? #1 and #2.

At the end of Year 2, the total investment value (#3) and the NAVPS of Year 1 (#4) DON'T MATTER anymore. Don't forget that.

i think that last sentence is not 100% correct, hear me out.  

FOR COMPUTATION PURPOSES and for purposes of computing your net income/net gain/loss, tama yun, i agree  #3 and #4 dont matter.

PERO, i think (again correct me kung mali na naman pagka intindi ko) in the performance of the pooled funds, the yearly (or daily pa nga) fluctuations in navps affects the succeeding navps. para bang inter related ang one navps to another (although sabi din sa ibang discussions, previous performances does not guarantee good performance in the future; so ano nga ba talaga???)

parang dun sa example ni nailbiter where she showed na yung increases in navps afftects the NET change in navps over a period of time (pardon me if im using terms na mali)

kasi if we say that #3 and #4 dont matter, para bang sinabi nating ang importante lang talaga ang navps nung bumili ka at navps nung magredeem ka, all navps in between have no effect on the navps on redemption;

HINDI YATA AKO MAKAKAPAYAG NIYAN, kasi pag totoo yan, patay! nagulo na naman lahat ng akala ko naintindihan ko na with regards to my walang kamatayang concern : compounding interest. paradigm shift na naman ako!

teka, teka, tulong ulit!!!! habang nagta type ako, napapahinto ako at napapaisip, nalito na naman ako! kakasabi ko lang sa start clearer na eh.

tama nga ba?  each navps is independent of each other?  or eventually they will affect each other kasi when you compute for your income you are getting the NET of the different fluctuations?

saklolo!!!!!!!!

[nailbiter]

@alkansya, when factoring in compounding interest, then the figures in between would matter to calculations. What FutureGizmo is trying to say is that when you want to figure out your fund value and your total gain/loss on any given date, you need only refer to the current NAVPS and the initial NAVPS when you bought your shares. It's really up to you whether you want to break down the computations for the compounding interest on your fund value. May ready reference na naman ng performance ng mutual funds sa diyaryo at sa internet so you can easily monitor the figures without having to do the math yourself.

[suffice]

Yes, MFs earn compounding interest. If you had P100K invested, let's assume you entered a fund that consistently performs at 20% annually.

End of year 1: P100,000 * 120% = P120,000
End of year 2: P120,000 * 120% = P144,000
End of year 3: P144,000 * 120% = P172,800
End of year 4: P172,800 * 120% = P207,360
End of year 5: P207,360 * 120% = P248,832

How to liquidate:

Take note that mutual funds are subject to sales load and redemption fees. But most funds, waived na ang exit fee if you redeem after 5 years.

Nailbiter ....is this already NET of taxes  and   etc....thnx

[nailbiter]

The post you quoted, suffice, was merely an illustration of compounding interest, as a response to fireburncircuit's query. Kaya sinulat ko rin diyan na you would still have to consider sales load and redemption fees. Check mo yung "Philippine Mutual Funds List Project" thread para sa entry and exit fee figures. Most funds naman, after two years, waived na ang exit fee.

Capital gains from the redemption of shares are tax-exempt. The fund is already taxed on the gains for the securities in its portfolio, so wala nang tax sa MF investors kasi double taxation na kung ganon. If there are dividends, though, those will be subject to 10% final withholding tax, pero automatic nang ibabawas yon ng company once they're paid out.

[2pac]

NAVPS?

net assset per share usually flactuate Im currently eyeing sunlife and first metro navs and comparing them

so I gathered this info.

Sunlife NAVPS

NAVPS in PESOS
as of 02/23/07
Bond Fund   1.8899
Balanced Fund   2.1014
Philippine Equity Fund   2.0135
Money Market Fund   1.1004
GS Fund   1.1250


NAVPS in PESOS
as of 02/26/07
Bond Fund   1.8906
Balanced Fund   2.0977
Philippine Equity Fund   2.0088
Money Market Fund   1.1005
GS Fund   1.1251

NAVPS in PESOS
as of 02/27/07

Bond Fund   1.8913
Balanced Fund   2.0845
Philippine Equity Fund   1.9911
Money Market Fund   1.1006
GS Fund   1.1253

NAVPS in PESOS
as of 02/28/07
Bond Fund   1.8881
Balanced Fund   1.9879
Philippine Equity Fund   1.8795
Money Market Fund   1.1006
GS Fund   1.1236

NAVPS in PESOS
as of 03/01/07
Bond Fund   1.8912
Balanced Fund   2.0360
Philippine Equity Fund   1.9327
Money Market Fund   1.1007
GS Fund   1.1247


FAMI

equity
Net Asset Value Per Share (NAVPS)
as of February 28, 2007 = 2.0945
balance
Net Asset Value Per Share (NAVPS)
as of February 28, 2007 =1.1934

equity
Net Asset Value Per Share (NAVPS)
as of March 01, 2007 = 2.1567
balance
Net Asset Value Per Share (NAVPS)
as of March 01, 2007 =1.1906



I just have the ff. questions in mind

1. so you cannot predict or know the NAVPS for the current day right? because for what i have observe they (sunlife/fami) always post delayed infromation of nav at their website.

2. I'm a first time investor to be on Mutual fund. I encountered this quote "Buy low sell high" is it ok to wait for the right time like for the shares to go down? (follow my instict that shares will go down if current nav is available for the current date)

3. how will I know if I'm gaining or I'm losing money? is there a formula for it? I browse the sun life website  

NAVPS = Total Value of Fund Assets - Fund Liabilities / Number of shares outstanding ( is this for the company use only to deteremine NAVPS?

if ever i invested 100K in balance fund  using the data of 2/23 (2.1014) @ 2/26 (2.0977) I loss? and @ 2/27 I gain (2.0845)?

if ever after 6 months (october) and the Nav went up like 1.0005 did i lose big time if i'm going to redeem? what about if the nav went up like 3.2345 did i made a profit? and how do you compute the actual cash redemption?


4. let say i decide to put 5K every month will this affect my shares? I have read that your going to average your nav? what if in that particular month the nav was sky high will i still go and invest my money?

is the computation like this?

months   nav

mar    2.5321
apr    2.5978
may    3.9871
june   1.9845
jul    2.0157
aug    1.8888

so average nav is 2.501?


5. As they say diversify if you have 100K on hand is it an ideal to invest 50% @ sunlife and 25% percent @ fami 25% others?


Thanks

[nailbiter]

@2pac

1) Like it was mentioned in the previous posts, you would not know the price you're buying into a fund on the day you enter, or the price you'd be selling your shares on the day you exit. But once you are given the number of shares you're subscribed for, just monitor the daily NAVPS as it's released to determine the value of your shares.

2) This concern has been discussed extensively in this thread.

3) Yes, that is the formula the fund managers use to determine the NAVPS. What you need to get your current fund value would be the number of shares you bought and the present NAVPS. Multiply your number of shares with the current NAVPS and if the product is worth more than your initial investment, then you're gaining.

Btw, walang balanced fund ang FAMI, ha. They have an equity and a fixed income/bond fund.

If you want to look at six months, let's draw the figures. Yung bond at equity na lang muna i-compare natin:

9/1/2006

Sun Life Prosperity Phil. Equity Fund, Inc.  1.4645  
Sun Life Prosperity Bond Fund, Inc.  1.7795
First Metro Save and Learn Equity Fund  1.4776
First Metro Save and Learn Fixed Income Fund  1.1182  

3/1/2007

Sun Life Prosperity Phil. Equity Fund, Inc.  1.9327
Sun Life Prosperity Bond Fund, Inc.  1.8912  
First Metro Save and Learn Equity Fund  2.1567  
First Metro Save and Learn Fixed Income Fund  1.1906  

Just to illustrate, let's say you placed P25,000.00 in each of these funds on 9/1/2006. Sunlife gives you two sales load options for this investment amount, let's choose the front-end load option. Entry fee for each of these funds would then be 2% (P500.00) plus 12% VAT (P60.00). So the net investment amount is P24,440.00. You divide this amount by the NAVPS on 9/1/2006 to get your number of shares.

Sun Life Prosperity Phil. Equity Fund, Inc.  -  24,440/1.4645 = 16,668 shares
Sun Life Prosperity Bond Fund, Inc.  -  24,440/1.7795 = 13,734 shares
First Metro Save and Learn Equity Fund  -  24,440/1.4776 = 16,540 shares
First Metro Save and Learn Fixed Income Fund  -  24,440/1.1182 = 21,857 shares

On 3/1/2007, the value of your shares would be:

Sun Life Prosperity Phil. Equity Fund, Inc.  -  1.9327*16,668 = P32,214.24
Sun Life Prosperity Bond Fund, Inc.  -  1.8912*13,734 = P25,973.74
First Metro Save and Learn Equity Fund  -  2.1567*16,540 = P35,671.82
First Metro Save and Learn Fixed Income Fund  -  1.1906*21,857 = P26,022.94

If you chose to redeem your shares for all four funds last 3/1, you would no longer be charged an exit fee by Sunlife since you opted for a front-end load. So you would have received the amounts quoted above. For FAMI, redemption fee for investments redeemed in less than a year is 2%, with 12% VAT.

First Metro Save and Learn Equity Fund  -  P35,671.82 - (P713.44 + P85.61) = P34,872.77
First Metro Save and Learn Fixed Income Fund  -  P26,022.94 - (P520.46 + P62.46) = P25,440.02

4) You don't have to average your NAV. Cost averaging is a prescribed investment method if you intend to make regular investments for the long-term. This is one way to average your total cost in case you enter the market at the wrong time. Kung nakapasok ka na mataas ang NAV, pag maglagay ka ulit nang mababa na ang NAV, nahihila na non yung nagastos mo, kumbaga. In effect, the price at which you owned those shares would be the average of the cost of all your entries.

5) It's not just a matter of spreading your investments among investment companies. There are different fund types, different markets. Ultimately, the ideal allocation for each diversified instrument would really depend on the individual.

[2pac]

WOW!   Thanks po nailbiter

by the way @ 9/1/2006 is that the actual figures? my friend invest in the middle of 2006 and he got 1.5 per share so that explains it...

[nailbiter]

Linawin ko lang ha, that's September 1, 2006 and March 1, 2007. Figures came from the ICAP site: www.icap.com.ph

[2pac]

got it thanks

[2pac]

Question again :shoked:


compunding ba yung mutual fund? like sa time deposit...

let say

2004 19.1%
2005 10.0%
2006 34.3%

3-year return 75.9%

This is the actual figure sa sunlife
leaflet that i got

so for example if 25,000 less front end net is P24,440.00 = 16,668 shares ( i used the above example ni nailbiter)

so 24,440 x .191 = 4668.04 yung profit?

but the 16,668 share di sya mag increase right? ( sinabi kasi sakin na your share will reduce only if you redeem and it will stay the same if you gain? is this right?)


then after that eh mag compound ba sya na magiging 24,440+4668.04=29,108.04?

then eh 29,108.04x.10 = 2910.8 yung profit


medyo confuse ako sa computation and dun sa di pag increase ng share since nag karoon ka ng profit?


OMG! i just place my investment @ equity   .....oh well this is going to be a roller coaster ride then .....  

[nailbiter]

2pac, yes compounding ang mutual funds. (Refer to this post for an illustration.) Pero ang paraan talaga ng pag-compute ng value ng shares e yung pag-multiply ng number of shares sa current NAVPS, hindi sa computed percentage ng returns. Hindi yung number ng shares ang nag-i-increase kundi ang value ng shares.

Queries regarding the proper time to invest and comments on current market conditions moved to this thread.

[Jayzone]

nail pwede po ba magtanong...if let jst say for 3 yrs negative ang mga nav does it mean ung pera na inivest mo e nawala dahil negative na nga at wala ng value but the shares are still there magkakapera ka lang ulit pag nagpositve ung nav? ganun po ba ang logic nun?since young shares e nandun lang ang nagbabago lang e ung value?thank you po
Posted on: Jul 05, 2007, 05:58 PMhi anonymous...pwede po ba magtanong ulit ang ibig sabihin po b ng nag negative ang nav is that your investment which is your shares eh wala ng value..meaning nawala na ung pera but the shares is still there? ganun po ba un..so kung negative for 4 yrs ang nav ibig sabihin nawala na ang pera mo?magkakamoney ka lang ulit kung nagpositive ung nav ganun po ba kasi ung shares are still there?thanks po    

[nailbiter]

nail pwede po ba magtanong...if let jst say for 3 yrs negative ang mga nav does it mean ung pera na inivest mo e nawala dahil negative na nga at wala ng value but the shares are still there magkakapera ka lang ulit pag nagpositve ung nav? ganun po ba ang logic nun?since young shares e nandun lang ang nagbabago lang e ung value?

Wala pa akong nae-encounter na negative na NAV. Merong negative na performance, meaning nalugi from one point to another. Pero pag sabihin mong negative ang value ng shares mo, mahirap ata yon, parang may utang ka pa sa company kung ganon.

Ganito. Halimbawa naglagay ka sa MFCP Kabuhayan Fund noong 7/5/1999 ng P50,000.

MFCP Kabuhayan Fund

Date	| NAVPS |	YOY Performance
7/5/1999	| 0.9075 |	38.69%
7/5/2000	| 0.6157 |	-32.15%
7/5/2001	| 0.6401 |	3.96%
7/5/2002	| 0.5403 |	-15.59%
7/4/2003	| 0.6053 |	12.03%
7/5/2004	| 0.7027 |	16.09%
7/5/2005	| 0.7723 |	9.90%
7/5/2006	| 0.9588 |	24.14%
7/5/2007	| 1.4158 |	47.66%

Source: www.icap.com.ph

May entry fee ang Kabuhayan Fund na 2%. (Actually 2.24% pag kasama ang VAT, pero wala pang VAT sa sales load ng MFs noong 1999.)

P50,000 * 2% = P1,000
P50,000 - P1,000 = P49,000

Menos ang entry fee, P49,000 worth ng shares noong 7/5/1999 ang mabibili mo.

P49,000 / 0.9075 = 53,994 shares

Para malaman mo kung magkano ang HALAGA ng shares mo, imu-multiply mo sa pinakabagong NAVPS. Sa table sa taas nakalagay yung NAVPS ng Kabuhayan Fund for the given dates. Ibig sabihin niyan:

Noong 7/5/2000, ang halaga ng shares mo:

53,994 * 0.6157 = P33,244.10

Bumaba ang presyo ng NAV from 0.9075 to 0.6157 so negative ang performance mula 7/5/1999 hanggang 7/5/2000. Pero hindi naman negative ang halaga ng shares mo. Kung ni-redeem mo ang shares mo noong 7/5/2000, nalugi ka lang pero hindi ka naubos. Kung hindi mo naman ire-redeem, pwede mong hintaying umakyat ang NAV hanggang sa kumita na ang shares mo.

Isa-isahin natin yung magiging fund value kada taon batay sa NAVPS sa table sa itaas:

7/5/1999	53,994 * 0.9075	= P49,000.00
7/5/2000	53,994 * 0.6157	= P33,244.10
7/5/2001	53,994 * 0.6401	= P34,561.55
7/5/2002	53,994 * 0.5403	= P29,172.95
7/4/2003	53,994 * 0.6053	= P32,682.53
7/5/2004	53,994 * 0.7027	= P37,941.58
7/5/2005	53,994 * 0.7723	= P41,699.56
7/5/2006	53,994 * 0.9588	= P51,769.44
7/5/2007	53,994 * 1.4158	= P76,444.70

Sa example na 'to, umabot ng pitong taon bago umakyat yung NAV above your purchase price. Sa loob ng nakaraang walong taon, pumapatak na nasa 5.71% lang ang taunang kita ng Kabuhayan (di pa naka-compute ang sales load diyan). Dito pumapasok ang sinasabi ni the.oracle na i-reassess ang fund mo every year. Kung sa tingin mo mas kikita ang pera mo sa ibang fund o sa ibang investment, i-redeem mo na. Kung confident ka na aakyat din sa level na gusto mo, iwan mo. Araw-araw nagbabago ang NAVPS kaya araw-araw din nagbabago ang halaga ng shares.

[Jayzone]

ay thank you po its a big help po naintindihan ko lalo hehe its a matter of pakiramdaman pala but ofcourse titingnan din ung trend or takbo...by the way napanuod nyo po ba ung kerygmafamily ni bro bo about dun sa mutual fund kung pano naging 50,000,000 ung pera na inivest nung tao after 30 plus years ? one time investment lang po ba un or several investments din...sa pagkakaintindi ko po 7 yrs yta naginvest ung tao then naiwanan na nya ung pera dun then after 30 yrs saka lang nya naisipan itanong...nagulat sya at naging 50 milyon nga ung pera na ininvest nya because of mutual fund? is it
realy possible?

[the.oracle]

That is possible kasi compounded nga ang mutual funds pero siyempre depende rin sa fund manager ng MF kung magaling sila mag handle ng portfolio nila. But then again kailangan mo talaga intindihin yung MF na paglalagyan mo ng pera at yung market conditions at that particular time.  Wag ka lang aasa sa mga sinasabi ng mga tao kailangan din mag research kung saan ng fund manager iniinvest yung mga pera nila.  For example nag lagay ka sa Phil Equity ngayon tapos after a couple years nakita mong di na maganda galaw ng stock market, dapat ilipat mo muna pera mo sa balanced or bond funds para mas maganda ang yield na makukuha mo.  Malay mo yung taong nag iwan ng pera sa MF ng 30 years e mas malaki pa pala sa P 50 Million yung kinita niya kung tinitignan din niya ang galaw ng market conditions ng MF investment niya.  For all you know he or she would've earned P 100 MIllion.