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US mutual funds vs. Philippine mutual funds?

perapera · 63 · 11215

perapera

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Admin's Note: Split from the thread Compounding interest in MFs and UITFs



I have a feeling that Philippine stock market/small or medium business is not sustainable (referring to long term like 5-10 years from now), we will crash. Financial world order is happening, however we have the worst system(mga gahaman na negosyante at bobong politiko) we will never have the chance.  We will just wake up someday that Philippine companies are owned by foreigners. Big corporations that will kill small business.. So don't be surprise when no one is renting your condo business because there will be a cheaper and better condos own by big corporation in your area, don't be surprise when jollibee will be acquired by mcdo, or san miguel corp will be acquired by Kraft foods.

Thanks pinoy_abroad!

This is what I'm talking about in the other topic...

Pls convince us why should we invest in MF.

In MF,

100% of our money is invested
100% risk
up to 20% only for the benefits
80% goes to taxes and fees
« Last Edit: Jul 06, 2011, 09:47 AM by FutureGizmo »


pinoy_abroad

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Reply #1 on: Jul 05, 2011, 10:29 AM
Thanks pinoy_abroad!

This is what I'm talking about in the other topic...

Pls convince us why should we invest in MF.

In MF,

100% of our money is invested
100% risk
up to 20% only for the benefits
80% goes to taxes and fees

U.S. Mutual funds has a dividends average of 2.5-3%...Philippine MF is 0% dividends
U.S. Mutual funds has a lot of no load fee---Philippines MF is as high as 5%
U.S Mutual funds expenses ratio, can be as low as 0.10%--
U. S. Mutual funds  has no tax if placed on IRA or 401K---Philippines MF, win or loss you have to pay tax

Existing MF in Philippines are NOT SUSTAINABLE with there current system, more like a ponzi scheme you will wake up someday only to find out that your money is gone.. Better buy stocks that you understand, don't think of a quick rich strategy. Invest in TD, then if you came up with a reasonable amount to invest in stocks then go for it...

Philippine MF can not compete and will never win against big U.S. MF companies.. When its time for this big investment companies to take there profit in Philippine stock market, say goodbye to your hard earned money.

« Last Edit: Jul 05, 2011, 10:34 AM by pinoy_abroad »


perapera

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Reply #2 on: Jul 05, 2011, 11:54 AM
Thanks for clarification..

In my point of view, is it better to invest directly to blue chips instead of MF?

The return would be significant, right?


pinoy_abroad

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Reply #3 on: Jul 05, 2011, 12:51 PM
Thanks for clarification..

In my point of view, is it better to invest directly to blue chips instead of MF?

The return would be significant, right?

That's true, investing directly will be the best..Just choose a trustworthy company.. Whether we like it or not we have to play stocks because this will be the next standard in considering if a person is rich or not..


GoodSteward

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Reply #4 on: Jul 05, 2011, 01:17 PM
That's true, investing directly will be the best..Just choose a trustworthy company.. Whether we like it or not we have to play stocks because this will be the next standard in considering if a person is rich or not..

Im confused, sorry , pinoy abroad, but i thought you said from the other thread that philippine stock market in general is speculative. But now you are saying investing directly in it would be the best. So you mean to say it is still ok to invest in philippine stock market even if it is speculative based on your opinion?


pinoy_abroad

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Reply #5 on: Jul 05, 2011, 01:36 PM
Im confused, sorry , pinoy abroad, but i thought you said from the other thread that philippine stock market in general is speculative. But now you are saying investing directly in it would be the best. So you mean to say it is still ok to invest in philippine stock market even if it is speculative based on your opinion?

We are talking about blue chips stocks here, not the MF... blue chips that could pay dividend.. Just like what I have said in the other topic there are undervalued stocks that you would hold even on the downside
« Last Edit: Jul 05, 2011, 01:38 PM by pinoy_abroad »


perapera

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Reply #6 on: Jul 05, 2011, 01:38 PM
In my opinion, I would rather invest directly to Jollibee, SM, Ayala, and other blue chips...

And instead of UITF, invest directly to BDO, BPI, etc..

I think this is more profitable!
You have total control of your investments too.
You can buy and sell anytime.


allanmm13

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Reply #7 on: Jul 05, 2011, 02:31 PM
Thanks pinoy_abroad!

This is what I'm talking about in the other topic...

Pls convince us why should we invest in MF.

In MF,

100% of our money is invested
100% risk
up to 20% only for the benefits
80% goes to taxes and fees

Teka nalilito ako... kung pareho ba kayo ng point of view ni perapera and pinoy_abroad.

Si perapera ayaw nya sa MF, either US or Philippines
Si pinoy_abroad ayaw nya sa MF sa Pinas but he prefers US MF.

But both of you will be okay to invest sa direct stocks sa Pinas. Tama ba?
In my opinion, I would rather invest directly to Jollibee, SM, Ayala, and other blue chips...

And instead of UITF, invest directly to BDO, BPI, etc..

I think this is more profitable!
You have total control of your investments too.
You can buy and sell anytime.
That's true, investing directly will be the best..Just choose a trustworthy company.. Whether we like it or not we have to play stocks because this will be the next standard in considering if a person is rich or not..

Philippine MF can not compete and will never win against big U.S. MF companies.. When its time for this big investment companies to take there profit in Philippine stock market, say goodbye to your hard earned money.
I have a feeling that Philippine stock market/small or medium business is not sustainable (referring to long term like 5-10 years from now), we will crash. Financial world order is happening, however we have the worst system(mga gahaman na negosyante at bobong politiko) we will never have the chance.  We will just wake up someday that Philippine companies are owned by foreigners. Big corporations that will kill small business.. So don't be surprise when no one is renting your condo business because there will be a cheaper and better condos own by big corporation in your area, don't be surprise when jollibee will be acquired by mcdo, or san miguel corp will be acquired by Kraft foods.
Taken for example na nakainvest ka directly sa companies sa Phil Stock market. Eh di ba sa above scenario both you and MF like FAMI/Philam/Philequity are participants in same market. So both will loose money if big investors pull out their money sa Pinas. Sa tingin ko naman sa blue chip din sila nag-iinvest tulad nyo, right? I'm sure kasi portfolio ng FAMI equity ko are in blue chips as per last fund sheet sent by my financial advisor.

Well technically, you (as retail investor) will loose more kasi nakadiversifed ang investments ng MF (institutional investors) sa maraming companies in the stock market compared to your small funds na ilang stocks lang mabibili.

So can you further enlighten us kung ano ba talaga gusto nyo? US MF or Phil Stocks?

Tsaka, common sense investing lang. Me umalis mang institutional investors like big investment companies, the MF themselves sa pinas will still be there dahil local investors ang kanilang clients.

And ayaw man nating isipin, institutional investors like MFs and other big investors are the "market movers" , its not the retail investors. Kung gusto nila magprofit on their investments, they can probably do that, because they can shift the market sentiments.

« Last Edit: Jul 05, 2011, 06:13 PM by allanmm13 »


pinoy_abroad

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Reply #8 on: Jul 05, 2011, 02:59 PM
Most of the blue chips they have in Phil stocks pay dividend ( Phil MF does not pay you).. Even there will be a downside on Phil stocks if you are invested in companies/blue chips that pay dividends, you can still keep it and they will most probably keep paying dividends..

Example

If your Nav in 2011 is 4 per share, then  on 2013 your Nav goes down to 2 per share... You will get nothing but just keep on paying the expenses ratio or load fee, etc etc..

If you invest in JFC or Meralco that pay 3% div yearly or CEU that pay 8%++, so example per share cost 50 pesos.. so you get 1.5 pesos per year in every share invested. If big investors pull out and take profits... for sure the value of share go down like 40 pesos but in relation to dividend it should go up.. so if they still pay 1.5 pesos per share every year your dividend will now be 3.75%...

It is not really worth it to invest in Phil MF in the long term because of there fees, tax and lack of dividends..

U.S. MF is different with low expenses, tax break and dividend.. Phil MF and Phil individual stocks? I will go with value/blue chips Phil stocks..

Yun common sense and nakakatakot, umakyat ng bigla ang PSE for the last 2 years... don't tell me kagagawan ito ng mga Filipino investors?
« Last Edit: Jul 05, 2011, 03:08 PM by pinoy_abroad »


allanmm13

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Reply #9 on: Jul 05, 2011, 03:14 PM
Most of the blue chips they have in Phil stocks pay dividend ( Phil MF does not pay you).. Even there will be a downside on Phil stocks if you are invested in companies/blue chips that pay dividends, you can still keep it and they will most probably keep paying dividends..

Example

If your Nav in 2011 is 4 per share, then  on 2013 your Nav goes down to 2 per share... You will get nothing but just keep on paying the expenses ratio or load fee, etc etc..

If you invest in JFC or Meralco that pay 3% div yearly or CEU that pay 8%++, so example per share cost 50 pesos.. so you get 1.5 pesos per year in every share invested. If big investors pull out and take profits... for sure the value of share go down like 40 pesos but in relation to dividend it should go up.. so if they still pay 1.5 pesos per share every year your dividend will now be 3.75%...

It is not really worth it to invest in Phil MF in the long term because of there fees, tax and lack of dividends..

U.S. MF is different with low expenses, tax break and dividend.. Phil MF and Phil individual stocks? I will go with value/blue chips Phil stocks..


You better read the prospectus of the MFs like FAMI, they have clause about dividends of the fund. The companies of the fund itself have dividends dahil its part of the Stock market mechanism.  Kung sino ang shareholder, you will receive dividend if the companies you are holding will declare it.

Well, ang ginagawa ng MF is they do the DRIP mechanism. Automatic reinvestments ang ginagamit nila. So they are not keeping the dividend to themselves but it was bought with new shares again. Instead na ibigay sa investor ang dividend eh sila na ang automatic na mag iinvest base on the objective of the fund.


Kasi, in the first place, ano ba gagawin mo pag nareceive mo dividend? Pull it out sa broker account or reinvest mo uli? If you pull it out, edi di mo nagamit ang compunding effect ng dividend reinvesting. Kung rereinvestmet mo uli, you have to do it manually by buying shares. tama ba? So sa MF they do it automatically for investors, again depending on the objective of the fund.


Kaya nga nag babago ang NAV ng isang MF depende sa maraming factor. Kasama na dyan ang dividend.

Actually, the best time for dividend is when it was declared during economic crisis instead of during economic prosperity.
Those local investors who are there will benefit more due to dividend reinvesting while foreign investors are moving out of Phil Market .


The good thing about MFs is they hold many shares, probably in thousands or millions of shares. Once me declared na dividends, kung piso piso lang sa retail investors, sa MFs probably in hundred thousands figures or million pesos ang nakukuha nilang income from dividend alone. As retail investor, you will be limited in shares you can buy while MFs income from dividend will be SUBSTANTIAL to buy big bulk of shares.

Well regarding sa expenses, its a norm sa financial industry. Even if you buy/sell your stocks, you are still paying your broker. right?
Now sa MF, its an investment house so technically shareholders/investors should shoulder the expenses. Thats why you have this various expenses ng isang fund. Eh kung di sila mag charcharge ng fees, would you think great fund managers will join them?
« Last Edit: Jul 05, 2011, 06:58 PM by allanmm13 »


pinoy_abroad

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Reply #10 on: Jul 05, 2011, 03:18 PM
For transparency, gusto kung makita at gusto kung magkaroon ng option to reinvest in same fund or different fund..

Post Merge: Jul 05, 2011, 03:24 PM
The truth is its too costly to have a Phil MF with a lot of risk to take, in the long term its not gonna work for small investors..

U.S. MF was designed for small/middle/working class investor through their retirement account or taxable account..
Phil MF was designed for fund companies/fund manager to always win and collect there profit via the investors..not for long term investment.

But I respect your belief if you think its worth to invest in Phil MF
« Last Edit: Jul 05, 2011, 03:31 PM by pinoy_abroad »


allanmm13

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Reply #11 on: Jul 05, 2011, 04:24 PM
Probably you are relating your comparison of US and Phil MF in terms of cost of operations.
But that's not the only think you need to look at.

in US, 8000 MFs are competing for each other for a total of 4000 US stocks only.
They do have economy of scales that's why some funds have lower fees to stay attractive. But it doesnt mean they are ALL profitable.
Many MFs there are underperforming the US S&P500 index. So good luck if you will find the best performer that you can cling in the long term.

US, on a bigger picture, is today's biggest debtor nation in the history of the world. So can you imagine were will those US citizens will be in the long term if US will start defaulting. This was an observance of Jim Rogers, well know commodity investor in US.


Ika nga, no matter how great your navy personnel (8000 MFs) if the entire ship is sinking (US econmy), you better prepare for the worst...  

« Last Edit: Jul 05, 2011, 05:56 PM by allanmm13 »


richpulubi

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Reply #12 on: Jul 05, 2011, 05:01 PM
So, what about all those Americans who lost half the value of their portfolios in stocks and US equities in 2008?


GoodSteward

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Reply #13 on: Jul 05, 2011, 07:11 PM
@pinoyabroad, based on the progression of your posts:
"Ayaw ko ng mutual fund sa Pinas, speculative kasi". Then...
"I mean yun Philippine stock market ang speculative". Then....
"Pero ok lang maginvest kayo sa blue chip stocks sa Philippine stock market".


pinoy_abroad

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Reply #14 on: Jul 06, 2011, 06:33 AM
So, what about all those Americans who lost half the value of their portfolios in stocks and US equities in 2008?

It now back to its pre-recession value if not even more than that... I am a Filipino but sad to say, U. S has a better system just like what I have said there is not way you can bet  and win against U.S. economy...

Post Merge: Jul 06, 2011, 06:35 AM
@pinoyabroad, based on the progression of your posts:
"Ayaw ko ng mutual fund sa Pinas, speculative kasi". Then...
"I mean yun Philippine stock market ang speculative". Then....
"Pero ok lang maginvest kayo sa blue chip stocks sa Philippine stock market".


The Phil MF(referring to equity) will mimic the Phil stock Market, right?  I just feel safer investing only on selected stocks/blue chips and not the whole Phil stock market using the Phil MF equity... The Phil market has been up for the last 2 years, this are not Filipino investors money..This inflows came from foreign investors which would pull the market to downside if they started taking there profits..

Do you really believe that 60% or more of Philippine stock market value are owned by Filipinos? If you do then, good luck!!!

Phil stock market cap-- $200B
U.S. -- $14+Trillion
Global -- $40+ Trillion

We are peanuts compared to them..Just a reality check on where we are for us to see the overall picture, I am not trying to convince you to be pessimistic on Phil MF.
« Last Edit: Jul 06, 2011, 07:36 AM by pinoy_abroad »


 


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