Advice to investors: Amid volatility, pick mutual funds

Valerie Pama, president of Sun Life Asset Management Co., Inc., says the Philippine stock market and the economy remain strong. The market is seen to stabilize after the May elections. (CDN PHOTO/VANESSA LUCERO)

The Philippine stock market is expected to remain volatile this year, but may stabilize after the May 9 elections, a financial services company executive said.

Investors are encouraged to continue putting their money in the market, but may do well to transfer their investments to more conservative mutual funds rather than high-risk, high-return funds.

Valerie Pama, president of Sun Life Asset Management Co., Inc. (SLAMCI), said the Philippine stock market remains “one of the strongest in the world.”

“I would encourage people to invest,” she said in a press conference here.

“There’s a lot of liquidity in the market. We have a lot of investors hungry to invest, but of course we have to guide them through this time of volatility, which is why we have different kinds of funds,” she added.

Of the eight types of mutual funds offered by SLAMCI, the fund with the highest return is the peso-denomination equity fund, with over 20 percent returns on rolling basis over five years. This fund type, however, is labelled as the most risky.

Other offerings are bond, balanced, government securities, money market, dollar advantage, and dollar abundance funds.

Pama said the downtrend in the stock market is primarily caused by external head winds such as the oil price crash, China’s economic slowdown and the United

States’ slow economic recovery and upcoming elections.

“The economy is bright. It’s just that right now there’s a lot of disturbances and disruption from offshore markets that sort of affect and impact our market,” she added.

Pama said investors should just monitor how these external factors pan out.

Earlier this year, the Bangko Sentral ng Pilipinas said it will not be changing monetary policies  due to the country’s strong economic growth and fundamentals.

The Monetary Board (MB) is set to meet on February 11 for the first policy review this year. The board, however, is inclined to maintain the current monetary policies.

“The right time to invest is yesterday. The best time to start investing is as soon as you can. Allocate a portion of your funds into investments,” Pama said.

The Philippine Stock Exchange index (PSEi) continued to decline Tuesday, ending at 6,637.43 or 1.89 percent lower than the February 5 finish of 6,765.13.
Except for the mining and oil counter, all counters ended in the red yesterday.