Comparing fund performances

Investors are usually faced with the problem on which fund to invest their hard-earned money in. This tutorial gives a brief guide on how to compare the performances of similar funds, and by doing so, enabling the investor to prune out funds that are lackluster in performance, and choose funds that are actually doing what they are supposed to do: earn money.

To compare mutual fund or unit investment trust fund (UITF) performances, first obtain a list of all funds, for a specific geographical region. For example, for the Philippines, you may type in the following keywords in your favorite search engine such as Google: "bloomberg funds Philippines"

The search engine may then lead you to the following site which lists all the funds, whether mutual funds or UITFs, in the Philippines: http://www.bloomberg.com/markets/funds/country/philippines/

Next, right-click on a specific fund which you may be interested in, and open it in a different tab. For example, to investigate the BDO Peso Bond Fund:

The Bloomberg page for the BDO Peso Bond Fund will appear:

Once the page appears, click on “Mutual Fund Chart for BDOPBF” link, and the interactive chart will appear:

Return to the list of funds page (http://www.bloomberg.com/markets/funds/country/philippines/) and pick another fund which you want to compare the BDO Peso Bond Fund with, and take note of the Bloomberg symbol. For instance, to compare the BDO Peso Bond Fund against the Union Bank Peso Bond Fund, you would note that the symbol for the Union Bank Peso Bond Fund is IFDPPBP:PM

Go back to the page displaying the interactive chart for the BDO Peso Bond Fund, and add the symbol IFDPPBP:PM

Notice that Union Bank Peso Bond Fund chart (green) has been superimposed upon the BDO Peso Bond Fund chart (orange):

You can display up to 4 funds. For instance to compare the BDO and Union Bank Peso Bond funds against the First Metro Save & Learn Fixed Income Fund:

It is obvious that for the past 6 months, the First Metro Save & Learn Fixed Income Fund has easily outclassed the BDO and Union Bank Peso Bond Funds. However, this has not always been the case. For instance, you may click on the 3-year horizon to view the past performance for the past 3 years:

Doing so, one will notice that it is only recently that the First Metro Save & Learn Fixed Income Fund has gained momentum. For the majority of the past three years, it was actually the Union Bank Peso Bond Fund that was dominating. The BDO Peso Bond Fund pales in comparison to the other 2 funds:

If we shift to a 5-year horizon, it is evident that the Union Bank Peso Bond Fund is the leader of the pack.

Unfortunately, Bloomberg only allows chart interactions for the time-horizons of 6 months, 1 year, 3 years, and 5 years. Nonetheless, it permits us to obtain information for the recent performances of a very large diversity of funds. By doing so, it helps us make wiser and more informed decisions.

In making comparisons, it is best to compare funds that all fall under the same category. For example, in this case, we compared the BDO Peso Bond Fund against the Union Bank Peso Bond Fund and against the First Metro Save & Learn Fixed Income Fund. All 3 funds are similar in that they are bond funds, and mostly invested in government treasury bonds. It would not make sense to compare a bond fund against an equity fund, since these 2 funds are invested in very different securities.

Sun Life Financial (Philippines)

Let’s talk about Sun Life Financial or simply Sun Life.

In the Philippines, at least in Metro Manila, when one talks about life insurances, probably the most popular company that comes to mind is Sun Life. It used to be Philam, but ever since the fall of its parent company AIG last year, it seems to be that Sun Life will most likely be occupying the driver seat of the insurance industry in the Philippines for the years to come.

Well, Sun Life, they claim is the first and consequently the oldest insurance company in the Philippines. Being the oldest company means that it has endured the most hardships in the country from World War I to World War II to the credit crunch last year, the Asian crisis in 1997, etc. Being the oldest also makes the company the most experienced and probably most stable for having gone through all those financial storms in history.

Sun Life also has other products besides life insurance. Some time in the late 1990’s, it opened up a new market on mutual funds. Today, it caters to several types of mutual funds ranging from low-risk money market funds, to high-risk equity-based funds.

Besides funds, it also has a market on pre-need where it sells education and pension plans.

The Sun Life Financial company in the Philippines is structured into three subsidiaires. The first is Sun Life of Canada-Philippines (abbreviated as SLOCPI) which administers the life insurance business. The second is Sun Life Asset Management Company (abbreviated as SLAMCI) which manages the mutual fund operations. The third is Sun Life Financial Plans (abbreviated SLFPI) which handles the pre-need market.

Throughout this blog, I will be discussing some of Sun Life’s products, pointing out on key features, watchouts and comparisons among products.

Welcome!

Welcome to Sell Down!

In this blog, I discuss about money matters. Anything under the sun about money. These can be but are not limited to stocks and companies, insurances, pre-need plans, funds, etc.

As I am from the Philippines, most of the financial instruments or markets I will be discussing are local to my country.