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Learning More About ATRAM's Feeder Funds on GInvest


If there was one thing the COVID-19 pandemic did--I was practically forced to learn how to invest beyond showing up in person. I still prefer showing up in person to invest or to process transactions for more transparency. Given the conditions, it would be sometimes better to do some things online. I decided to get GCash (to pay restaurants that have deliveries but not through Grab and Foodpanda) and found GInvest. Previous features made it hard to count the number of units. I placed a few pesos to test my skill. I had to watch videos on how to invest effectively. Granted, it's my first time in so long to invest excess savings--I had made mistakes. Now, I decided to start buying a little more index funds and feeder funds. I decided to diversify my basket with two equity feeder funds from GInvest namely the Global Consumer Trends Feeder Fund and Global Technology Feeder Fund. 

The Peso Lab - Money Guide for Filipinos explains the feeder fund (which is also a Unit Investment Trust Fund or UITF) in this way:
What is the purpose of feeder fund? 
There are ways to purchase securities. People can buy stocks from the stock market and retail treasury bonds from the government. They can also go to banks, trust companies, and mutual fund companies. There are funds too that allow investors exposure to foreign securities.

So why is there a need for a feeder fund? Because it allows people to get exposed to diversified portfolio here and abroad.

Say that you’d like to invest in US stocks. You have two options: open an account with a stock broker that accepts non-US customers. There are several outlets like Charles Schwab, Interactive Brokers, TD Ameritrade, etc. And you’d go through an account opening process that is longer, requires various documents, requires a high starting capital, etc.

And the other option is through feeder funds. It can be relatively easy and there is no need to open an international stock brokerage account to be able to invest in foreign shares.

It would be very time-consuming if I decided to fly to the US just to get US-based stocks. I want to invest also in international stocks (which both ATRAM feeder funds in GInvest now have higher NAVPU, for now). I looked at the PDF documents from the ATRAM website and found out where the money possibly goes.

Investment allocation of the feeder funds

It would be good to know where it goes. Just don't put money into funds. I was looking at these funds and I'm convinced why I might focus on growing them too. Right now, both funds now have a higher NAVPU which means it's back to cost averaging over value cost averaging. It would mean investing less (at the same amount such as PHP 1,000.00 per month) when the market is high and investing more when the market is low. Both funds also have a 1.15% per annum trust fund. 

ATRAM Global Consumer Trends Feeder Fund

For the ATRAM Global Consumer Trends Feeder Fund, the money would go into companies (based on the April 2022 report) like:

  1. Amazon
  2. EPR Properties
  3. Lowes
  4. Nintendo
  5. Travel + Leisure
  6. US Foods
  7. Prologis
  8. Tractor Supply
  9. Electronic Arts
  10. Sony 
Having an Alexa Dot--it would be good to know that some of money that I pay for the feeder fund would go to Amazon. It means I'm indirectly holding some stocks from Amazon. Other companies there like Sony and Nintendo would also help in the feeder fund. 

What would be interesting is to see the exposure to the consumer trends are as follows:
  1. Hotel, restaurants, and leisure
  2. Internet and direct marketing retail
  3. Entertainment
  4. Equity real estate investment trusts
  5. Specialty retail
  6. Interactive media and services
  7. Food and staples retailing
  8. Household durables
  9. Other sectors

ATRAM Global Technology Feeder Fund

Now, we can also take a look at the ATRAM Global Technology Feeder Fund's allocation last April 22:
  1. Microsoft Corporation
  2. Apple Inc.
  3. Salesforce Inc.
  4. Amazon.com Inc
  5. Alphabet Inc. (Google)
  6. Samsung Electronics
  7. Texas Instruments
  8. Visa Inc.
  9. NXP Semiconductors Nv
  10. Fiserv Inc.
I would be glad to know that most of the funds are allocated to information technology. Speaking of which, I wanted to foolishly ride on the course even if I wasn't technologically inclined. Though, it doesn't mean I'm no IT expert but I can invest in IT-related stocks indirectly through this feeder fund. Microsoft is continually innovating. Apple products are a status symbol coveted by many. I still feel that I'm safe due to the constant innovation of Microsoft and Apple as two competing firms. Both will keep innovating in order to stay relevant. In turn, that may lead to an appreciation in the stock units which will drive up demand and might be best for long-term cost-averaging investments.

The rest of the Global Technology Feeder Fund involves the following:
  1. Communication services
  2. Consumer discretionary
  3. Industrials
  4. Energy
  5. Real estate

What's in it for both funds?

So far, I've reached the minimum target but I don't intend to stop there. I intend to invest in a long-term horizon of maybe five to ten years. I want to reach a little higher whenever possible. If the market gets lower again then it's time to buy more. If not, stick to cost averaging to minimize losses. Though, with the slow regrowth--it might be time to consider selling the investment if the NAVPUs will increase after some time. However, having a horizon might be more feasible because investment is money that I don't need for now but the money I'm planning to have later. 

Why do I want to invest in both consumer and technology funds? Both funds are growing. Investing in local stocks via the Philippine Equity Smart Index Fund may be a good start. I personally feel like the direct trading is scary or that my on/off short attention span is a problem. I may never become Warren Buffett but I can learn financial tips from him on how not to be broke. There'll only be one Buffett and I'm fine with it. Buffett also talks about index funds and that's why I got into the Philippine Equity Smart Index Fund. The fund in itself focuses on the stocks that comprise the Philippine Stock Exchange's index. You mean read about me wanting to learn more about that investment here.

In short, I've become an indirect stockholder but not a shareholder of foreign companies. So, I don't own a share of these companies--I only own stocks. The Accounting Tools website also would help me see where my portfolio is taking me based on units of participation:
The terms stockholder and shareholder both refer to the owner of shares in a company, which means that they are part-owners of a business.  Thus, both terms mean the same thing, and you can use either one when referring to company ownership.

To delve into the underlying meaning of the terms, "stockholder" technically means the holder of stock, which can be construed as inventory, rather than shares. Conversely, "shareholder" means the holder of a share, which can only mean an equity share in a business. Thus, if you want to be picky, "shareholder" may be the more technically accurate term, since it only refers to company ownership.

References

Websites

"Philippines Feeder Fund What It Is And How To Invest"

"The difference between a stockholder and a shareholder" (May 18, 2022)
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