Trying to Understand More About the Philippine Equity Smart Index Fund

There was a time when I had some excess savings. I was worried my money was getting idle. Sure, savings is king but letting it sit idle in a savings account can be a bad thing. Sure, I'm having my AXA Chinese Tycoon Fund for some time and I haven't withdrawn a single cent from it. I decided to use GCash and found out how it's actually convenient. With GCash, there's also GInvest. One of GInvest's greatest products for me to indirectly get into stocks would be the Philippine Equity Smart Index Fund. I placed a few pesos at first because of the low rate. However, I decided to aim to invest at least PHP 1,000.00 per month (or more during a dip but not too much either) or reach a certain target before the year ends. Of course, I've got to curb my impulsive behavior by choosing not to invest too much and not have savings.

The ATRAM Philippine Equity Smart Index Fund combines both active and passive investment. Some people prefer purely active or purely passive. It's best to have a mixture of both when necessary. It's like somebody may buy stocks and hold them for a long time. Meanwhile, that same person may also be participating in stock trading. It's like growing coconuts and potatoes. Potatoes take a shorter time to grow and harvest. Coconuts take a longer time to harvest. There's a horizon to be on the lookout for. Some people will trade some stocks as soon as the market is up. Others will simply hold on to the stocks because of dividends. Just knowing about the enhanced index approach with a trust fee of 1.5% per annum (in contrast to more expensive mutual funds) would be a good start. I'm into the stock market now without actually doing the portfolio myself. Meanwhile, I still feel the need to do some trading but my short attention span is a killer. I might make more wrong moves like I did in the past.

What are the fund pickings? It would be good to know these are from reputable companies such as:

Ayala Corporation (AC)
AC Energy Corporation (ACEN)
Aboitiz Equity Ventures, Inc. (AEV)
Alliance Global Group, Inc. (AGI)
Ayala Land, Inc. (ALI)
Aboitiz Power Corporation (AP)
BDO Unibank, Inc. (BDO)
Bank of the Philippine Islands (BPI)
Converge Information and Communications Technology Solutions, Inc. (CNVRG)
Emperador Inc. (EMP)
Globe Telecom, Inc. (GLO)
GT Capital Holdings, Inc. (GTCAP)
International Container Terminal Services, Inc. (ICT)
Jollibee Foods Corporation (JFC)
JG Summit Holdings, Inc. (JGS)
LT Group, Inc. (LTG)
Metropolitan Bank & Trust Company (MBT)
Megaworld Corporation (MEG)
Manila Electric Company (MER)
Monde Nissin Corporation (MONDE)
Metro Pacific Investments Corp. (MPI)
Puregold Price Club Inc. (PGOLD)
Robinsons Land Corporation (RLC)
Security Bank Corp. (SECB)
SM Investments Corp. (SM)
San Miguel Corp. (SMC)
SM Prime Holdings, Inc. (SMPH)
PLDT, Inc. (TEL)
Universal Robina Corporation (URC)
Wilcon Depot, Inc. (WLCON)

Meanwhile, an allocation report was given by ATRAM last May 2022 as an example of allocations for a certain period of time:

SM Investments Corp.--13.2%
SM Prime Holdings Inc.--11.1%
International Services Container Inc.--7.2%
BDO Unibank Inc.--7.1%
Ayala Land Inc.--6.9%
Ayala Corp.--6.4%
PLDT--6.0%
BPI--5.7%
JG Summt Holdings--4.3%
MERALCO--3.3%

Most of the money given is invested in equities while a very small percentage is in cash. The whole objective is long-term. In short, I don't invest in this fund hoping that my PHP 1,000.00 allotment (or more) will make me a billionaire overnight. That's just plain stupid to believe in a scam where you can turn PHP 1,000.00 into PHP 1 Billion in such a short time. It would be nothing more than the swindler desiring to run away with the money. Nobody became rich in proper stock trading. People can become poor overnight in a mishandled stock transaction such as buying high and panic selling during a crash. My objective is to diversify my investments, not for unusually big expected returns. Rather, it's to make sure that diversified funding gives me good returns while taking more risk here and less risk there.

The horizon here is going to be long-term and not short-term. It would mean I don't expect to make a profit now. Profits are anything but instant. I plan to do it for five years or even ten years point before redeeming it entirely. It might be good to extend one's horizon for as long as possible. I still expect that I might diversify between the index funds and the feeder fund allocations. It would be time to decide where that PHP 1,000.00 goes into. It would be like, "Should I sell this fund or should I let it grow?" This is what investing in the Philippine Equity Smart Index Fund is. It's all about long-term thinking--something I tend to struggle with as I must daily fight my short attention span.

Now, to know my limited rights as an indirect stockholder. The Accounting Tools would tell me the following:

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.

What happens is I own an inventory of stocks from the selected companies (via the portfolio) of the companies picked. However, I don't own a share of them. Instead, it's all about units of participation which is what a UITF is about. My aim is to get some capital appreciation and hope to sell off (eventually) after a period of five to ten years.

References

Websites

"ATRAM Philippine Equity Smart Index Fund"

https://www.atram.com.ph/funds/uitf/ATRPHSE

"Top 30 Companies of the Philippine Stock Exchange Index (PSEI) in 2022" by Fehl Dungo (Updated: March 15, 2022)

https://philpad.com/list-of-companies-in-psei/

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