Sun Life introduces investment option
Sun Life Asset Management Company, Inc. (SLAMCI) launched the Sun Life Prosperity World Equity Index Feeder Fund, which gives domestic investors the chance to tap on the MSCI All Country World Index (ACWI).
ACWI represents the performance of over 2,000 small to large capital stocks from more than 40 developed and emerging markets.
In a virtual briefing, SLAMCI President Valerie Pama said their latest product “was designed specifically for experienced investors who can tolerate significant fluctuations in the value of investments and currency movements, and do not mind market volatility.”
“They know that the potential challenges could lead to the capital appreciation for their investment portfolios and bring them closer to their long-term financial goals,” she said.
The minimum investment in the Sun Life Prosperity World Equity Index Feeder Fund is PHP50,000 and additional investments need to be on increments of PHP10,000.
During the same briefing, Sun Life of Canada (Philippines) Inc. Global Funds Head Mikko Vergara said that even with the volatilities in the global equities market to date, it is expected to eventually recover and post improvements.
He said their latest product will allow domestic investors to tap the performance of information technology and healthcare sectors, which are not available in the local bourse.
Aside from this, Vergara said emerging markets like the Philippines “tend to deliver better returns” compared to developed markets because of factors like demographics.
“Having more funds in different markets gives you better opportunity to sort of tide over in this challenging time,” he added.
Vergara said investing in foreign equities is “scary” because domestic investors are not used to placing their funds overseas, but added ACWI is the lower volatility outlet compared to other investment options because of the number of equity players from lots of countries.
“It is new to us but statistically it is less risky partly because it has more constituents within,” he said.
Meanwhile, Vergara forecasts the peso to range between 49-51 against the US dollar this year.
The peso is currently on appreciation mode against the US dollar given the weakness of the latter due anxieties as a result of the pandemic, among others.
But Vergara said the greenback historically appreciated by about 3 percent annually on the average against the local currency in the past.
“I think investors should think about that. If you think investing in the underlying stocks in the ACWI will deliver a return of more than that 3 (percent appreciation of the US dollar against the peso). I think it’s a worthwhile risk to look at,” he added.
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