June 13, 2024

A Beginners Guide To Philippine Best Balanced Funds – Peso Lab

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Do you know that there is a cross between an equities fund and bond fund? It’s called balanced fund. It is invested in both, so it actually gives you the best of both worlds.

Find out why investing in a balanced fund may be suitable for you.

What is a balanced fund?

A balanced fund is a hybrid of an equities fund and bond fund. Its assets are a mix of stocks and debt instruments such as bonds or money market securities. In effect, it combines the high risk/high growth potential associated with stocks and the low risk/modest earnings from fixed income instruments.

Here is a portfolio of a balanced fund.

Sample portfolio of a UITF balanced fund.

As you can see, over half of its allocation is into equities and a little less than the other half is into government-issued bonds, time deposits and money market.

What is the goal of a balanced fund?

A balanced fund seems to occupy the space between the aggressive equities and conservative fixed income assets. Its interesting composition makes it necessary to be a very actively managed fund. In turn, this is reflected on its fees.

Consequently, its goal is two-fold. It tries to match or exceed the stock index—which is composed of blue chip stocks, the top 30 Philippine corporations—as well as the 91- or 100-day return of Philippine government bills.

It is important to note though that some funds may not have exactly the same goal. Nonetheless, they may share the common characteristic of comparing its returns to some benchmark in stocks and fixed income.

Who sells balanced funds

Just like any other investment fund, you can actually invest through the following companies:

It’s sort of unusual that there aren’t any balanced fund available under Personal Equity and Retirement Account (PERA) just yet. Maybe in the future, it’s going to be offered to give the investing public more choices.

List of balanced funds in the Philippines

Below is the list of balanced funds excluding those that are available through VUL.

NAME TYPE
AB CAPITAL BALANCED FUND UITF
ATRAM Dynamic Allocation Fund, Inc. Mutual fund
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class) UITF
ATRAM Philippine Balanced Fund, Inc. Mutual fund
ATRAM US Multi-Asset Income Feeder Fund (PHP Unit Class) UITF
BDO PESO BALANCED FUND UITF
BEST BALANCED FUND UITF
BPI Balanced Fund UITF
BPI Bayanihan Balanced Fund UITF
CHINA BANK BALANCED FUND UITF
Cocolife Dollar Fund Builder, Inc. Mutual fund
CTBC Bank – ATRAM Philippine Balanced Feeder Fund UITF
First Metro Save and Learn Balanced Fund Inc. Mutual fund
Grepalife Balanced Fund Corporation Mutual fund
LANDBANK Growth Fund UITF
Manulife Global Preferred Income Feeder Fund (PHP Unhedged Class A) UITF
Metro Aspire Balanced Feeder Fund UITF
Metro Balanced Fund UITF
NCM Mutual Fund of the Phils., Inc. Mutual fund
Odyssey Diversified Balanced Fund UITF
Odyssey Diversified Capital Fund UITF
PAMI Asia Balanced Fund, Inc. Mutual fund
PAMI Horizon Fund, Inc. Mutual fund
Philam Fund, Inc. Mutual fund
PNB BALANCED FUND (formerly PNB PRESTIGE BALANCED FUND) UITF
RBank Balanced Fund UITF
RBank Tax-Exempt Retirement Fund                  (A Balanced UITF) UITF
RIZAL BALANCED FUND UITF
SB PESO ASSET VARIETY FUND UITF
Solidaritas Fund, Inc. Mutual fund
Sterling Balanced Fund UITF
Sun Life of Canada Prosperity Balanced Fund, Inc. Mutual fund
Sun Life Prosperity Dollar Advantage Fund, Inc. Mutual fund
Sun Life Prosperity Dollar Wellspring Fund, Inc. Mutual fund
Sun Life Prosperity Dynamic Fund, Inc. Mutual fund
UCPB Balanced Fund (Formerly United Balanced Fund) UITF
UnionBank Capital Accumulation Global Fund of Funds Peso Class Portfolio UITF
UnionBank Peso Balanced Portfolio UITF

Advantages of balanced fund

Best of both worlds

By investing in a balanced fund, you get to derive the benefits from stocks and fixed income. You get both the earning from these two different asset classes.

Moderate risk

Due to its composition, its risks can be described as moderate. While equities can be volatile, the fixed income part of its allocation provides the relatively safer cushion.

Diversified portfolio

You are invested to a portfolio that is diversified. You are exposed to both equities and relatively risk-free bonds and money market securities. This means that losses from a volatile stock market may possibly be softened by the its fixed income assets.

Disadvantages of a balanced fund

Moderate returns

The allocation is divided in two different securities that have opposite risk-return profiles. The consequence is that you may not be able to fully take advantage in maximizing your returns in a rising stock market.

Higher fees

Because the fund manager has to handle different asset classes, the fees may be higher compared to passively managed and low-cost index funds.

Best balanced funds in the Philippines

Here’s the list of the top balanced funds arranged from highest to lowest returns for the year 2019. See top UITF and best mutual funds articles respectively for the complete list. Again, past performance does not guarantee future returns.

TYPE BANK FUND NAME ROI
UITF BPI Odyssey Diversified Capital Fund 12.66%
UITF BPI Odyssey Diversified Balanced Fund 10.60%
UITF Union Bank UnionBank Peso Balanced Portfolio 9.76%
UITF Robinsons Bank RBank Tax-Exempt Retirement Fund 9.55%
UITF Security Bank SB PESO ASSET VARIETY FUND 9.51%
UITF BPI BPI Bayanihan Balanced Fund 8.13%
UITF China Bank CHINA BANK BALANCED FUND 7.83%
Mutual fund Philam PAMI Horizon Fund, Inc. 7.21%
UITF RCBC RIZAL BALANCED FUND 6.73%
Mutual fund Philam Philam Fund, Inc. 6.61%
UITF Metrobank Metro Balanced Fund 6.59%
UITF BDO BDO PESO BALANCED FUND 6.54%
UITF Metrobank Metro Aspire Balanced Feeder Fund 6.39%
UITF Land Bank LANDBANK Growth Fund 6.01%
UITF UCPB UCPB Balanced Fund 5.82%
Mutual fund Sun Life Sun Life of Canada Prosperity Balanced Fund, Inc. 5.81%
Mutual fund Sun Life Sun Life Prosperity Dynamic Fund, Inc. 5.77%
Mutual fund FAMI First Metro Save and Learn Balanced Fund Inc. 3.46%
UITF BPI BPI Balanced Fund 3.30%
UITF PNB PNB BALANCED FUND 2.78%
UITF AB Capital AB CAPITAL BALANCED FUND 2.77%
Mutual fund ALFM Solidaritas Fund, Inc. 2.58%
Mutual fund Grepalife Grepalife Balanced Fund Corporation 1.92%
Mutual fund ATRAM ATRAM Philippine Balanced Fund, Inc. -1.27%
UITF Robinsons Bank RBank Balanced Fund -2.54%
UITF PBCOM BEST BALANCED FUND -3.05%
Mutual fund ATRAM ATRAM Dynamic Allocation Fund, Inc. -5.36%

Fees of balanced funds

The table below contains details of balanced funds:

  • Initial stands for the minimum required starting capital. This is the amount that the company requires for you to start investing.
  • Add means the least amount that you can add to your investment.
  • Sales load is the fee that the investment fund company charges every time that you invest. It may be collected either upfront or when you decide to get your money back.
  • Hold describes the period of time that you’re expected to keep your investment.
  • Exit fee stands for the charge collected when you withdrawing your money before the holding period is up.
  • Fee is the management fee which is used to pay for the operation of the fund.
NAME TYPE INITIAL ADD SALES LOAD HOLD EXIT FEE
ATRAM Dynamic Allocation Fund, Inc. Mutual fund 50 50 5% 90 days 1.12% 1.75%
ATRAM Philippine Balanced Fund, Inc. Mutual fund 50 50 5% 90 days 1.12% 1.75%
First Metro Save and Learn Balanced Fund Inc. Mutual fund 5,000 1,000 2% 6 months 1% 1.88%
Grepalife Balanced Fund Corporation Mutual fund 5,000 500 2% 1 year 2% 1.88%
NCM Mutual Fund of the Phils., Inc. Mutual fund 100,000 10,000 3.36% 6 months 1% 1.80%
PAMI Horizon Fund, Inc. Mutual fund 5,000 1,000 2.80% 6 months 1% 1.80%
Philam Fund, Inc. Mutual fund 1,000 500 3% 6 months 1% 2%
Solidaritas Fund, Inc. Mutual fund 5,000 1,000 1.50% 6 months 1% 2%
Sun Life of Canada Prosperity Balanced Fund, Inc. Mutual fund 1,000 1,000 2% None None 2%
Sun Life Prosperity Achiever Fund 2028, Inc. Mutual fund 1,000 1,000 None 5 years 5% undefined
Sun Life Prosperity Achiever Fund 2038, Inc. Mutual fund 1,000 1,000 None 5 years 5% undefined
Sun Life Prosperity Achiever Fund 2048, Inc. Mutual fund 1,000 1,000 None 5 years 5% undefined
Sun Life Prosperity Dynamic Fund, Inc. Mutual fund 1,000 1,000 2% 30 days 1% 2%
AB CAPITAL BALANCED FUND UITF 25,000 10,000 30 calendar 1.00% of the Principal 1.25% PA
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class) UITF 1,000 1,000 0 calendar none 0.95%
ATRAM US Multi-Asset Income Feeder Fund (PHP Unit Class) UITF 1,000 1,000 0 calendar none 0.95%
BDO PESO BALANCED FUND UITF 10,000 10,000 30 calendar 0.50% of the Original Participation Amount 1.00% p.a.
BPI Balanced Fund UITF 10,000 1,000 0 calendar None 1.50%  p.a.
Odyssey Diversified Capital Fund UITF 10,000 5,000 0 calendar None 1.50% p.a.
Odyssey Diversified Balanced Fund UITF 10,000 5,000 0 calendar None 1.50% p.a.
BPI Bayanihan Balanced Fund UITF 10,000 1,000 0 calendar None 0.30% p.a.
CHINA BANK BALANCED FUND UITF 5,000 1,000 30 calendar 1.0% of the amount redeemed 1.0% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
CTBC Bank – ATRAM Philippine Balanced Feeder Fund UITF 10,000 10,000 30 calendar 0.50% 1.00%
LANDBANK Growth Fund UITF 5,000 1,000 30 calendar 25% of net earnings (P500 minimum) 1.25%
Manulife Global Preferred Income Feeder Fund (PHP Unhedged Class A) UITF 50,000 5,000 30 calendar 1.00% as a % of the amount withdrawn 1.75%
Metro Balanced Fund UITF 25,000 25,000 30 calendar 50% of income on redeemed amount 2.00%
Metro Aspire Balanced Feeder Fund UITF 5,000 1,000 0 calendar None None
BEST BALANCED FUND UITF 10,000 10,000 90 calendar 0.25% of redemption value 1.5% p.a. 
PNB BALANCED FUND (formerly PNB PRESTIGE BALANCED FUND) UITF 10,000 10,000 30 calendar 50% of Income Earned 1.25% p.a.
RIZAL BALANCED FUND UITF 5,000 1,000 30 calendar 0.25% of redemption proceeds 1%
RBank Balanced Fund UITF 50,000 10,000 90 calendar 1/2% of redemption amount or P500.00 whichever is higher 1.50%
RBank Tax-Exempt Retirement Fund                  (A Balanced UITF) UITF 1,000,000 1,000 0 calendar N/A 0.15%
SB PESO ASSET VARIETY FUND UITF 10,000 5,000 0 calendar N/A 1.5%
Sterling Balanced Fund UITF 10,000 5,000 30 calendar 0.50% of the net proceeds 1.25%
UnionBank Peso Balanced Portfolio UITF 100,000 0 90 calendar 0.25% or Php 500 whichever is higher 2% on equity, 1% on fixed income, 0.25% of pooled funds; 0.53% per quarter
UnionBank Capital Accumulation Global Fund of Funds Peso Class Portfolio UITF 5,000,000 5,000 90 calendar Php 500 or 0.25%, whichever is higher  1.5% per annum
UCPB Balanced Fund UITF 1,000 1,000 30 calendar 5% 1.75%

Is balanced fund right for you?

A balanced fund may be right for people who would want to avoid being completely invested in equities and therefore being exposed to its risks. The volatility of stocks may be dampened by the comparatively safer risk profile provided by fixed income assets.

Also, it can also be appropriate for people who are saving up for a financial goal a very long term, such as retirement. As we age, our risk appetite may change from being aggressive in our younger years to becoming conservative when we get older. A balanced fund can be a good option to park your savings as your risk appetite changes.



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