The products, known as unit investment trust funds (UITFs), are the Manulife Asia Select Equity Fund and the Asia Pacific REIT Fund of Funds, according to separate statements from the firm.
The equity fund was launched in June, while the REIT fund was launched in July, according to the firm’s website.
Product diversification
The two products are the firm’s first UITFs that invest in offshore markets. The firm distributes three other products that invest in the local market, which were launched in September last year.
“We see a growing demand for investment solutions in the Philippines,” Aira Gaspar, Manulife Trust’s Manila-based president and CEO, said in a statement that highlights the equity fund’s launch.
Turning to the REITs fund, Gaspar said in a separate statement that the asset class can provide diversification benefits to traditional portfolios consisting of fixed income and equity.
Fund products that invest in the local markets dominate the country’s UITF market. There are only 25 foreign equity investment funds out of the 73 equity UITFs in the Philippines, according to data from the Trust Association of the Philippines (TOAP).
Three are Asian products, TOAP data shows. They are ATR Asset Management’s Asia Equity Opportunity Feeder Fund, which is the local wrapper for the JP Morgan Asia Equity Dividend Fund, Security Bank’s Asia-Pacific Equity Feeder Fund, which feeds into Mitsubishi UFJ Asset Management’s Asia Pacific ex-Japan Equity Stable Growth Fund and the BPI Asset Management’s Odyssey Asia Pacific High Dividend Equity Fund, which is sub-managed by JP Morgan Asset Management.
There is only one property-focused product apart from the Manulife product, which is Banco De Oro’s Developed Markets Property Index Feeder Fund, which feeds into the iShares Developed Markets Property Yield Ucits ETF.
Manulife Trust was established in June last year after it received approval from the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, to operate as a trust corporation. This enables Manulife to distribute mutual funds to domestic investors, as well as offer customised institutional mandates and segregated accounts.
Manulife Trust is one of the few stand-alone trust corporations in the Philippines, as the BSP only approved the establishment of such firms in 2015. Previously, trusts were only allowed to operate as departments within banks.
In the Philippines, mutual fund products are regulated by different regulators, which results in different terminology.
Banks and their trust departments and stand-alone trusts distribute “UITFs” and are regulated by the BSP, while investment companies distribute “mutual funds” and are regulated by the Securities and Exchange Commission.
Manulife Trust’s funds
The equity fund invests in the stock markets of Australia, Hong Kong, Indonesia, Malaysia, New Zealand, China, the Philippines, Singapore, Korea, Taiwan, Thailand, Vietnam and Pakistan, according to the statement.
It has 30-60 holdings and invests in high-quality industry leaders and emerging companies that are able to capture opportunities arising from economic and demographic changes in the region.
“Now is an opportune time to invest in Asia, as valuations remain undemanding,” Kenglin Tan, managing director and senior portfolio manager for Asia equities (ex-Japan), said in a statement.
Meanwhile, the REIT FoF fund will be managed by Ng Hui Min, who is supported by the broader equity team in Singapore.
“We are positive on the rental outlook for office, retail and hospitality segments in Asia REITs,” Ng said in the statement.
“Office assets supply in Singapore and Australia are reaching full occupancy, while tourism is expected to pick up in Hong Kong and Singapore, which could boost retail sales and demand for hotel accommodation.
“All these mean commercial landlords and hoteliers could have greater command on rental rate revisions over the next few years, and provide REIT investors with steady income growth,” Ng said.
