Manulife to launch funds in the Philippines

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Manulife has received authorisation from Bangko Sentral ng Pilipinas (BSP), the country’s central bank, to operate as a trust corporation, enabling the firm to distribute mutual funds in the Philippines.

Manulife to launch funds in the Philippines

 

The entity, Manulife Asset Management and Trust Corporation, intends to distribute mutual funds (known as unit investment trust funds or UITFs) to retail investors in the third quarter this year, according to a statement from the firm.

Moreover, in the institutional space, the firm will be offering customised institutional mandates and segregated accounts. 

Aira Gaspar, who has been the firm’s chief investment officer for the Philippines, has been appointed as the trust corporation’s CEO.

The firm declined to comment on what types of UITFs it will be distributing and whether it will be launching feeder funds in the country.

Manulife Asset Management and Trust Corporation 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.

Other stand-alone trust corporations in the Philippines include ATRAM Trust Corporation, spun off from Maybank ATR Group in 2016 and BPI Asset Management and Trust, which emerged from the Bank of the Philippine Islands in January.

In the Philippines, banks and their trust departments, stand-alone trust corporations and investment companies are allowed to distribute mutual funds. However, they are regulated by different regulators, which results in different terminology.

Banks and trusts distribute “UITFs” and are regulated by the BSP while investment companies distribute “mutual funds” and are regulated by the Securities and Exchange Commission.

Philippine fund industry 

Manulife, which has been operating in the Philippines as an insurance firm since 1907, believes that the country is a fast growing asset management market in Southeast Asia. 

Besides its traditional insurance products, the firm also distributes investment-linked insurance (ILAS) products, according to the firm’s statement.

The publication Entrepreneur Philippines estimates that investment-linked insurance product assets in the Philippines reached around PHP 441.3bn ($8.8bn) last year.

“We have seen great interest in a wider range of investment solutions among Filipinos,” Gaspar said in the statement.

The combined assets of UITFs and mutual funds in the country grew 266% to $18.25bn in 2015 from $4.99bn in 2011, according to data from Cerulli Associates. The firm estimates that the overall industry has a compound annual growth rate of 12.6% from 2015-2020.

Philippine fund industry AUM

Fund product

2011

2012

2013

2014

2015

UITFs

2.91

4.11

11.48

11.89

13.50

Mutual funds

2.07

2.92

4.14

4.56

4.75

Total

4.99

7.04

15.62

16.45

18.25

Source: Cerulli Associates

However, nearly 80% of those assets are controlled by only five players in the market, according to Cerulli data.

 Top five fund managers in the Philippines

Rank

Fund Manager

Fund Type

2015

AUM (PHP billions)

Marketshare (%)

1

Banco De Oro Universal Bank (BDO)

UITF

273.0

29.9%

2

BPI Asset Management

UITF

165.5

18.1%

3

Metropolitan Bank and Trust

UITF

118.0

12.9%

4

BPI Investment Management

Mutual fund

96.9

10.6%

5

Sun Life Asset Management

Mutual fund

51.7

5.7%

Source: Cerulli Associates

 

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