The products, known as unit investment trust funds or UITFs, are the Manulife Stable Income Fund, the Income Builder Fund and the Equity Wealth Fund.
The stable income fund invests in fixed income securities with maximum remaining term to maturity of up to three years. The income builder fund invests in government and/or high quality corporate debt and other liquid fixed income securities.
The equity wealth fund invests in stocks listed on the Philippine Stock Exchange, fixed income securities and other liquid fixed income instruments.
“While the financial markets are likely to be moved by external developments, we believe that the Philippines’ strong economic growth accompanied by relatively low inflation expectations provides a favourable backdrop for the local bond and equity markets,” said Aira Gaspar, Manulife Trust’s president and CEO, in the statement.
The launch of the three funds comes after Manulife received approval from Bangko Sentral ng Pilipinas (BSP), the country’s central bank, to operate as a trust corporation in June. This enables Manulife to distribute mutual funds to domestic investors, as well as offer customised institutional mandates and segregated accounts.
The BSP allowed the establishment of stand-alone trust corporations in 2015 and only a few exist.
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.
“With the launch of the trust company and the new UITF products, we are poised to ride the robust growth momentum in the Philippines’ fund industry, which saw the assets under management held by UITFs grow by 31% over the past three years,” Michael Dommermuth, head of wealth and asset management for Asia, said in the statement.
The combined assets of UITFs and mutual funds in the country grew 266% to $18.25bn in 2015 from just $4.99bn in 2011, according to data from Cerulli Associates. The firm estimates that the overall industry will have a compounded annual growth rate of 12.6% from 2015-2020.
According to Manulife AM, the combined AUM of UITFs, mutual funds and investment-linked insurance products is around $30bn.
Manulife has been operating in the Philippines as an insurance firm since 1907. Besides its UITFs and traditional insurance products, the firm also distributes investment-linked insurance products in the country, with an AUM of around $1bn.
