We understand that you have questions. And we at First Metro Asset, made it a priority to answer. Here are our FAMI Insights released March 20, 2020.
What is happening in the market?
The market has dropped significantly due to fears of a global economic recession brought by the COVID-19 pandemic.
While the governments of the affected countries have already announced their respective fiscal and monetary stimulus to calm down the markets, it was not enough to allay the fears of the investors.
The domestic market’s selldown was made worse by the FTSE rebalancing which reduces the country’s weighting. FTSE is one of the benchmark that foreign fund managers use for their performance.
While the Philippines may experience a slowdown in its economy, some economists estimate COVID-19 impact to Philippine economy to be 1.5% of GDP, it will still post a positive economic growth as against the rest of the world where a recession is expected.
How does FAMI cope with the current situation?
For the FAMI managed funds, FAMI has reduced its equity exposure before the situation has worsened. Thus, it has been able to reduce its losses relative to the benchmark. FAMI also believes that the current composition of its portfolios is best positioned to benefit from the recovery of the economy.
FAMI remains operational and has put in place various steps to effectively and efficiently serve the investing public.
For instance, FAMI continues to accept investment transactions most especially from those who would wish to participate in the market. FAMI also shares tips, advice and information on its various social media such that our investors and the general public are informed and stay relevant.
FAMI has its Relationship Managers and Investment Advisors that remain to be easily accessible to their clients most especially in these volatile times, giving them sound, professional and prudent financial advice.
Lastly, FAMI Investment team does regular reviews of its fund's portfolio holdings and acts accordingly to take advantage of opportunities that the current market conditions provide.
What should I do that the bottom of the downtrend of the market is uncertain?
When the market has been experiencing unprecedented movements as a reaction to the COVID-19 Pandemic, the level of uncertainty increases. Uncertainty itself can affect the economy on both the micro and macro levels, which eventually affects your investments.
We believe that the best defense is to be as well-informed as much as possible. These uncertainties can lead to great opportunities for investors, who may have excess funds.
For those who are invested, you may mitigate uncertainty and risk by staying invested in the funds and just riding this one out. One can't go wrong over the long term by keeping yourself well-informed and getting into a position to take advantage of prices when the market dips and riding it out when it eventually moves up.
Is it safe to add more to my mutual fund account?
We at FAMI have different funds for different investment horizons: short-, medium-, and long-term.
The stock market has been going down significantly these past days as a reaction to the COVID-19 pandemic. But for investors in the long-term, it is a very good time to buy equity and balanced funds--even at small amounts--to accumulate shares that would eventually go up.
For conservative investors, you may look into adding to our money market fund for funds that you would not need for the short-term; the bond fund would also be good for those investors who are looking for an instrument that provides higher returns than ordinary savings accounts, for funds needed more than one year.
FAMI has Investment Advisors and Relationship Managers that are there to give you sound and prudent advice in these volatile times.
As an investor, how do I take advantage of this situation?
For long-term investments, you may buy as the market dips. Stay informed and watch the news, most especially on the market and the economy. Stay tuned also to FAMI's website and social media for any announcement and information.
Always keep in touch with your Relationship Manager or Investment Advisors to review your portfolio and financial goals as they are there to guide you in these volatile times.
What should be the best thing to do at times like this?
As the stock market goes down significantly in light of the current COVID-19 pandemic, one might be inclined to shy away from investing. But for long-term investors, times like these are unique opportunities to buy for long-term goals such as for your retirement.
It is best to stay informed: read and watch the news on relevant and credible sources so you are aware of what is happening with the markets and the economy. FAMI shall also share tips and information through its various social media sites to help investors like you.
You may also contact your Relationship Manager so they can guide you in these volatile times.
Trust that FAMI is there to handhold you regardless of market conditions. We at FAMI advise investors to match their financial goals with investment instruments. Contact your Relationship Manager so they can guide you on reviewing your financial goals and how you can best position your portfolio in these challenging times.
Any advisories and announcements will be released via our website www.fami.com.ph and our official social media channels: