The bull, the bear and the virus

June 14, 2020

AMIDST COVID-19,  BPI Asset Management and Trust Corporation (BPI AMTC)  continues to engage its investors by keeping them well-informed  of the market situation and possible opportunities in this crucial time. 

BPI AMTC launched last week a new Webinar series, “The Bull, The Bear and The Virus – The Anatomy of Resilient Investment Plans”.  BPI AMTC  gave an update on the global markets and the opportunities to diversify one’s portfolio,  identified the most promising sectors to look out for as the world starts to recover from COVID-19,  and how the  world’s central banks are reacting  to breathe new life in the financial markets.
Despite a certain degree of  recovery  since the worst sell-off in March, we should not extrapolate too much into the future as the world is still fraught with uncertainty and risk. The fundamentals continue to show poor economic data and unemployment is on the rise.

BPI AMTC’s Head of Investments Solution, Martin Allen Dee,  talked about the importance of diversification, and exploring global opportunities as a way of diversifying one’s portfolio. I contributed my few centavos worth by sharing my own experience as a long-time investor and relating how the Bangko Sentral reacted to the 2008 global financial crisis and the current COVID-19 crisis. The BSP has been putting money, by buying bonds, providing liquidity for banks, easing restrictions, allowing the banks to take a breather.
Martin Allen Dee’s  key takeaways:

-There is a common misconception that investing in global assets is riskier but this is not always the case. In fact over a ten-year period, the numbers show that global equities gave better returns (with less volatility) compared to PSE.

-The Philippine market is highly concentrated by company, sector and revenue source. 5 conglomerates dominate the market. Ergo, invest in global assets to benefit from a fully diversified portfolio.

-The COVID-19 pandemic will change the way consumers  and  businesses behave. Use this period to “future proof” your portfolio by investing in emerging global themes through global stocks and bonds. There are very interesting opportunities in 1) innovation and technology, 2) sustainability and ESG investing and 3) health care and medical sciences.

-Remain cautious. Take on risks on your portfolio but be wary that the room for error is large given the dislocation between the real economy and the market.

- “Timing the bottom” and “timing the peak” are extremely difficult to do. Having a regular investment plan is very important. This allows the investor cost averaging.

-Stay calm and stay invested. If you have a longer investment horizon, if you are patient and you don't get bothered by short-term volatilities, if you are fully diversified,  you will reap the reward.

BPI AMTC, a stand-alone trust corporation and  a wholly owned subsidiary of the Bank of the Philippine Islands (BPI), ended 2019 with P730 billion in assets under management (AUM), and registered a record growth of 24% year-on-year and approximately 7% growth for the past five years.

BPI AMTC was named the Best Asset Manager for 2020 by International Finance magazine for the fourth year in a row. BPI AMTC recently garnered two wins at the Search for the Best Managed Funds of the Year Awards sponsored by the Charter Financial Analysts  Society of the  Philippines. BPI AMTC´s  BPI Balanced Fund product, and BPI Global Equity Fund-of-Funds were adjudged the best products in their respective categories.

BPI AMTC President,  Sheila Marie U. Tan,  said these prestigious recognitions “are a testament to our competence in achieving our objective of helping Filipinos with their financial goals in the most efficient and strategic way.”

Disclosure: The author sits in the board of BPI AMTC.

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