GInvest Fund Guide: ALFM Global Multi-Asset Income Fund

GCash’s GInvest allows users to invest in a wide selection of stocks and bonds via investment funds for as low as PhP50.00. In this article, we break down one fund which more recently spiked in popularity after some serious marketing efforts from several brokers: the ALFM Global Multi-Asset Income Fund (ALFM GMIF).

For a step-by-step run-through detailing the process of buying shares of investment funds through GInvest, see our guide: How to Invest in Mutual Funds with GCash.

For all you need to know about mutual funds, see our guide: What is a Mutual Fund?

Fund Description

The ALFM GMIF is a feeder fund relying on the active management of its appointed target fund: the BlackRock Global Multi-Asset Income Fund (BGMIF). In effect, the ALFM GMIF invests the money you place under its care into BGMIF and thus “feeds” off of BGMIF’s performance.

Based on ALFM GMIF’s prospectus, the minimum subscription amount is USD100.00 or its Peso equivalent and a further USD20.00 or its Peso equivalent for succeeding additional subscriptions. However, investing in the ALFM GMIF through GInvest allows investors to buy shares in the fund for as little as PhP1,000.00.

It should be noted that the ALFM GMIF also regularly distributes a dividend to investors unlike BPI’s Philippine Stock Index Fund or most other index funds today for that matter. As per ALFM GMIF’s prospectus, the dividends can come in the form of cash or additional shares on a monthly basis or whenever practicable.

Management Fees

The tricky thing with feeder funds is that their fees can look misleadingly low given that they are passively managed like index funds. However, since they usually feed off of the performance of an actively managed fund which charges an appropriate active management fee, the investor actually has to pay for the fees charged by the feeder fund and the fees charged by the actively managed fund.

Summarized below are the fees charged by ALFM GMIF amounting to 1.00% of the total fund per annum.

Management Fee0.475% p.a.
Distribution Fee0.475% p.a.
Transfer Agent Fee0.050% p.a.
Total1.00% p.a.

However, the returns after fees received by ALFM GMIF investors come only after the fees charged by BGMIF which are further summarized below.

Management Fee0.600% p.a.
Administration Fee0.250% p.a.
Custodian Fee0.0024% p.a.

Redemption

Investment funds usually charge a penalty for early redemption of shares. This is to prevent investors from withdrawing their funds all too quickly and harming the fund’s liquidity. ALFM GMIF charges a 1.00% early redemption fee if units are redeemed before the minimum holding period of 180 days.

Holding PeriodEarly Redemption Fee
Less than 180 days1.00%
More than 180 daysNone

Investment Considerations

Merits

  • The fund is a fast and convenient way of investing in a basket of GLOBAL companies.
  • Dividends declared by the fund provide regular cashflow.

Risks

  • Investors technically shoulder two (2) fees: the target fund’s (BGMIF) and the feeder fund’s (ALFM GMIF).
  • Investors may be better off just investing in an index fund like the PSIF.
  • As with any investment, returns are not guaranteed and research is very much necessary.

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