GInvest Fund Breakdown: BPI’s Philippine Stock Index Fund

GCash’s GInvest allows users to invest in a wide selection of stocks and bonds via mutual funds for as low as PhP50.00. In this article, we broke down all you need to know about one investment fund GInvest offers: the Philippine Stock Index Fund (PSIF).

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

Fund Description

PSIF mainly invests in the stocks that comprise the Philippine Stock Exchange Composite Index (PSEi) in the same weights as the index. Like all other stock funds, GInvest classifies the PSIF as “Aggressive” in terms of risk profile given the greater fluctuations that come with stock prices compared to, say, bonds.

Based on PSIF’s prospectus, the minimum initial investment for the fund is PhP5,000.00 and PhP1,000.00 for each succeeding purchase. However, this only applies to those who do not purchase shares of the fund through GInvest which only requires a PhP50.00 minimum initial investment and blocks of PhP50.00 thereafter.

The PSIF is managed by BPI Investment Management, Inc. (BIMI), the investment management arm of the Bank of the Philippine Islands (BPI).

Management Fees

Index funds tend to charge lower fees than actively-managed funds since index funds are passive by nature. Nonetheless, investors should still consider management fees when purchasing index funds. Aim to select those charging the lowest fees. In our opinion, the fees charged by PSIF are acceptable.

Management Fee0.475% p.a.
Distribution Fee0.475% p.a.
Transfer Agent Fee0.050% p.a.
Total1.00% 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. PSIF is no different as it charges a flat 1.00% on the total withdrawal if an investor has held his shares for less than ninety (90) days.

Holding PeriodEarly Redemption Fee
Less than 90 days1.00%
More than 90 daysNone

Investment Considerations

Merits

  • Convenient way of investing in a wide variety of shares in the country’s leading companies
  • Lower fees compared to actively-managed funds

Risks

  • As with any investment, returns are not guaranteed and research is very much necessary.
  • Stocks perform better over longer time periods. Therefore, investing in a stock index fund could produce better results if shares of the fund are held over a longer period of time.