A Letter From Francisco Juan

A LETTER FROM FRANCISCO JUAN

President, Mutual Fund Management Company of the Philippines, Inc.

Dear FRIENDS,

I relocated to Manila (after 32 years in Chicago) in May of last year in response to Lilia Clemente's invitation to head the Mutual Fund Management Company of the Philippines. LiliaÆs dream was to help spark a rebirth of the mutual fund industry in the Philippines by establishing the KABUHAYAN FUND.

This Growth and Income mutual fund provides a new investment vehicle for small savers (P5,000 minimum). In the process, it helps mobilize domestic savings and contributes to the countryÆs capital development. For the past 18 months, we have devoted ourselves completely to this mission and are very encouraged by the publicÆs response, despite recent reverses in the Philippine equity market.

In 1995, The Mutual Fund Management Company of the Philippines, Inc. (MFMCP) was organized by four companies recognized as "pillars of strengths" in the financial services industry. These are Philippine National Bank (PNB), Clemente Fund Management - Asia (CFMA) of New York, Daiwa Asset Management Co., Ltd. of Japan and National Investment Trust Company (NITC) of Taiwan.

In the same year, The Mutual Fund Company of the Philippines, Inc. (MFCP) was established. Its first portfolio, Kabuhayan Fund, was designed as a growth and income fund for institutions and individuals. MFMCP is the Investment Adviser and Distributor of Kabuhayan Fund.

The Kabuhayan Fund pools the money of investors in to a variety of securities such as stocks and treasury bills. It has grown to be the largest mutual fund in the country whose roster of institutional investors include the following: PNB Provident Fund, San Miguel Corporation Retirement Fund, AFP-RSBS Retirement Fund, Meralco Pension Fund, Pag-Ibig Fund, PLDT Beneficial Trust Fund, Asian Development Bank and DEG (a German Development Bank). On the strength of its big institutional investors, MFCP is able to give individual Filipino investors the opportunity to participate in the growth of the capital markets and of the Philippine economy.

Moreover, Kabuhayan Fund offers its investors the following benefits:

  1. Professional Management. Investors can benefit from the knowledge and experience of professional investment managers. These experts, by virtue of the size of the funds they manage, have access to information which enable them to make wise investment decisions. This allows the investors to concentrate on what they need to do - build their careers and attend to their families.
  2. Affordability. With a minimum investment of as low as P5,000 ($150 at current rates), investors can enjoy the benefits of the booming Philippine capital market.
  3. Diversification. Mutual Funds generally invest in a wide range of investments usually across several industries and across many companies in each industry. This serves to reduce the risk involved. Ordinarily, this strategy would have been available only to large investors. Kabuhayan Fund's investment policy is to invest solely in Philippine securities.
  4. Accessibility. While most mutual fund companies encourage its investors to be in for the long term, they also provide investors access to their money. If for some reason, the investor should need some or all of the invested money, mutual fund companies are ready to redeem the shares at net asset value (NAV) less any applicable redemption fee.
Francisco L. Juan, President, Mutual Fund Management Company of the Philippines, Inc.
Kabuhayan Fund also has missions to fulfill for the country and the Philippine economy. These include: to help mobilize domestic savings and provide investment opportunities to all Filipinos through the securities market, to help broaden the shareholder base of Philippine companies through individual ownership, to help inform, motivate, and educate the public on the benefits of savings and investments, to provide an above average return on investment consistent with prudent measurements of risk, and to serve as an institutional model of professionalism, trust and confidence.

Given the benefits the Kabuhayan Fund brings to the country and to the investors, it is destined to grow as the Fund flexes its muscles. It is raring to prove its worth to the investor and to the nation.

The future is bright for mutual funds as a long term investment in the Philippines. For Filipinos living abroad, this investment is enhanced further by the recent favorable peso exchange rate for foreign currencies. I therefore invite all U.P. alumni to visit our corporate office or money centers when they next come to Manila.

Best regards,

Toti Juan

For more details, you can write to The Mutual Fund Management Company of the Philippines, Inc. 6th Floor, The Peak Bldg., 107 Alfaro St., Salcedo Village, Makati City, Philippines, call (632)848-2610, visit the Kabuhayan Fund's website or e-mail.

Francisco "Toti" Juan is a member of the Board of Trustees of Friends of the University of the Philippines Foundation in America.

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