Mutual Fund Investing with COL Fund Source in Layman’s Term

We’ve all used to know that COL Financial is the leading, and quite frankly, the most famous online stock broker here in the Philippines. I’ve also tried investing in the Philippine Stock Market (PSE) with COL Financial, and so far, I’m quite satisfied with their ease of use and streamlined services as I’ve written in my blog post here. But all that changes because just as recent as last year, COL Financial announced COL Fund Source where the company started offering Mutual Funds to its clients as a way of allowing their clients to diversify investments without having to resort to opening Mutual Fund (MF) accounts with other companies, making them the nation’s first Mutual Fund Supermarket, where investing in stocks and various MFs is made easy with only just one centralized investment account. It is a great move by COL to keep their clients’ assets, I must say.

I’m writing this article because I am kinda the curious cat here: Why COL Fund Source, and what sets them apart from other MF investment houses? How has their performance been, and have they lived up to the expectations of their clients since its inception? And also…

What are Mutual Funds, anyway?

For those who are unfamiliar on how Mutual Fund works, these are pooled funds from investors (like you & me) which are deposited to and managed by the investment company you choose to deal with. The investment bank/company then assigns an experienced Fund Manager who will use his/her expertise in investments and trading to invest the pooled funds in a diverse range of assets like bonds, equities, and securities (often referred to as ‘portfolio’), and manage the fund to ensure maximized returns to the investor. This is highly beneficial to the average investor since all the trading and headaches will be on the hands of the Fund Manager – no action required from the investor except the occasional monitoring of how the fund is doing. Note that Mutual Funds are not exclusively offered by COL Fund Source; there are also other reputable companies out there where you can invest in MF like BDO and BPI.

COL Fund Source Advantages

The advantages as advertised by COL Fund Source.

Why invest with COL Fund Source?

  1. No upfront fees – Unlike other Mutual Fund investment firms, your deposited money (for example, the minimum investment of P5,000) will still be 5K – no upfront fees will be deducted to your investment. This is the COL Financial promise, and is one of the main come-on feature of this program.
  2. Convenience

– COL Fund Source has an Automated Investment Facility which allows for the investor to fund a fixed amount on a regular basis which is auto-deducted from the investors chosen source account.

– Instead of having to open individual accounts and sign endless forms with each investment firm, you can do so in COL financial using just one account (Your COL Financial Acct).
– Different mutual fund investments types and programs to choose from. COL Fund source even made it more convenient by partnering with six big fund houses in the Philippines:

BPI ALFM Mutual Funds (Ayala Life Fixed income Mutual fund)
ATR KimEng Asset Management (ATRAM/ATRKE)
Philam Asset Management
Philequity Management, Inc.
Sun Life Asset Management
First Metro Asset Management (FAMI-Metrobank Group)

– To make things easier, COL Fund Source has a fund rating system that will give insight to each of the funds’ historical performances, risk metrics, and track record, helping clients select funds through a risk rating system.

How’s the performance of the funds available through COL Fund Source?

Since COL Fund Source has 24 different Mutual Funds from 6 different Mutual Fund houses, I will not be able to asses in one single blog post the performances of each of the MF types that are available to COL Fund Source clients. However, I will show you how to do your own comparison below.
– To serve as a general view of what COL Fund Source MF types has to offer, I picked 4 sample MFs and compared them against my current MF investment (BDO Equity Fund). – – To avoid biases in the comparison, we’ll be using Bloomberg Quote tool which allows to compare the historical performances of different MFs. For those who wish to do some comparison of their own, just enter all the MF names you wish to check and compare in the ‘Add Comparison’ box and choose the time period that you wish to compare.

Mutual Fund Comparison Philippines

Which Mutual Fund had the highest gain over the 5-year period?

Looking at above comparison chart of the historical performances of sample MFs over a 5-year period, there are some MFs which are obviously lagging behind. The top two highest performing MFs as per above chart are Philequity Fund, which is slightly higher than BDO Equity Fund which I have an active investment in. Turns out, my current investment wasn’t that bad after all when compared with other MFs with COL Fund Source.

My take on this topic

It’s a good move by COL Financial to create COL Fund Source to help those who wish to diversify their assets but would like to be spared from the hassles of having to create multiple accounts with different companies. COL Fund Source sure does have the bragging rights when it comes to the convenience part where you can invest on multiple mutual funds with different companies with just a single COL account. However, also note that there are other high-performing mutual funds from other sources such as BDO and BPI which you cannot invest in from your COL account (since BDO and BPI are not available as an investment option in COL Fund Source). Also, the ‘no upfront fee’ and the ‘Automated Investment Facility’ benefits are not exclusive to COL Fund Source.

Now that you know which Philippine fund houses you can invest in with COL Financial, try comparing the past performances using the Bloomberg Quote tool to help you decide which company to sign up with and what Mutual Fund to invest on. As they always say, the past performance is always a good indicator of future performance.

***This my sole opinion based on the facts presented by COL Financial and the past performances of the Mutual Funds, and also based on my experiences investing in MFs. You may contact COL Fund Source directly if you have questions, or you may view their seminar schedule if you wish to attend and know more about COL Fund Source.

Stay rich,

FRUSTRATEDBILLIONAIRE

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