1. What is the ALFM Family of Funds?

The ALFM Family of Funds is the largest group of mutual funds in the Philippines, cornering about 50% of the entire market's Net Asset Value as of January 31, 2007. It is the only one that boasts of a true, multi-currency family of funds: ALFM Peso Bond Fund, ALFM Dollar Bond Fund, and ALFM Euro Bond Fund. All ALFM Funds are classified as bond funds that are invested in diversified portfolios composed mainly of high-grade fixed income investment instruments and securities.

2. What are the value-added features of the ALFM Family of Funds?

There are certain features common to all the three funds that make them appealing to investors.

1. Diversification at Low Cost– Each fund pools the monies of numerous investors to provide them with the immediate benefit of instant diversification and asset allocation without the high costs needed to create individual portfolios.
2. Fund Management Expertise – The funds are managed by professional fund managers. Under this arrangement, the investors are saved from the costly fees of management advisers and are relieved from the difficult and time-consuming task of research and analysis. 
3. Risk Management Strategy - To appropriately manage the Funds' risks, the ALFM Funds implement a risk-management policy based on the principles of Value-at-Risk (VAR). VAR is a measure of the portfolios' maximum potential loss. The ALFM Funds may employ risk management techniques to manage the volatility of returns, including the use of financial derivatives to hedge the portfolio against market and credit risks.
4. No Sales Load Feature – With the ALFM Family of Funds, the published returns are exactly what the investors will receive upon redemption.*
5. Monthly Fund Performance Reports - The Fund Managers send out monthly reports to investors to update them on the funds’ returns, portfolio composition as well as the fund manager’s market review and outlook.
6. Liquid Investment - The Funds can buy back or redeem your shares on any business day (up to 12:00 noon, Manila time) at the prevailing Net Asset Value per share of the particular Fund. This liquidity allows you to get your money when needed. However, redemptions made during the minimum holding period of 180 days are subject to an early redemption fee. Redemptions made after 180 days, even if done every day, are not subject to any charge.

*After the minimum holding period of 180 days.

A unique value-added feature is that of all mutual funds available in the market, only ALFM Peso Bond Fund gives FREE life insurance coverage, amounting to P200,000.00, to qualified individual investors.

3. How much do I need to invest in the ALFM Family of Funds?

The minimum initial contribution to invest in each ALFM Fund is:

4. Who are the Fund Managers of the ALFM Funds?

BPI Asset Management is the fund manager of ALFM Peso Bond Fund and is tasked to formulate and implement the investment strategy of the Fund. BPI Asset Management is the largest and most experienced asset manager in the country. As the fund manager, it chooses fixed-income securities which are best suited for the investment portfolio of ALFM Peso Bond Fund and it prudently balances the risk and return of the Fund’s investments in order to guard it against possible losses.

BPI Investment Management, Inc. (“BIMI”), a wholly-owned subsidiary of the Bank of the Philippine Islands, acts as the investment manager of ALFM Dollar Bond Fund.  Incorporated in 1974, BIMI is tasked to formulate and implement the investment strategy of the Fund, and to provide and render management and technical services to the Fund. As fund manager, it likewise ensures the proper maintenance of the Fund’s corporate books, the timely preparation of reports and compliance with applicable regulatory requirements inherent in open-end investment companies. 

BPI Asset Management, Inc. (“BAMI”), another subsidiary of the Bank of the Philippine Islands, serves as the fund manager of ALFM Euro Bond Fund. BAMI is tasked to formulate and implement the investment strategy of the Fund as well as to provide and render management and technical services to the Fund.  BAMI follows the tradition of its parent company of over 150 years of financial management experience.

5. What is the investment objective of each ALFM fund?

ALFM Peso Bond Fund’s primary investment objective is to generate a steady stream of fixed income through investments in a diversified portfolio composed of Peso-denominated high-grade investment instruments and securities.

ALFM Dollar Bond Fund is an open-end, growth–oriented mutual fund denominated in US currency. Its investment objective is to provide a consistent flow of earnings by investing in a diversified portfolio of fixed income instruments issued by foreign and local entities.

ALFM Euro Bond Fund is an open-end, growth–oriented mutual fund denominated in the Euro currency. Its investment objective is capital preservation with returns and inflows derived out of investments in primarily foreign currency denominated investment instruments which can provide the Fund with a steady stream of fixed income.

6. What is the investment policy being followed by the ALFM Family of Funds?

In line with the above-stated objectives, the Funds follow a general investment policy of maintaining an optimal balance between maximizing long-term investment returns and minimizing investment risk by the proper allocation of assets among selected marketable securities and instruments depending on prevailing and anticipated market conditions.

7. What are the risks inherent to the ALFM Family of Funds?

Mutual fund investors are exposed to certain risks unique to open-end investment companies:

1. Mutual funds are subject to marked-to-market valuation of the underlying securities held in their portfolios. Some of the Funds' investments are valued on a day-to-day basis and are subject to changes in market price. Though not affecting the maturity value of these securities, highly abnormal liquidity needs might force the Funds to sell these securities before maturity thus, realizing either a market gain or loss depending on prevailing financial market conditions.
2. Since mutual funds invest in fixed-income securities issued by sovereign and corporate entities, investors also face credit risk. It is the risk that an issuer of a fixed-income security held by the Fund(s) may default on its obligation to pay interest and repay principal. Issuers of fixed-income securities are rated by international credit rating agencies. Generally, lower rated issuers have higher credit risks.
3. Investors also face the risk that actively managed mutual funds' investment managers will not effectively implement the funds' investment strategy resulting in the failure to meet stated objectives.
4. Investments denominated in foreign currency, as in the case of the ALFM Dollar Bond Fund and the ALFM Euro Bond Fund, are also subject to foreign exchange risks due to exchange rate fluctuations between base currency of the Fund and other currencies. Fluctuations in the base currency can greatly affect the value of the fund even if placed in fixed income instruments.
5. Investors in the Funds are exposed to the risk of dilution, since other investors are allowed to purchase additional shares anytime.
6. Investors in open-end funds are exposed to the risk of increasing their percentage of shareholdings in the Funds, even without purchasing more shares, since investors may sell their entire holdings anytime.
7. Unlike closed-end funds, the investment potential and capability of the Funds are limited by liquidity constraints as the fund managers should always ensure that there are sufficient liquid assets to service withdrawals at any given time. This is especially true for funds operating in multiple markets, as in the case of the ALFM Funds. The closure, suspension, or volatility in any one of these markets may pose potential problems for the liquidity position of the respective funds.
8. Mutual funds are not insured with the Philippine Deposit Insurance Corporation (“PDIC”). Mutual funds are not guaranteed by the fund managers. Past performance is not indicative of future results.

8. Who may invest in the ALFM Family of Funds?

Any individual, company, or association may invest in the ALFM Family of Funds.

9. How do I invest in the ALFM Family of Funds?

You may invest in any of the ALFM Funds by opening an Investment Fund Account with any of the qualified mutual fund advisors of BPI Capital Corporation, BPI Investment Management, Inc., or BPI Securities Corporation. You may also open an Account* by logging on to www.bpitrade.com.ph and clicking Apply Now. Then, follow the directions in the application form.

*At present, only ALFM Peso Bond Fund is available in BPI Trade.

10. What does an ALFM Family of Funds share represent?

It represents your pro-rated share of undivided ownership in the particular Fund of the ALFM Family. This means that you own a share of all the investments in the specific Fund rather than a specific security investment of that particular Fund.

11. How are the Family of Funds valued?

The ALFM Family of Funds has adopted the revised International Accounting Standards (IAS) and the new International Financial Reporting Standards (IFRS). The newly adopted accounting rules require marked-to-market valuation of the assets/investments of a mutual fund company. With this type of valuation, the net asset value changes daily, depending on the fair market value of assets at the close of day.

ALFM Peso Bond Fund adopted the IAS and IFRS effective October 1, 2005.  The ALFM Dollar Bond Fund implemented the said accounting standard on March 1, 2005 while ALFM Euro Bond Fund followed the same accounting principles since its inception on July 5, 2005.

For more information on the IAS Valuation and its effect in the value of the ALFM funds, click IAS FAQ.

12. How is the Selling Price per unit determined?

This is based on the Net Asset Value per share ("NAV per share") of the Fund. The NAV per share is computed by dividing the Net Asset Value of the Fund (Total Assets less Total Liabilities) by the total number of outstanding shares in the Fund.

13. How do I compute for the unrealized earnings from my investment in the ALFM Family of Funds?

Your earnings are based on the number of shares you own in the Fund. Simply subtract your cost per share from the NAV per share for the current day, multiply this amount by the number of shares you own, and the amount arrived at represents your unrealized earnings. Under the law (R.A. 8424), gains realized from the sale of mutual fund shares are tax-exempt.

14. How do I compute my return on investment ("ROI")?

You may compute your ROI by the following formula, where BP = Buying Price of the Fund on the day that you compute the ROI; and SP = Selling Price on the day that you invested in the Fund:

The ROI computed using the formula above is an absolute return during your particular holding period.

The Buying and Selling Prices of the ALFM Family of Funds are available daily in this website.

15. How do I purchase additional shares of ALFM Family of Funds?

Investors may purchase additional shares of his/her particular ALFM Fund, subject to the minimum additional contribution, as follows:

16. How do I withdraw from the ALFM Family of Funds?

You may withdraw from your investment anytime during trading hours (8:30 a.m. to 12:00 noon, Manila time) by contacting your ALFM mutual fund advisors, if the account was opened through him/her, or by logging on to www.bpitrade.com.ph, if the account was opened via the Internet.

The minimum redemption amounts are the same as in the table above.

17. What is the evidence of my investment in any of the ALFM Family of Funds?

For every investment you make, you will be issued a Depositary Receipt showing the number of shares you have purchased in the particular ALFM Fund. The number of shares you buy is determined by dividing the amount of your investment by the Fund's applicable Selling Price per share for the day.

18. What do you mean by "Buying Price" and "Selling Price"?

These prices are from the point of view of the Fund. If you are investing in a Fund, and each time you make additional investments in the Fund, you are actually buying shares of the Fund. Thus, the Fund's Selling Price is used. Conversely, if you are withdrawing from a Fund, you are actually selling shares, and the Fund is buying your shares. Thus, the Fund's Buying Price is used.

19. Will I receive any report on my investments?

Yes. The Depositary Receipt will be mailed or delivered to your registered address. Secondly, a Quarterly Statement of Account indicating your outstanding investments in the Fund and detailing all of your transactions in the particular Fund during the quarter will be mailed or delivered to your registered address. And to help you evaluate your investment, a Monthly Fund Performance Report prepared by Fund Manager will be mailed or delivered to your registered address.

20. Does the ALFM Family of Funds guarantee my principal and income?

No. The ALFM Family of Funds, just like any other mutual fund, does not carry any guarantee of income or principal, and is not covered by the Philippine Deposit Insurance Corporation. ALFM Funds are not deposit products and, as such, yields are not guaranteed. Past investment performance is not an indication of future results.