This is the second article in a two-part series on 2 new asset classes available locally.
You can read Part 1 by clicking here.
ETFs
Exchange-Traded Funds provide low-cost investment access to a wide range of asset types. In the Philippines, the first and still only ETF in the country is called the First Metro Exchange Traded Fund, or FMETF.
ETFs are basically mutual funds listed in the stock market. That being said, investing in ETFs already allow you to instantly diversify your investments. In the case of FMETF, you get to invest in the PSEi or the Philippine Stock Exchange Index. These are the Philippines’ blue chip stocks, or 30 of the most heavily-traded, liquid, stable and consistently dividend-paying stocks.
ETFs, by virtue of being listed in the stock exchange, also provide investors with the liberty to buy and sell shares at any given moment without minimum holding periods imposed by mutual fund companies.
And most importantly, ETFs are affordable. Imagine being able to invest in the Philippines’ best of the best for a fraction of the cost. Your P1,000 can easily buy you at least 10 shares of FMETF; that’s nothing compared to spending close to P800,000 if you opt to buy those blue chip stocks individually.
Advantages of investing in FMETF:
- You get 30 of the best stocks in the Philippines with just one ETF.
- It makes investing easy.
- It gives you the flexibility to trade.
- It allows you to invest without having to put up millions of pesos.
Common positives
REITs and ETFs are suitable for beginner investors, and young investors with a long time horizon. They are also professionally managed, so you outsource the decision-making, strategizing and trading to licensed fund managers.
Both are pooled investments that give instant diversification in income-generating real estate properties (REITs) and blue chip stocks (FMETF). They provide investors with passive income and are very affordable compared to buying blue chip stocks or real estate properties individually.
Further, REITs and ETFs are hybrid investment outlets. a REIT combines a mutual fund and real estate properties, while FMETF is a mutual fund, stock and index tracker. They are both firsts in the Philippines, are easy to buy and sell, and are available online.
Read Part 1 here.
