The Philippine market saw the rise of Real Estate Investment Trusts (REITs) in the past few years.
Almost all of the top real estate companies in the country have already launched their own REIT because investors see them as an alternative to fixed income instruments and a good source of passive income.
If you’re not familiar with REITs, then here’s a Beginner’s Guide to Investing in REITs that you can read.
But today, I’m excited to share that there’s now a mutual fund that primarily invests in REITs, which now allows you to diversify and invest in several REITs all at once.
Learn more about the ALFM Real Estate Income Fund or ALFM REIF below.
Press Release
The Bank of the Philippine Islands (BPI), through its wholly-owned subsidiary BPI Investment Management, Inc. (BIMI), will be launching the first of its kind mutual fund in the country that focuses on real estate, the ALFM Real Estate Income Fund or ALFM REIF, by mid-August 2022.
The peso-dominated equity mutual fund is authorized to offer up to 100 billion units of participation to the public with an initial net asset value of Php 10 per unit.
It aims to provide a stable stream of dividends and generate long-term capital growth by investing in equity securities, predominantly real estate investment trusts (REITs) issued locally and abroad as well as other collective investment schemes with the same investment objectives. It is ideal for aggressive investors with an investment horizon of more than five years
“Diversifying into real estate, both through REITs and real estate-linked securities, is a good hedge against inflation, especially with inflation driven by the current market conditions,” said BIMI President Martin Enrile.
For as low as a PHP 5,000-minimum initial investment and maintaining balance via BPI Branches, the fund enables investors to invest in the growing real estate sector and earn dividend income, on top of capital appreciation.
Interested investors may subscribe through BPI or accredited agents and distributors. To learn more about the fund, visit the ALFM Mutual Funds website: www.alfmmutualfunds.com
BIMI is one of the Philippines’ largest managers of mutual funds with PhP 218 billion assets under management as of June 30, 2022, approximately 50% of the industry.
ALFM Real Estate Income Fund Facts
The Fund aims to provide a stable stream of dividends and generate long-term capital growth by investing predominantly in Real Estate Investment Trusts (REITs) and/or real estate-linked securities both locally and globally.
Base currency Philippine Peso Risk classification Aggressive Min. initial investment and maintaining balance PHP 50 Min. transaction amount PHP 50 Management fee 1.25% p.a. Min. holding period 180 days Early redemption fee 1.00% Distribution Quarterly
Why invest in ALFM REIF?
Real Estate Industry Growth
Maximize your investment portfolio by diversifying into the Real Estate Industry
Local and Global Exposure
Through your accredited mutual fund distributor/broker, you may invest in local and global Real Estate linked Assets.
Regular Dividends
The fund aims to deliver consistent quarterly dividend income. Note: Dividend payment is not guaranteed and is not indicative of the return of the Fund which may pay dividends from the capital.
Affordable
For as low as PHP 50, you can have access to a global portfolio that’s focused on Real Estate Investments.
Frequently Asked Questions
Is there a possibility that the fund won’t be able to payout?
Yes. There is a possibility but with a low probability.
Will the fund be investing in REITs only or will it include related Real Estate assets such as Property and Infrastructure names?
To maximize total return, the fund has the flexibility to invest in real-estate linked securities such as preferred or commons stocks as well as other collective investment schemes with the same investment objective.
What’s BINI’s outlook on REITS and the Real Estate market?
There will be more REIT listings in the Philippines and it is expected for REIT companies to continue growing bigger.
The real estate companies are incentivized to continue injecting more of their developments into the REIT vehicles because income from REITs is tax-free so that alone is motivation enough to ensure REIT earnings can continue to grow.
Real estate, in general, provides a good inflation hedge since property values do not go down. For accountants, you know there is no depreciation applied to land assets
Who can invest in the fund?
Interested investors may open an account and subscribe through accredited Mutual Funds Distributors / Advisors
Restrictions: U.S. Persons and U.S. Residents (regardless of citizenship/nationality) may not invest in the fund.
Provisions in the U.S. regulations require certain disclosures on investments made by U.S. Residents and/or U.S. Persons outside of the U.S.A. To manage any potential breach of reportorial requirements, we shall not allow the same.
How much is received?
Cash equivalent will be computed by: Income = Number of units held as of record date x Unit Dividend x NAVpU as of record date
How is income received?
Dividends will come in the form of additional units which will be auto-redeemed and credited as cash to the client’s settlement account.
Interested investors may subscribe through BPI or accredited agents and distributors. To learn more about the fund, visit the ALFM Mutual Funds website: www.alfmmutualfunds.com
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