Bright prospects for the market see insurer launch new fund that will offer investment opportunities
2015 was a tough year for the Asian markets, but that hasn’t stopped one of Canada’s leading insurance giants from putting its faith in the Philippines.
Sun Life of Canada has launched a fund in the country that will track its main stock barometer while also giving investors an opportunity to place stakes in local equities with attractive valuations. Known as Index Fund, it will take the form of a variable unit-linked fund that will invest in stocks that track the Philippine Stock Exchange Index – therefore targeting clients that have a high level of risk tolerance and are looking for long-term financial protection.
However, why should Canadians be interested in the Philippines?
According to Sun Life chief investment officer Michael Enriquez, the appeal of the Philippines lies in its domestic economic story. Being a unique economy in export-driven Southeast Asia, the Philippines stands alone in that its strong five per cent average growth for the past decade has been driven by domestic consumption, which accounts for easily 65 per cent of the demand-side. The country also boasts of a healthy service sector which has grown six per cent in the same period and accounts for 55 per cent of the business sector.
“The Philippines, like all other Asian countries, imports its petroleum needs,” he said. “We import 85 per cent of our oil from the Persian Gulf and 80 per cent of it is sourced from one country, Saudi Arabia. Hence the need to diversify its oil sources for more stable areas like Canada is an opportunity.
“The high level of English-speaking population is also of benefit to Canadians as is the level of doing business: which has had a long history with their southern neighbour, the United States.”
In terms of relative valuation, 2015 was a very tough year for Asian markets which saw major economies with falling currencies and bombed out equity indices. The Philippines was relatively less affected, only declining 8.3 per cent in 2015 while larger economies in the region fell in double digits.
Sun Life of Canada has launched a fund in the country that will track its main stock barometer while also giving investors an opportunity to place stakes in local equities with attractive valuations. Known as Index Fund, it will take the form of a variable unit-linked fund that will invest in stocks that track the Philippine Stock Exchange Index – therefore targeting clients that have a high level of risk tolerance and are looking for long-term financial protection.
However, why should Canadians be interested in the Philippines?
According to Sun Life chief investment officer Michael Enriquez, the appeal of the Philippines lies in its domestic economic story. Being a unique economy in export-driven Southeast Asia, the Philippines stands alone in that its strong five per cent average growth for the past decade has been driven by domestic consumption, which accounts for easily 65 per cent of the demand-side. The country also boasts of a healthy service sector which has grown six per cent in the same period and accounts for 55 per cent of the business sector.
“The Philippines, like all other Asian countries, imports its petroleum needs,” he said. “We import 85 per cent of our oil from the Persian Gulf and 80 per cent of it is sourced from one country, Saudi Arabia. Hence the need to diversify its oil sources for more stable areas like Canada is an opportunity.
“The high level of English-speaking population is also of benefit to Canadians as is the level of doing business: which has had a long history with their southern neighbour, the United States.”
In terms of relative valuation, 2015 was a very tough year for Asian markets which saw major economies with falling currencies and bombed out equity indices. The Philippines was relatively less affected, only declining 8.3 per cent in 2015 while larger economies in the region fell in double digits.
