MANILA, Philippines – The Philippine Stock Exchange (PSE) has launched an information campaign on exchange traded funds (ETFs), a form of investment funds to be introduced in the local market.
“Now that the Philippine regulatory framework for ETFs has been finalized, we can officially start accepting listing applications from prospective ETF companies. I know a lot of market participants have waited long for this product to be offered to investors and we are now all working hard to ensure that we meet the expectations of the market,” PSE President and Chief Operating Officer Hans B. Sicat said.
The Securities and Exchange Commission approved last June 20 Part C of the PSE ETF rules after Parts A and B were approved last March. The local bourse then proceeded to conduct seminars to make the public aware of how ETFs work.
An ETF is similar to a mutual fund that tracks a basket of assets but is traded like stocks. Unlike mutual funds, however, the price of an ETF is quoted real time so investors immediately know the buying and selling price of their shares.
“For retail investors, especially those who are just starting to invest in the market, ETFs allow for a cheaper access to a diversified portfolio of stocks because investors do not have to buy multiple stocks,” the local bourse said.
PSE added that the performance of an ETF is also easier to analyze and monitor because its asset per share value is updated every minute and its tracking error is disclosed at the end of the trading day.
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The next seminar for investors is on July 19 to be held at the PSE Ayala. PSE has also organized the “Philippine ETF Investment Convention” to be held at the Hotel Intercontinental in Makati City on July 30. Foreign ETF experts have been invited to speak and share their ETF experience as well as the best practices in other jurisdictions. The event is held in partnership with Singapore-based events firm The Pinnacle Group, the local bourse said.
“The next critical step in our ETF program is to educate the public of what ETFs are all about. ETFs provide many advantages to investors and it is for this reason why it has remained to be one of the fastest growing asset classes globally,” Sicat said.