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BDO Trust and Investments Group

UITF Weekly Update


For the week ending November 11, 2014
*BDO Trust is pleased to inform you that the BDO UITF Weekly Update is now available in the BDO website (www.bdo.com.ph) via the Trust and Investments link

UITF PERFORMANCE SUMMARY as of November 11, 2014


UITF

Short Name

NAV per
unit

1-Week
Change

1-Month
Change

YTD
Change

YoY
Change

3-Year
Change

5-Year
Change

CAGR
Since
Inception*

PESO FUNDS
PMMF

1,469.39

0.02%

0.11%

0.93%

1.07%

6.36%

13.83%

4.09%

BDO Peso Bond Fund

PBF

1,833.35

0.01%

0.45%

1.84%

2.05%

13.87%

30.50%

6.51%

BDO GS Fund

GS

185.07

-0.26%

0.23%

0.57%

-0.24%

16.19%

36.68%

6.68%

BDO Peso Money Market Fund

BDO Peso Fixed Income Fund

PFIF

1,904.26

-0.16%

0.61%

1.20%

1.02%

16.36%

37.35%

6.99%

BDO Peso Balanced Fund

PBAL

3,997.20

-0.87%

0.43%

16.07%

9.66%

43.35%

106.27%

12.98%

EQUITY

440.36

-0.36%

0.86%

22.01%

15.41%

70.20%

156.02%

16.85%

BDO Sustainable Dividend Fund

SDF

121.87

-1.25%

1.00%

23.52%

21.97%

#N/A

#N/A

20.43%

BDO Focused Equity Fund

FEF

116.42

-1.02%

0.31%

18.66%

16.57%

#N/A

#N/A

15.36%

DMMF

134.20

0.03%

0.12%

1.09%

1.25%

5.05%

9.07%

3.13%

DBF

156.99

0.13%

0.54%

2.51%

2.49%

6.84%

15.87%

4.84%

1.74

0.07%

0.72%

3.82%

3.61%

9.86%

24.32%

6.01%
2.36%

BDO Equity Fund

DOLLAR FUNDS
BDO Dollar Money Market Fund
BDO Dollar Bond Fund
BDO Medium Term Dollar Bond Fund

MTDBF

INSTITUTIONAL FUNDS
BDO Institutional Cash Reserve Fund

ICRF

107.08

0.03%

0.15%

1.33%

1.53%

#N/A

#N/A

BDO Merit Fund - Short Term Portfolio

MFST

151.84

-0.07%

0.21%

1.76%

1.93%

13.26%

28.73%

4.81%

BDO Merit Fund - Medium Term Portfolio

MFMT

141.40

-0.06%

0.44%

3.24%

2.66%

20.19%

#N/A

7.95%

BDO Institutional Fixed Income Fund

IFIF

1,874.24

-0.46%

0.54%

4.35%

1.16%

27.65%

61.86%

8.52%

BDO Institutional Equity Fund

IEF

4,770.94

-0.29%

1.08%

22.63%

16.00%

73.03%

158.51%

18.07%

*Compounded Annual Growth Rate (CAGR) since inception allows for UITF comparison regardless of inception dates.

UITF PORTFOLIO as of November 11, 2014


UITF
BDO Peso Money Market Fund
BDO Peso Bond Fund
BDO GS Fund
BDO Peso Fixed Income Fund
BDO Dollar Money Market Fund
BDO Dollar Bond Fund
BDO Medium Term Dollar Bond Fund
BDO Institutional Cash Reserve Fund
BDO Merit Fund - Short Term Portfolio
BDO Merit Fund - Medium Term Portfolio
BDO Institutional Fixed Income Fund
BDO Peso Balanced Fund
BDO Equity Fund
BDO Sustainable Dividend Fund
BDO Focused Equity Fund
BDO Institutional Equity Fund

Short-term
Placements

Government
Securities

Corporate
Securities

Weighted
Average
Duration

Weighted
Average
Yield

Equities

100.00%
31.57%
32.15%
25.90%
98.34%
53.60%
35.56%
100.00%
42.11%
34.92%
25.57%
20.94%
3.29%
10.06%
12.56%
3.77%

0.00%
37.68%
67.85%
43.97%
0.00%
33.07%
51.82%
0.00%
40.85%
33.99%
74.43%
2.89%
0.00%
0.00%
0.00%
0.00%

0.00%
30.74%
0.00%
30.14%
1.66%
0.00%
12.61%
0.00%
17.03%
31.09%
0.00%
2.11%
0.00%
0.00%
0.00%
0.00%

0.10
2.81
3.44
3.61
0.02
2.65
4.61
0.07
1.12
3.01
5.65
N/A
N/A
N/A
N/A
N/A

1.29%
2.10%
1.52%
2.19%
1.20%
1.75%
1.88%
1.79%
1.92%
2.90%
3.18%
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
74.06%
96.71%
89.94%
87.44%
96.23%

IMPORTANT EVENTS
Major Economic Data for the Month
USA

Philippines

MARKET SUMMARY & OUTLOOK


Peso Bonds Interest
Rates

ROP Bonds Interest


Rates

P-US$ Exchange Rate


(in numerical value)

Short Term Outlook (1 - 2 Wks)

US Stock Market

Phil. Stock Market

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currently b

Long Term Outlook (6Mos - 1Yr)

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currently b

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currently b

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cannot
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DOLLAR BOND MARKET

ROP Sovereign Bonds


Yield Curve

5.00%
4.00%
3.00%

11-Nov-14
4-Nov-14

2.00%
1.00%

ROP 37

ROP 34

ROP 32

ROP 30

ROP 26

ROP 24

ROP 21

ROP 20

ROP 19

ROP 17

ROP 16

ROP 15

0.00%

The US held its mid-term elections this week and President Obamas
current unpopularity among Americans benefited the Republican Party
which now controls both Congress and Senate. This will be crucial for the
remaining two years of the Obama administration to be able to pass
policies and reforms, especially with the recurring debt ceiling issue at
stake again next year. The US jobs data release was also a closelywatched space this week. Despite coming in shy of expectations, the
214,000 (vs consensus of 235,000) non-farm payrolls added in October
marked the ninth consecutive month that the US economy added at least
200,000 workers to its active workforce, the longest stretch since 1994.
Consequently, the unemployment rate inched lower to 5.8% from 5.9% in
September, bringing it closer to the 5.5% norm. The notion of improving
labor market conditions in the US may thus support an earlier Fed rate
hike which is mostly expected to happen by middle of next year.
However, inflation remains low (1.4% in September) and well below the
Feds long-term target of 2.0% while other major central banks such as
the European Central Bank, the Bank of Japan, and the Peoples Bank of
China are still on monetary easing mode. The latter may justify the US
Fed to delay the first rate hike and thus mitigate the anticipated rise
in ROP yields which currently remain hostage to US Treasury yield
movement.
PESO BOND MARKET

Philippine Benchmark Treasuries


Yield Curve

Lower food and fuel prices eased inflation to 4.3% in October from
Septembers 4.4%, broadly in-line with market expectations. This,
plus the deceleration of money supply or M3 growth to 16.2% in
September from 18.5% the previous month, gives the BSP more
leeway to hold off any further monetary tightening measures until at
least the first quarter of 2015 during which the issue will already be
preparing ahead of possible Fed rate hikes. However, should
external factors such as the improving labor market conditions
in the US renew sentiment/talks of an earlier Fed rate hike, they
may result in a gradual upward movement in peso long-tenor
bond yields. Still, we take the view that rates especially of these
long tenors should hold in their sideways trend for the near term.

9.00%
8.00%
7.00%
6.00%
5.00%

11-Nov-14

4-Nov-14

4.00%
3.00%
2.00%
1.00%
25YR

20YR

10YR

7YR

5YR

4YR

3YR

2YR

1YR

6MO

3MO

1MO

0.00%

STOCK MARKET

PSE Index

1/1/2013
2/1/2013
3/1/2013
4/1/2013
5/1/2013
6/1/2013
7/1/2013
8/1/2013
9/1/2013
10/1/2013
11/1/2013
12/1/2013
1/1/2014
2/1/2014
3/1/2014
4/1/2014
5/1/2014
6/1/2014
7/1/2014
8/1/2014
9/1/2014
10/1/2014
11/1/2014

7,750
7,500
7,250
7,000
6,750
6,500
6,250
6,000
5,750
5,500
5,250
5,000
4,750
4,500
4,250
4,000
3,750
3,500

Dec 2013 Close: 5889.83

Nov 11, 2014 Close: 7204.55

2013 Change: 1.33%

YTD Change: 22.32 %

Global equity markets benefited from good corporate earnings results in the
US this week, reflective of a sustained recovery in the US and improved
export prospects from the global economies. Aside from the strengthening
US dollar, US equity markets reached new highs this week as majority of
companies reported better-than-expected earnings for the third quarter.
Similarly, European equities followed the uptrend from the earnings results
but renewed concerns on the overall health of the Eurozone economy put a
downbeat tone later during the week. On the domestic front, local
companies reported generally in-line earnings for the quarter but with a few
surprises. Most notable was that of PLDT that reported lower earnings due
to stiffer competition and indicated a downward revision of its earnings
guidance moving forward, thus bringing into question the sustainability of its
high dividend payout. There was also disappointment with the upcoming
MSCI rebalancing as anticipation of additional weightings for Philippine
names such as GT Capital and Bloomberry Resorts did not materialize.
Both of these developments greatly dampened investor sentiment and
weighed down the index. We thus expect the market to continue
consolidating around the 7,200 level due to the lack of any major catalyst.
However, we still expect a year-end rally towards at least 7,300 as
positioning for next year recommences in the remaining weeks of 2014
given that the Philippine market has one of the highest expected
earnings growths in the region in 2015 at 15%.

DISCLAIMER: The views expressed in this Update by BDO-Trust are strictly for information purposes only. The BDO UITFs are not deposit accounts but trust products and are not guaranteed nor insured by BDO, its affiliates or subsidiaries. Investment or participation
in the BDO UITFs are subject to risk and possible losses of principal. The value of the investments can go up or down and, upon redemption, may be worth more or worth less than the original amount invested. BDO-Trust is not liable for such losses which are for the
sole account of the participant/trustor. Participations in the BDO UITFs do not guarantee a rate of return and are not insured by the Philippine Deposit Insurance Corporation (PDIC). Thus it is important that the investor always considers if these Funds are aligned with
his financial goals, investment horizon and risk appetite. The UITFs are charged for custodianship fees, financial services providers' fees, and third-party audit fees whose sum total does not exceed 0.10% of the fund volumes. For more information, kindly call the
undersigned members of the BDO Trust Research and Investments Group.

BANCO DE ORO TRUST AND INVESTMENTS GROUP

Anthony E. C. De Dios
Anna Patricia C. San Diego

dedios.anthony@bdo.com.ph
sandiego.patricia@bdo.com.ph

840-7000 Ext.33136
840-7000 Ext.31347