Last March 30, 2011, Bank of the Philippine Islands (BPI) completed the acquisition of Odyssey Funds from ING Bank. As part of the acquisition, Odyssey Funds will now become part of the BPI Asset Management Group.
Before acquisition, these funds are record holders in the whole portfolio of Unit Investment Trust Fund (UITF) products offered by banks in terms of returns. They registered one of the highest yields as compared to others. However, availability back then is limited as it requires a huge amount of initial capital to be able to start investing in these funds. As far as I remember, they are requiring a minimum of Php 5 million back then. With BPI’s acquisition, these funds will be made affordable even to small time investors.
Currently, Odyssey Funds are not yet available in all BPI branches nationwide. They are only available to distribution agents such as Citibank and HSBC. However, instead of the lower initial capital, these agents require a much larger initial capital that may not be affordable for some investors. For Citibank, I have inquired that they are requiring a minimum initial investment of Php 100,000 for all peso-denominated Odyssey Funds and USD 2,000 for all dollar-denominated.
However, the long wait maybe over. I recently talked to a person from BPI Asset Management and Trust Group handling the Odyssey Funds and she said that they are targeting last week of August (which is next week) or first week of September as the official launching of the fund in all BPI branches. When launched, the following minimum initial investment, minimum additional investment, holding period, and entry fees will be implemented:
Minimum Initial Investment Requirement:
- All peso-denominated Odyssey Funds have minimum initial investment requirement of P10,000
- All dollar-denominated Odyssey Funds have minimum initial investment requirement of USD 1,000 EXCEPT
- Odyssey Asia Pacific High Dividend Equity Fund which has an initial investment requirement of USD 5,000
Minimum Additional Investment Requirement:
- All peso-denominated Odyssey Funds have minimum initial investment requirement of P5,000
- All dollar-denominated Odyssey Funds have minimum initial investment requirement of USD 100 EXCEPT
- Odyssey Asia Pacific High Dividend Equity Fund which has an initial investment requirement of USD 1,000
Minimum Holding Periods:
- All Money Market and Fixed Income PESO-denomiated funds have minimum holding period of 5 days
- All Balanced and Equity PESO-denominated funds have minimum holding period of 15 days
- All USD-denomiated funds have minimum holding period of 20 days
Front-End Loads (Entry Fees)
- All Money Market Funds have 0.25% entry fees
- All Fixed Income (Bond) Funds have 1.00% entry fees
- All Balanced and Equity Funds have 1.50% entry fees
- In the list above, Peso Cash Management Fund is a Money Market Fund. The next 4 are Bond Funds. The next two are Balanced Funds while the last three are Equity Funds. To know more the difference between these types of funds, you can read my article on mutual funds vs UITFs.
- Your investment is subject to a 1.00% early redemption fee if redeemed within the holding period stated above in days.
- Odyssey Funds Pros: Ability to be able to invest in a high yield investment with a minimum capital and with a minimum holding period as compared to other UITF products offered by banks.
- Odyssey Funds Cons: Each time an investor subscribes to a particular fund, his investment will be charged upfront with the entry fee as stipulated above per fund.
Moreover, the ideal level of income before redemption should be at least higher than our country’s inflation rate plus the entry fee. That’s how we should fight inflation which degrades the value of our money in terms of its purchasing power.
Below are the Year-to-Date (YTD) and annualized returns of Odyssey Funds:
From the table of returns above, the Odyssey Philippine High Conviction Equity Fund will surely be the top choice of investors looking for capital appreciation. I will update this article when Odyssey Funds will become available in all BPI branches nationwide. Hopefully, that would be next week. For sure, I will be one of their early investors.
UPDATE as of September 15, 2011: All Odyssey Funds are now available at all BPI branches nationwide! You can also invest through BPI Express Online!
UPDATE as of September 19, 2011: I opened a BPI Odyssey Philippine High Conviction Equity Fund last Friday, September 16, 2011. Since I placed it after their cut-off time which is 11:30am, the NAVPU used in buying my initial investment was for the next banking day which is Monday, September 19, 2011. The 1.5% entry fee will be deducted separately from your settlement account.
For example, if you decided to invest the P10,000 minimum initial investment, the whole P10,000 will be used in buying the NAVPU. The P150 entry fee will be deducted separately from your settlement account.
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