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To diversify its investments and raise more funds, the Social Security System invested P3 billion in three local mutual funds, the state-run pension fund said yesterday.
The SSS will also tap nine domestic fund managers that will manage P1 billion each, it said in a statement.
From June 27 to July 4, the SSS had poured P1 billion each into the following mutual funds: Philequity Fund Inc. (managed by Philequity Management Inc.); Philippine Stock Index Fund Corp. (managed by BPI Investment Management Inc.) and Sun Life of Canada Prosperity Balanced Fund Inc. (managed by Sun Life Asset Management Co. Inc.), president and chief executive Emmanuel F. Dooc said.
The amount came from the SSS’s investment reserve fund (IRF).
“This is the first time in 61 years that the pension fund invested in mutual funds. The deployment of P3 billion in the domestic mutual funds, although modest in size relative to the SSS’ size of about P500 billion, is a significant first step in partnering with top local managers and has a lot of potential benefits,” he said.
“This is a big step for the SSS. This is a part of broadening its market intelligence sources, discovering best practices and learning new investing styles that may be highly suitable to the SSS. The competition brought about by performance-focused fund managers should result in improved total returns of the SSS’ funds,” Dooc added.
On Thursday, the Social Security Commission approved the accreditation of the three mutual fund managers, even as the commission already green-lighted the release of P3 billion in six instalments on June 20, the SSS said.
“The deployment is also a statement of confidence in the Philippine financial market. While the capital markets may be in their usual third quarter weakness brought about by inflation concerns and global trade war, and the longer-term view of at least two years, the SSS is confident that its deployment in the three mutual funds will be rewarding,” according to Dooc.
Republic Act No. 8282 or the Social Security Act of 1997 allows the SSS to invest reserve funds “in domestic or foreign mutual funds in existence for at least three years, provided such investments shall not exceed 20 percent of the IRF.”
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