Diversifying your portfolio with the same product…

July 3, 2012 | By Fitz | Filed in: Investing.

Just a random thought, can you say that you’re still diversifying your portfolio when you invest in different mutual fund companies / banks but the same product? For ex. MF company: Philequity, Product: Phileqiuty fund vs. MF Company: FAMI, Product: SALEF (Save and Learn Equity Fund)




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7 Responses to “Diversifying your portfolio with the same product…”

  1. Fitz says:
    July 3, 2012 at 6:45 pm

    Hi MondC, I believe yes. It’s a good way to diversify a specific risk profile in your portfolio. (low risk, moderate risk, high risk)

    But also, I think you should consider investing in products that have different risk profiles, aside from products with same risk profiles but with different institutions.

  2. ForsakenOne says:
    July 4, 2012 at 1:45 pm

    In your example I believe no.

    Technically yes, since those equity funds have different fnud managers and therefore likely have different stocks in their portfolio.

    But both are equity funds, and both most likely have PLDT in their portfolio, as well as other index stocks. there should be a list of their holdings, and if you can look at their product’s holding’s you can see for yourself how much overlap and how diversity there really is.

    They’ll perform diffrently, but in general, if the market is down, they’ll take a hit too. And if the market is up, they’ll get an uptick. Their differences will account for their variation in performance.

    The good thing about that though is that you get to see which funds really perform. Basically you’re guarding yourself against the risk of signing up with a lackluster fund – which isn’t bad at all, given that a good equity fund is your best weapon for wealth building.

  3. MondC says:
    July 5, 2012 at 5:14 pm

    Thanks Sir Fitz and ForsakenOne!

    Well i already have investment with 2 equity funds. I guess its time to invest with a different risk profile. Which brings me to my next question, is it wise to invest with a new fund or just do a cost averaging with my current investment?:)

  4. ForsakenOne says:
    July 6, 2012 at 10:03 pm

    Hi MondC,

    I think Fitz has answered a similar question before. I recall: If the fund is performing well you can top it off. If he performance is not impressive, you can subscribe to a new fund (and therefore compare, or just spread the risk).

    You can;t really go wrong with that. For myself, I have a BPI equity fund. But based on some info in another thread here, I’m now planning opening an equity fund with Metrobank too (First Metro).

    But since you mentioned “different risk profile”….

    Did you mean cost averaging your equity funds vs openign a bond fund or money market fund?

    If so… well, diversification is always advised. But how you diversify i think will be based on your investment goals…

  5. MondC says:
    July 7, 2012 at 2:21 pm

    Thanks ForsakenOne! Are you talking about FAMI’s SALEF product?

  6. ForsakenOne says:
    July 7, 2012 at 7:53 pm

    Yep, that’s the one…. unless they have more than one equity fund? I’m not too familiar with their products yet….

  7. nash says:
    July 24, 2012 at 5:13 am

    try our investment also.this is an offshore investment company and paying a high dividends.that is why i got 347% ROI.

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