I’ve been hearing all the buzz surrounding COL Fund Source (CFS), the
new product introduced by COL Financial. CFS is the Philippines’ 1st
and only online mutual funds supermarket. Since I want to be in the know, I attended COL’s Investing in Mutual Funds via COL Fund Source seminar last August 7, 2015.
If you are not familiar with the Mutual Funds (MF) model, these are pooled funds from assorted investors which are managed by investment professionals and placed in different asset classes like equities, bonds and securities.
I first learned about mutual funds in my third year college finance class. I remember being very excited learning about this financial tool. Pre-MF knowledge, I had thought that the only way to invest in the stock market was by going through it personally. The prospect of having a full time investment professional handle my money and investments seemed like the most sensible thing, specially for someone not well-versed in the stock market.
I had opened my first mutual fund account before that semester ended. I still remember searching for the nearest branch of the mutual fund company I was going to invest in. After taking 2 jeeps, the MRT (dun dun dun) and some walking I finally reached the office. I had to wait though since their was no agent present at the branch. When the financial adviser arrived, I filled out the application form, answered the risk profiler, invested my money and commuted back home.
After a week, I realized I wanted to topup my account so I went to the bank to (I haven’t discovered the wonderful world of online banking then) withdraw and redeposit my money to the MF company’s account. After this, I had to fax (I was told they don’t accept e-mails!) the deposit slip and top up form to branch. Once my balance was received, I received email and SMS confirmation.
I also registered myself on the online website of the MF company where I could check the performance of my account. I opted to get daily emails regarding the unit price of the fund I chose. Apart from these daily email reports I also receive quarterly direct mail reports regarding the status of my investment.
Just recently, I tried exploring the online platform to check if reports (like what specific companies is the fund invested in or how diversified is the investment) about the funds are given but I couldn’t find them. From time to time, I do receive invitations to events like “Annual Shareholders/Investors Meeting” but I’ve never really attended one since I simply haven’t had the time.
Hectic college life took over after that second balance addition and I forgot about my account for some time. Even when my schedule cleared out, I found the adding funds process a little too inconvenient (especially the faxing part) and this prevented me from topping up my account again. After some time, I also learned how to invest in online stock brokers and this is where I course most of my savings nowadays.
COL Financial Group, Inc. announced on their facebook page that the system for COL Fund Source is finally live as of July 29, 2015.
One of the things that stuck with me from all the press releases COL
has been doing is the phrase “Fund Supermarket,” admittedly I didn’t
know what that meant so I had to ask help from google.
COL Fund Source is the first online fund supermarket in the Philippines. It offers 24 mutual funds from the TOP 6 fund houses in the Philippines today which are;
The Investing in Mutual Funds via COL Fund Source seminar outlined 5 benefits of investing with CFS. I’ve ranked them in the order which I found most valuable.
5. One Stop Shop
With COL Fund Source, you will be able to browse, select and buy any of the 24 funds offered by the Top 6 fund houses in the Philippines. I’m positive that more fund houses will be offered in the future. There will be no need to personally go to the different mutual fund company offices or contact individual financial advisers just to sign up or buy fund units.
What is even more amazing, since COL Financial transacts with these companies on your behalf, you only need to sign up online at the COL website. No more filling out individual forms with each fund house and apply separately.
I put this in the fifth place even though it’s a very remarkable feature because by definition, this is the kind of product which a proper fund supermarket has to be. Nothing new here.
4. Expert opinion
COL setup a special system in their platform to makeup for the lack of personal financial advisers who traditionally guide investors into what type of fund they should invest on.
3. No Front End Fees
I appreciate COL’s effort in trying to simplify their product. I think more people would feel incentivized and invest because of this waiver. I can only imagine all the work and negotiating skills that was put in order to convince these individual fund houses to waive their front end fees and risk losing a point of differentiation from other funds.
Since there are no front end fees, your cash balance will be fully utilized when purchasing fund units. It is also simpler because all fees are figured into the computation of the NAVPS, no need to worry about personally computing the management fee, taxes and other miscellaneous fees (that’s why it’s called Net Asset Value, right).
What the funds at COL Fund Source would implement is individual holding periods and, I suspect, back end fees. This means that there is a minimum number of days, months or years, depending on the type of fund, wherein you must refrain from moving your account. Cashing out your balance within the holding period would mean paying a percentage amount as fees, very similar to the time deposit concept.
I’m putting this at number 3 because it’s a very good feature to have specially for someone who wants to maximize his investment. By being given a front end fee waiver, you can effectively buy more units with your money. This translates to better gains especially when the fund is performing excellently.
2. Transparency
I’m the type of person who looks at the breakdown of items in a receipt instead of just looking at the total. I’m putting this at second place because I put transparency in high regard. Disclosures in the financial industry, as I’ve observed, seems to be a very sensitive topic. Even the insurance company which I represent (being a part-time financial adviser) don’t disclose the exact amount directed to management fees.
I do not understand why it should be that way, as paying investors, I think we have the right to know how much exactly is being deducted from us so we can make more informed decisions about our investments.
CFS is a new product and I have yet to try it personally. However, I confirmed with the speaker in the seminar that the actual rate of the management fee would be included in the reports published at the website. I will update this once I’ve seen them myself.
1. Convenience
And finally, COL Fund Source’s biggest selling point – Convenience! COL’s platform is web-based. From account opening, funding, selling, withdrawing, transferring, basically all transactions can be done online.
Even monitoring of fund performance is consolidated in the same page where you monitor your stock investments!
I am a self-proclaimed home buddy and I don’t think I have to elaborate this point any further. Although I’d like to bid farewell to facsimile transactions, goodbye fax machines! I won’t be missing you.
0. Bonus Advantage:
With COL Fund Source you reduce your carbon footprint and help save the world while investing by going online and paperless!
To cap off, I honestly think that COL Fund Source is a very well thought out and innovative product. I trust that the people over at COL have done the numbers to ensure product sustainability. This new product has even increased my admiration for COL Financial as an institution.
Author: John Financial Adviser & Blogger at Manic Investive
John works in the marketing industry. He earned his communications technology management degree last March 2015. He's been really into personal finance recently.
If you are not familiar with the Mutual Funds (MF) model, these are pooled funds from assorted investors which are managed by investment professionals and placed in different asset classes like equities, bonds and securities.
Using CFS vs the Traditional Mutual Fund Investment Process
Traditional Mutual Funds Investing Process
I first learned about mutual funds in my third year college finance class. I remember being very excited learning about this financial tool. Pre-MF knowledge, I had thought that the only way to invest in the stock market was by going through it personally. The prospect of having a full time investment professional handle my money and investments seemed like the most sensible thing, specially for someone not well-versed in the stock market.
I had opened my first mutual fund account before that semester ended. I still remember searching for the nearest branch of the mutual fund company I was going to invest in. After taking 2 jeeps, the MRT (dun dun dun) and some walking I finally reached the office. I had to wait though since their was no agent present at the branch. When the financial adviser arrived, I filled out the application form, answered the risk profiler, invested my money and commuted back home.
After a week, I realized I wanted to topup my account so I went to the bank to (I haven’t discovered the wonderful world of online banking then) withdraw and redeposit my money to the MF company’s account. After this, I had to fax (I was told they don’t accept e-mails!) the deposit slip and top up form to branch. Once my balance was received, I received email and SMS confirmation.
I also registered myself on the online website of the MF company where I could check the performance of my account. I opted to get daily emails regarding the unit price of the fund I chose. Apart from these daily email reports I also receive quarterly direct mail reports regarding the status of my investment.
The name of the company may or may not have been changed. You guess.
Just recently, I tried exploring the online platform to check if reports (like what specific companies is the fund invested in or how diversified is the investment) about the funds are given but I couldn’t find them. From time to time, I do receive invitations to events like “Annual Shareholders/Investors Meeting” but I’ve never really attended one since I simply haven’t had the time.
Hectic college life took over after that second balance addition and I forgot about my account for some time. Even when my schedule cleared out, I found the adding funds process a little too inconvenient (especially the faxing part) and this prevented me from topping up my account again. After some time, I also learned how to invest in online stock brokers and this is where I course most of my savings nowadays.
What is COL Fund Source?
COL Financial Group, Inc. announced on their facebook page that the system for COL Fund Source is finally live as of July 29, 2015.
[A Fund Supermarket is] an investment firm or brokerage that offers investors a wide array of mutual funds from different fund families. Investors benefit by obtaining access to an extensive range of top performing funds, as well as by receiving a consolidated statement of all their mutual fund holdings.I learned something new today thanks to Investopedia. As I am also not familiar with any offline fund supermarkets in the Philippines I tried googling ‘Philippine fund supermarket’ but all of the results pertains to COL Fund Source.
Definition by Investopedia
COL Fund Source is the first online fund supermarket in the Philippines. It offers 24 mutual funds from the TOP 6 fund houses in the Philippines today which are;
- ALFM Mutual Funds
- ATR KimEng Asset Management (ATRAM)
- First Metro Asset Management (FAMI)
- Philam Asset Management
- Philequity Management, Inc.
- Sun Life Asset Management.
Benefits of Investing through COL Fund Source
The Investing in Mutual Funds via COL Fund Source seminar outlined 5 benefits of investing with CFS. I’ve ranked them in the order which I found most valuable.
5. One Stop Shop
With COL Fund Source, you will be able to browse, select and buy any of the 24 funds offered by the Top 6 fund houses in the Philippines. I’m positive that more fund houses will be offered in the future. There will be no need to personally go to the different mutual fund company offices or contact individual financial advisers just to sign up or buy fund units.
What is even more amazing, since COL Financial transacts with these companies on your behalf, you only need to sign up online at the COL website. No more filling out individual forms with each fund house and apply separately.
I put this in the fifth place even though it’s a very remarkable feature because by definition, this is the kind of product which a proper fund supermarket has to be. Nothing new here.
4. Expert opinion
COL setup a special system in their platform to makeup for the lack of personal financial advisers who traditionally guide investors into what type of fund they should invest on.
- COL’s Risk Rating
- Research Reports (from the department headed by one of my idols – April Lynn C. Lee-Tan, CFA)
- Fact Sheets (includes standard deviation, historical performance and sharpe ratio)
- Trainings and seminars
- Fund Screeners (I’ve been told these are sort-able tables! hahaha)
3. No Front End Fees
I appreciate COL’s effort in trying to simplify their product. I think more people would feel incentivized and invest because of this waiver. I can only imagine all the work and negotiating skills that was put in order to convince these individual fund houses to waive their front end fees and risk losing a point of differentiation from other funds.
Since there are no front end fees, your cash balance will be fully utilized when purchasing fund units. It is also simpler because all fees are figured into the computation of the NAVPS, no need to worry about personally computing the management fee, taxes and other miscellaneous fees (that’s why it’s called Net Asset Value, right).
What the funds at COL Fund Source would implement is individual holding periods and, I suspect, back end fees. This means that there is a minimum number of days, months or years, depending on the type of fund, wherein you must refrain from moving your account. Cashing out your balance within the holding period would mean paying a percentage amount as fees, very similar to the time deposit concept.
I’m putting this at number 3 because it’s a very good feature to have specially for someone who wants to maximize his investment. By being given a front end fee waiver, you can effectively buy more units with your money. This translates to better gains especially when the fund is performing excellently.
2. Transparency
I’m the type of person who looks at the breakdown of items in a receipt instead of just looking at the total. I’m putting this at second place because I put transparency in high regard. Disclosures in the financial industry, as I’ve observed, seems to be a very sensitive topic. Even the insurance company which I represent (being a part-time financial adviser) don’t disclose the exact amount directed to management fees.
I do not understand why it should be that way, as paying investors, I think we have the right to know how much exactly is being deducted from us so we can make more informed decisions about our investments.
CFS is a new product and I have yet to try it personally. However, I confirmed with the speaker in the seminar that the actual rate of the management fee would be included in the reports published at the website. I will update this once I’ve seen them myself.
1. Convenience
And finally, COL Fund Source’s biggest selling point – Convenience! COL’s platform is web-based. From account opening, funding, selling, withdrawing, transferring, basically all transactions can be done online.
Even monitoring of fund performance is consolidated in the same page where you monitor your stock investments!
I am a self-proclaimed home buddy and I don’t think I have to elaborate this point any further. Although I’d like to bid farewell to facsimile transactions, goodbye fax machines! I won’t be missing you.
0. Bonus Advantage:
With COL Fund Source you reduce your carbon footprint and help save the world while investing by going online and paperless!
COL Fund Source: A Game Changer
The only advantages that the traditional MF investing method I see are;- Human interaction – Filipinos are very social creatures and some (the more senior generation perhaps) would prefer talking to a person for questions and clarifications. (while FAQs try to address these, the experience is just not the same).
- Expert Advice – while CFS has systems in place for this, I think that some people would need more guidance and stronger advice than others which I don’t think a one size fits all system can give.
- Help your Financial Adviser ‘Friend’ – If you want to invest and at the same time help your FA, through commissions, you can always opt to go to them and not to COL. If you love your friend more than COL then why not direct the unavoidable commissions to them right?
To cap off, I honestly think that COL Fund Source is a very well thought out and innovative product. I trust that the people over at COL have done the numbers to ensure product sustainability. This new product has even increased my admiration for COL Financial as an institution.
Author: John Financial Adviser & Blogger at Manic Investive
John works in the marketing industry. He earned his communications technology management degree last March 2015. He's been really into personal finance recently.
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