The investment banking arm of the Metrobank group is launching its second exchange traded fund (ETF) later this year.
First Metro Investment Corp (FMIC) president Roberto Juanchito Dispo last week told reporters that it will roll out a fixed-income ETF with an initial capitalization of P3 billion.
"We're very keen on launching an ETF that will track the bond index in the country. The fixed-income market in the Philippines is much deeper than the equity markets. We're laying the groundwork. Hopefully, before end of the year, we will be able to do it," Dispo said.
In introducing its new ETF, Dispo noted the robust Philippine fixed-income market especially with credit rating agencies raising the country’s sovereign debt score to investment grade.
"The recent credit upgrade put us on the radar screen of regional and global investors so the opportunity is very ripe to for us to launch an ETF tracking the bond index. That will allow opportunities for investors to buy directly corporate and government securities issuances simply by investing in that ETF fund," Dispo said.
FMIC was the company behind the country's first ETF, the First Metro ETF, which reflects the performance of the PSE index (PSEi), a basket of 30 publicly traded shares regarded as the benchmark of the market's overall performance.
Considered as the world's fastest growing asset class, an ETF is similar to a mutual fund that tracks an index but is traded on a stock exchange.
To promote awareness on bond trading, FMIC is launching a bond exchange challenge that will be open to all universities in the country.
The competition will be similar to the Stock Exchange Challenge, a partnership with the Philippine Stock Exchange that has attracted about 120 universities. The competition offered a prize money of P150,000 for the winning team.
"We hire the winners. These are the crème de la crème," Dispo said.
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