PNB Prime Peso Money Market Fund MONEY MAET This fund is best suited for conservative investors who are after investment returns better than deposits. The PNB Prime Peso Money Market Fund is invested in a portfolio of short-term fixed income instruments with an average Macaulay duration of up to one year. It is ideal for clients who are looking for the following: a) relatively safe investment outlets, b) investments with returns higher than time deposits and c) Short term placements with a minimum holding period as low as 5 banking days NAVPU : 1.133800 Min. Initial Participation : Php 10,000.00 Min. Addt l. Participation : Php 10,000.00 Min. Investment Horizon : Up to 1 year Min. Holding Period : 5 banking days Trust Fee : 0.50% p.a. Valuation : Accrual Launch Date : September 27, 2010 Holdings ODF/F 69.99% 16.21% PAST 30 DAYS 0.14% 0.07% Year-To-Date 1.04% 0.61% PNB Prime Peso Money Market Fund LT 13.80% LT 13.80% Year-On-Year 1.54% 0.88% CASH 0.00% TOTAL 100.00% SINCE INCEPTION 13.38% 8.13% ABOVE RATES ARE ABSOLUTE. IS THE PHIL. 30-DAY SPECIAL SAVINGS RATE GEN. AVE. (NET OF TAX) ODF/F 69.99% ODF/F LT 16.21% LOCAL BOND MAET The BSP kept policy rates at current levels during its meeting last August 11. It noted that inflation outlook remains manageable and the economic growth backdrop continues to be firm. The Philippines reported a GDP growth of 7% for the 2Q of 2016 on the back of election-related spending and inflation rate for August remained soft at 1.8% vs 1.9% last month, still within BSP s expected range of 1.5 2.4%. The US Federal Reserve (Fed) kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is strengthening as the United States labor market continues to post healthier numbers. While macro fundamentals continue to bode well for the fixed income market, jitters coming from the possibility of a US Fed rate hike caused rates to move sideways with an upward bias. Yields on the 91-day and 182-day bills rose by 3 basis points to 1.479% and 1.474%, respectively, while the yield of the 364-day bill climbed by 9 bps to 1.724% during the last auction. The auction was 2 times oversubscribed indicating strong demand for short-term papers. While for the re-issued FXTN 7-58, the auction was 2.2 times oversubscribed with bids amounting to Php55.4B against the Php25.0 offer. The average yield rose to 3.186% versus its previous issuance at 3.016%. Once more, the BSP adjusted the 28-day Term Deposit Facility (F) offer size from Php60.0B to Php80.0B, increasing its total F size to 90 9Bn starting August 31, 2016 and started to award above the 2.5% floor for the first time with yields averaging to 2.501%. There are three upcoming corporate issuances in the pipeline, the Petron Corp and Ayala Land corporate bonds and the GT Capital Perpetual Preferred Shares. Moving forward, we expect yields to be driven by the BSP s policy actions and data from the US that would dictate the US Fed s monetary policy. STRATEGY The Fund will continue to invest in high yielding deposit instruments.
BALANCED The Fund is suited for middle-aged professionals, junior and senior executives and other clients who already have some exposure to the equities market. These clients understand that capital growth can be achieved by taking on more risks on portion/s of their investible funds. These clients diversify risks by investing in different asset classes, generally a balance between fixed income and equities. The PNB Prestige Balanced Fund is suitable for investors who want the best of both worlds: the high growth potential of the equities market and the stability and income generating capability of fixed income instruments. The equities portion of the Fund is invested in issues with large market capitalization which are more liquid and have potential for higher returns. STOCK MAET TOP 10 HOLDINGS GTCAP BDO TEL MPI SMPH SM BSP AF UBP LTNCD DUE 2019 EW LTNCD DUE 2018 TIME DEPOSIT BANK A PNB Prestige Balanced Fund NAVPU : 1.452069 as of August 31, 2016 Min. Initial Participation : Php 10,000.00 Min. Addt l. Participation : Php 10,000.00 Min. Investment Horizon : 5 years Trust Fee : 1.25% p.a. Custodian Fee : 0.0175% p.a. of Fund Value Redemption Settlement : T + 3 Launch Date : September 8, 2010 PAST MONTH -2.00% -0.98% Y 3.16% 6.92% YOY 0.38% 5.62% SINCE INCEPTION 45.21% 58.02% ABOVE RATES ARE ABSOLUTE. IS 50% PSEI AND 50% HSBC LOCAL CURRENCY BOND INDEX MONEY MAET (NET). The PSEi returned the gains it made in July and ended the Aughost month down by 2.21% or 175.74 to close at 7,787.37. On a year to date basis, the PSEi is up by 12.00% 12.01% or by 835.29 points. The downtrend was due to private placements of some index stocks (i.e. GTCAP), valuation issues, renewed interest rate hike fears in the US and the MSCI rebalancing. Foreign fund were net sellers in August at Php1.48bn after being net buyers the previous month at PhP21.01Bn. Year to date, foreigners were net buyers at PhP50.70bn. Global equity markets were jittery on fears of a US FED tightening. This came after the hawkish statement by US Fed Chief Yellen at the Jackson Hole Economic Policy Symposium where she said that the case for an increase in the federal funds rate has strengthened." The Philippines 2Q16 GDP was at 7.0%, the best among its Asian peers and its 2nd quarter corporate earnings were in line but not enough to move the market to its new highs. PSEi traded at 20x 2016E PE, still the most expensive in the region. Average daily value turnover were slightly lower to Php9.36Bn in August from Php9.74Bn in the previous month, Y daily average value turnover was at Php8.01Bn All sectors declined during the month. The financial, property and industrial sectors outperformed the PSEi while the Services and Mining & Oil Sectors underperformed the index. OUTLOOK We expect the result of the August US Jobs report to dictate market direction as the US FED s future actions, particularly in the FOMC September meeting, will be data dependent. December seems to be the month with the highest likelihood of a rate hike as could be seen in the futures market. Market is expected to trade in between 8000 to 7500 in the near term. LOCAL BOND MAET PNB Prestige Balanced Fund The BSP kept policy rates at current levels during its meeting last August 11. It noted that inflation outlook remains manageable and the economic growth backdrop continues to be firm. The Philippines reported a GDP growth of 7% for the 2Q of 2016 on the back of election-related spending and inflation rate for August remained soft at 1.8% vs 1.9% last month, still within BSP s expected range of 1.5 2.4%. The US Federal Reserve (Fed) kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is strengthening as the United States labor market continues to post healthier numbers. While macro fundamentals continue to bode well for the fixed income market, jitters coming from the possibility of a US Fed rate hike caused rates to move sideways with an upward bias. Yields on the 91-day and 182-day bills rose by 3 basis points to 1.479% and 1.474%, respectively, while the yield of the 364-day bill climbed by 9 bps to 1.724% during the last auction. The auction was 2 times oversubscribed indicating strong demand for short-term papers. While for the re-issued FXTN 7-58, the auction was 2.2 times oversubscribed with bids amounting to Php55.4B against the Php25.0 offer. The average yield rose to 3.186% versus its previous issuance at 3.016%. Once more, the BSP adjusted the 28-day Term Deposit Facility (F) offer size from Php60.0B to Php80.0B, increasing its total F size to 90 9Bn starting August 31, 2016 and started to award above the 2.5% floor for the first time with yields averaging to 2.501%. There are three upcoming corporate issuances in the pipeline, the Petron Corp and Ayala Land corporate bonds and the GT Capital Perpetual Preferred Shares. Moving forward, we expect yields to be driven by the BSP s policy actions and data from the US that would dictate the US Fed s monetary policy. 56.00% ODF/F 8.16% LT / ODF/F 9.17% LT / 26.67%
PNB High Dividend Fund Fund Classification : EQUITY The Fund is suited for experienced investors who are aware of the potential for high yields in stock markets investments, and are also willing to take the corresponding risk of such investments. The PNB High Dividend Fund is a peso denominated, equity fund that seeks current income and long-term capital appreciation by investing in listed companies belonging to the PSE that have high dividend yields and have an established history of paying dividends. NAVPU : 1.497652 Min. Initial Participation : Php 10,000.00 Min. Addt l. Participation : Php 10,000.00 Min. Investment Horizon : 5 years Trust Fee : 2.00% p.a. Custodian Fee : 0.0175% p.a. of Fund Value Redemption Settlement : T + 3 Launch Date : June 15, 2012 as of August 31, 2016 TOP 10 HOLDINGS DNL AGI MWC BPI AP LTG PAST MONTH -1.35% -2.21% Y 12.25% 12.01% YOY 8.82% 9.70% SINCE INCEPTION 49.77% 57.94% 97.39% PNB High Dividend Fund STOCK MAET CEB FLI ABOVE RATES ARE ABSOLUTE. IS THE RLC BDO PHILIPPINE STOCK EXCHANGE INDEX. / SDA / SDA 2.61% The PSEi returned the gains it made in July and ended the Aughost month down by 2.21% or 175.74 to close at 7,787.37. On a year to date basis, the PSEi is up by 12.00% 12.01% or by 835.29 points. The downtrend was due to private placements of some index stocks (i.e. GTCAP), valuation issues, renewed interest rate hike fears in the US and the MSCI rebalancing. Foreign fund were net sellers in August at Php1.48bn after being net buyers the previous month at PhP21.01bn. Year to date, foreigners were net buyers at PhP50.70bn. Global equity markets were jittery on fears of a US FED tightening. This came after the hawkish statement by US Fed Chief Yellen at the Jackson Hole Economic Policy Symposium where she said that the case for an increase in the federal funds rate has strengthened." The Philippines 2Q16 GDP was at 7.0%, the best among its Asian peers and its 2nd quarter corporate earnings were in line but not enough to move the market to its new highs. PSEi traded at 20x 2016E PE, still the most expensive in the region. Average daily value turnover were slightly lower to Php9.36Bn in August from Php9.74Bn in the previous month, Y daily average value turnover was at Php8.01Bn All sectors declined during the month. The financial, property and industrial sectors outperformed the PSEi while the Services and Mining & Oil Sectors underperformed the index. OUTLOOK We expect the result of the August US Jobs report to dictate market direction as the US FED s future actions, particularly in the FOMC September meeting, will be data dependent. December seems to be the month with the highest likelihood of a rate hike as could be seen in the futures market. Market is expected to trade from 8000 to 7500 in the near term.
PNB Global Filipino Peso Money Market Fund MONEY MAET This fund is best suited for conservative investors who are after investment returns better than deposits. The PNB Global Filipino Peso Money Market Fund is specifically designed to meet the investment needs of our Overseas Filipino Workers (OFWs) and their beneficiaries. It provides them with an outlet to accumulate their savings for the purchase of a new home or educational plans for their children or other future needs of their families. NAVPU: 1.289397 Min. Initial Participation : Php 5,000.00 Min. Addt l. Participation : Php 5,000.00 Min. Investment Horizon : up to 1 year Min. Holding Period : 5 banking days Trust Fee : 0.50% p.a. Valuation : Accrual Launch Date : January 11, 2006 ASSET ALLOCATION PNB Global Filipino Peso Money Market Fund 53.41% ODF/F 24.37% LT 22.22% PAST MONTH 0.16% 0.07% Year-To-Date 1.18% 0.61% Year-On-Year 1.74% 0.88% SINCE INCEPTION 28.94% 22.18% LT / 22.22% CASH TOTAL 0.00 % 100.00% ABOVE RATES ARE ABSOLUTE. IS THE PHIL. 30-DAY SPECIAL SAVINGS RATE GEN. AVE. (NET OF TAX) 53.41% LT / ODF/F ODF/F 24.37% LOCAL BOND MAET The BSP kept policy rates at current levels during its meeting last August 11. It noted that inflation outlook remains manageable and the economic growth backdrop continues to be firm. The Philippines reported a GDP growth of 7% for the 2Q of 2016 on the back of election-related spending and inflation rate for August remained soft at 1.8% vs 1.9% last month, still within BSP s expected range of 1.5 2.4%. The US Federal Reserve (Fed) kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is strengthening as the United States labor market continues to post healthier numbers. While macro fundamentals continue to bode well for the fixed income market, jitters coming from the possibility of a US Fed rate hike caused rates to move sideways with an upward bias. Yields on the 91-day and 182-day bills rose by 3 basis points to 1.479% and 1.474%, respectively, while the yield of the 364-day bill climbed by 9 bps to 1.724% during the last auction. The auction was 2 times oversubscribed indicating strong demand for short-term papers. While for the re-issued FXTN 7-58, the auction was 2.2 times oversubscribed with bids amounting to Php55.4B against the Php25.0 offer. The average yield rose to 3.186% versus its previous issuance at 3.016%. Once more, the BSP adjusted the 28-day Term Deposit Facility (F) offer size from Php60.0B to Php80.0B, increasing its total F size to 90 9Bn starting August 31, 2016 and started to award above the 2.5% floor for the first time with yields averaging to 2.501%. There are three upcoming corporate issuances in the pipeline, the Petron Corp and Ayala Land corporate bonds and the GT Capital Perpetual Preferred Shares. Moving forward, we expect yields to be driven by the BSP s policy actions and data from the US that would dictate the US Fed s monetary policy. STRATEGY The Fund will continue to invest in high yielding deposit instruments.
PNB Global Filipino Dollar Money Market Fund MONEY MAET This fund is best suited for conservative investors who are after investment returns better than dollar deposits. The PNB Global Filipino Dollar Money Market Fund is specifically designed to meet the investment needs of our Overseas Filipino Workers (OFWs) and their beneficiaries. It provides them with an outlet to accumulate their savings for the purchase of a new home or educational plans for their children or other future needs of their families. NAVPU : 1.234298 Base Currency : USD Min. Initial Participation : USD 100.00 Min. Addt l. Participation : USD 100.00 Min. Investment Horizon : up to 1 year Trust Fee : 0.50% p.a. Valuation : Accrual Launch Date : December 23, 2005 ASSET ALLOCATION 85.64% LT 14.36% Past Month 0.08% 0.06% Year-To-Date 0. 57% 0.42% Year-On-Year 0.89% 0.58% PNBGlobal Filipino Dollar Money Market Fund 85.64% CASH 0.00% TOTAL 100.00% SINCE INCEPTION 23. 43% 5.80% ABOVE RATES ARE ABSOLUTE. IS THE AVE. OF 3 BANK QUOTES*. (NET OF TAX) *EFFECTIVE AUGUST 2010. LT / LT / 14.36% ROP MAET The US Federal Open Market Committee kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is increasing as the United States labor market continues to post healthier numbers. US Fed Chair Janet Yellen noted in a speech at the Jackson Hole symposium that the possibility for higher rates has strengthened on the back of the growth in consumer spending and sustained employment gains. With these, US Treasury yields rose after Fed officials stressed that the market is under pricing the chances of rate hike this year. The 10-year US Treasury yield suddenly to 1.58% in August from last month s 1.45% after minutes of the July Federal Open Market Committee (FOMC) meeting showed that some of its officials are believing that a rate increase is possible as early as this coming September with a 30%- 40% chances of a rate hike. The rate hike will still likely be gradual and data dependent and we are anticipating sovereign bond yields to remain defensive ahead of the September 20 meeting of the FOMC. STRATEGY The Fund will continue to invest in high yielding deposit instruments.
Fund Classification : EQUITY PNB Enhanced Phil-Index Reference Fund The Fund is best for aggressive investors who are aware of the potential high yields in stock investments but are willing to take the corresponding risk of such investment. The PNB Enhanced Phil-Index Reference Fund is a pesodenominated, equity-index reference fund that uses an Enhanced Index Reference Approach which aims to invest in selected representative stocks that are highly correlated to the Philippine Stock Exchange index (PSEi) and minimize losses during a bear market by divesting out of the equities market STOCK MAET BPI as of August 31, 2016 TOP 10 HOLDINGS AC AEV ALI BDO JGS SM SMPH TEL URC NAVPU: 1.826645 Min. Initial Participation : Php 10,000.00 Min. Addt l. Participation : Php 10,000.00 Min. Investment Horizon : 5 years Trust Fee : 2.00% p.a. Custodian Fee : 0.0175% p.a. of Fund Value Redemption Settlement : T + 3 Launch Date : September 8, 2010 PAST MONTH -2.49% -2.21% Y 10.60% 12.01% YOY 7.71% 9.07% SINCE INCEPTION 82.66% 104.68% ABOVE RATES ARE ABSOLUTE. IS THE PHILIPPINE STOCK EXCHANGE INDEX. The PSEi returned the gains it made in July and ended the Aughost month down by 2.21% or 175.74 to close at 7,787.37. On a year to date basis, the PSEi is up by 12.00% 12.01% or by 835.29 points. The downtrend was due to private placements of some index stocks (i.e. GTCAP), valuation issues, renewed interest rate hike fears in the US and the MSCI rebalancing. Foreign fund were net sellers in August at Php1.48bn after being net buyers the previous month at PhP21.01bn. Year to date, foreigners were net buyers at PhP50.70bn. Global equity markets were jittery on fears of a US FED tightening. This came after the hawkish statement by US Fed Chief Yellen at the Jackson Hole Economic Policy Symposium where she said that the case for an increase in the federal funds rate has strengthened." The Philippines 2Q16 GDP was at 7.0%, the best among its Asian peers and its 2nd quarter corporate earnings were in line but not enough to move the market to its new highs. PSEi traded at 20x 2016E PE, still the most expensive in the region. Average daily value turnover were slightly lower to Php9.36Bn in August from Php9.74Bn in the previous month, Y daily average value turnover was at Php8.01Bn All sectors declined during the month. The financial, property and industrial sectors outperformed the PSEi while the Services and Mining & Oil Sectors underperformed the index. OUTLOOK We expect the result of the August US Jobs report to dictate market direction as the US FED s future actions, particularly in the FOMC September meeting, will be data dependent. December seems to be the month with the highest likelihood of a rate hike as could be seen in the futures market. Market is expected to trade in between 8000 to 7500 in the near term. PNBEnhanced Phil-Index Reference Fund 96.32% / F / ODF / F / ODF 3.68%
PNB DREAM Builder Money Market Fund MONEY MAET This fund is suited for conservative clients who wants an investment strategy where the primary objective is to prevent the loss of principal at all times. The PNB DREAM Builder Money Market Fund has an objective of helping investors reach their goals of providing for their child s education, endowment gifts, start-up capital for a small business, among others. It is invested in a portfolio of short and long term deposit instruments with a portfolio weighted average duration of up to 1 year. NAVPU: 1.173205 Min. Initial Participation : Php 2,000.00 Min. Addt l. Participation : Php 2,000.00 Min. Investment Horizon : up to 1 year Trust Fee : 0.50% p.a. Valuation : Accrual Re-launch Date : October 01, 2014 Fund Performance & Composition ASSET ALLOCATION 21.92% BENCH MA PAST MONTH 0.16% 0.07% PNB Dream Builder Money Market Fund GS 0.01% 21.92% LT 15.37% Y 1.19% 0.61% ODF/F 62.70% ODF / F 62.70% YOY 1.76% 0.88% GS 0.01% TOTAL 100.00% SINCE INCEPTION 17.32% 12.67% ABOVE RATES ARE ABSOLUTE. IS THE PHILIPPINE 30 DAY SPECIAL SAVINGS RATE GENERAL AVERAGE. *EFFECTIVE OCTOBER 2014. LT / ODF/F GS LT / 15.37% LOCAL BOND MAET The BSP kept policy rates at current levels during its meeting last August 11. It noted that inflation outlook remains manageable and the economic growth backdrop continues to be firm. The Philippines reported a GDP growth of 7% for the 2Q of 2016 on the back of election-related spending and inflation rate for August remained soft at 1.8% vs 1.9% last month, still within BSP s expected range of 1.5 2.4%. The US Federal Reserve (Fed) kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is strengthening as the United States labor market continues to post healthier numbers. While macro fundamentals continue to bode well for the fixed income market, jitters coming from the possibility of a US Fed rate hike caused rates to move sideways with an upward bias. Yields on the 91-day and 182-day bills rose by 3 basis points to 1.479% and 1.474%, respectively, while the yield of the 364-day bill climbed by 9 bps to 1.724% during the last auction. The auction was 2 times oversubscribed indicating strong demand for short-term papers. While for the re-issued FXTN 7-58, the auction was 2.2 times oversubscribed with bids amounting to Php55.4B against the Php25.0 offer. The average yield rose to 3.186% versus its previous issuance at 3.016%. Once more, the BSP adjusted the 28-day Term Deposit Facility (F) offer size from Php60.0B to Php80.0B, increasing its total F size to 90 9Bn starting August 31, 2016 and started to award above the 2.5% floor for the first time with yields averaging to 2.501%. There are three upcoming corporate issuances in the pipeline, the Petron Corp and Ayala Land corporate bonds and the GT Capital Perpetual Preferred Shares. Moving forward, we expect yields to be driven by the BSP s policy actions and data from the US that would dictate the US Fed s monetary policy. STRATEGY The Fund will continue to invest in high yielding deposit instruments.
INTERMEDIATE-TERM PNB Profit Dollar Intermediate Term Bond Fund BOND This fund is best suited for moderate investors who are willing to take minimal risks and are after investment returns better than Dollar Time Deposits. The PNB Profit Dollar Intermediate Term Bond Fund is suited for investors in search of higher-earning investments for their US dollar funds. It is invested in a mixed portfolio of short and long term fixed income instruments with a portfolio weighted average life of up to three years. The fund aims to generate income for its participants in the intermediate term that exceeds inflation. NAVPU: 1.443483 Base Currency : USD Min. Initial Participation : 1,000.00 Min. Addt l. Participation : 1,000.00 Min. Investment Horizon : up to 3 years Trust Fee : 1.00% p.a. Custodian Fee : 0.0175% p.a. of Fund Value Launch Date : October 3, 2005 Top Holding s ROP 20 ROP 21 Banks A, B, & C PAST MONTH 0.11% 0.13% Y 2.08% 1.05% YOY 2.38% 1.60% SINCE INCEPTION 44.35% 32.96% ABOVE RATES ARE ABSOLUTE. IS MOVING AVE. OF 3 YR. ROPs. 51.87% PNB Profit Dollar Intermediate TermBond Fund LT / 13.19% CASH LT / ROP CASH 0.01% ROP 34.93% ROP MAET The US Federal Open Market Committee kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is increasing as the United States labor market continues to post healthier numbers. US Fed Chair Janet Yellen noted in a speech at the Jackson Hole symposium that the possibility for higher rates has strengthened on the back of the growth in consumer spending and sustained employment gains. With these, US Treasury yields rose after Fed officials stressed that the market is under pricing the chances of rate hike this year. The 10-year US Treasury yield suddenly to 1.58% in August from last month s 1.45% after minutes of the July Federal Open Market Committee (FOMC) meeting showed that some of its officials are believing that a rate increase is possible as early as this coming September with a 30%- 40% chances of a rate hike. The rate hike will still likely be gradual and data dependent and we are anticipating sovereign bond yields to remain defensive ahead of the September 20 meeting of the FOMC.
PNB Prime Dollar Money Market Fund MONEY MAET This fund is best suited for conservative investors who are after investment returns better than dollar deposits. The PNB Prime Dollar Money Market Fund is invested in a portfolio of short term fixed income instruments with an average Macaulay duration of up to one year. It is ideal for clients who are looking for the following: a) relatively safe investment outlets, b) investments with returns higher than time deposits and c) Short term placements with a minimum holding period of 30 calendar days. NAVPU : 1.061445 PRODUCT FEATURES Base Currency : USD Min. Initial Participation : USD 500.00 Min. Addt l. Participation : USD 500.00 Min. Investment Horizon : 1 year Trust Fee : 0.50% p.a. Valuation : Accrual Inception Date : March 7, 2011 Fund Performance & Composition Asset Holdings 85.95% PAST MONTH 0.08% 0.05% 85.95% PNB Prime Dollar Money Market Fund CASH 0.11% LT 13.94% Year-To-Date 0. 56% 0.37% CASH 0.11% Year-On-Year 0.87% 0.57% SINCE INCEPTION 6.14% 3.11% TOTAL 100.00% ABOVE RATES ARE ABSOLUTE. IS THE AVE. OF 3 BANK QUOTES. (NET OF TAX) CASH LT / LT / 13.94% ROP MAET The US Federal Open Market Committee kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is increasing as the United States labor market continues to post healthier numbers. US Fed Chair Janet Yellen noted in a speech at the Jackson Hole symposium that the possibility for higher rates has strengthened on the back of the growth in consumer spending and sustained employment gains. With these, US Treasury yields rose after Fed officials stressed that the market is under pricing the chances of rate hike this year. The 10-year US Treasury yield suddenly to 1.58% in August from last month s 1.45% after minutes of the July Federal Open Market Committee (FOMC) meeting showed that some of its officials are believing that a rate increase is possible as early as this coming September with a 30%- 40% chances of a rate hike. The rate hike will still likely be gradual and data dependent and we are anticipating sovereign bond yields to remain defensive ahead of the September 20 meeting of the FOMC. STRATEGY The Fund will continue to invest in high yielding deposit instruments.
Fund Classification : EQUITY PNB Equity Fund (formerly AUP Equities Fund) This Fund is suited for aggressive investors who are aware of the potential for high yields in stock market investments and are willing to take the corresponding risk of such investment. The PNB Equity Fund is a peso denominated, equity fund which aims to achieve capital growth by investing in issues listed in the PSEi. as of August 31, 2016 TOP 10 HOLDINGS AC ALI MBT SMPH PAST MONTH NAVPU: 1.526675 Min. Initial Participation : Php 10,000.00 Min. Addt l. Participation : Php 10,000.00 Min. Investment Horizon: 5 years Early Redemption Fee : 50% of income earned, if any Trust Fee : 2.00% p.a. Custodian Fee : 0.0175% p.a. of Fund Value Redemption Settlement : T + 3 Re-launch Date : March 1, 2016-3.51% -2.21% Y 5.23% 12.01% 95.07% PNB Equity Fund BSP ODF/F MER SM URC YOY 3.81% 9.70% SINCE INCEPTION 52.67% 130.38% GTCAP JGS ABOVE RATES ARE ABSOLUTE. IS THE PHILIPPINE STOCK EXCHANGE INDEX. /F/ODF /F/ODF 4.93% STOCK MAET The PSEi returned the gains it made in July and ended the Aughost month down by 2.21% or 175.74 to close at 7,787.37. On a year to date basis, the PSEi is up by 12.00% 12.01% or by 835.29 points. The downtrend was due to private placements of some index stocks (i.e. GTCAP), valuation issues, renewed interest rate hike fears in the US and the MSCI rebalancing. Foreign fund were net sellers in August at Php1.48bn after being net buyers the previous month at PhP21.01bn. Year to date, foreigners were net buyers at PhP50.70bn. Global equity markets were jittery on fears of a US FED tightening. This came after the hawkish statement by US Fed Chief Yellen at the Jackson Hole Economic Policy Symposium where she said that the case for an increase in the federal funds rate has strengthened." The Philippines 2Q16 GDP was at 7.0%, the best among its Asian peers and its 2nd quarter corporate earnings were in line but not enough to move the market to its new highs. PSEi traded at 20x 2016E PE, still the most expensive in the region. Average daily value turnover were slightly lower to Php9.36Bn in August from Php9.74Bn in the previous month, Y daily average value turnover was at Php8.01Bn All sectors declined during the month. The financial, property and industrial sectors outperformed the PSEi while the Services and Mining & Oil Sectors underperformed the index. OUTLOOK We expect the result of the August US Jobs report to dictate market direction as the US FED s future actions, particularly in the FOMC September meeting, will be data dependent. December seems to be the month with the highest likelihood of a rate hike as could be seen in the futures market. Market is expected to trade from 8000 to 7500 in the near term.
INTERMEDIATE-TERM BOND The Fund is suited for moderate clients who are willing to take some amount of controlled risk. It is NOT suited for clients whose primary objective is capital preservation. The PNB Peso Intermediate Term Bond Fund is invested in a mixed portfolio of fixed income instruments with an average Macaulay duration of up to three (3) years. PNB Peso Intermediate Term Bond Fund (formerly AUP GS Fund) NAVPU: 1.375212 Base Currency : PHP Min. Initial Participation : 10,000.00 Min. Addt l. Participation : 10,000.00 Min. Investment Horizon : up to 3 years Trust Fee : 0.75% p.a. Custodian Fee : 0.0175% p.a. of Fund Value Re-launch Date : March 1, 2016 TOP 5 HOLDINGS FXTN 5-72 BSP AF / ODF PAST MONTH 0.06% 0.24% Y 2.04% 3.95% GS 37.92% PNB Peso Intermediate TermBond Fund 5.98% LT / 29.79% FXTN 7-57 YOY 2.07% 4.30% UBP LTNCD DUE 2019 EW LTNCD DUE 2019 SINCE INCEPTION 37.52% 64.74% ABOVE RATES ARE ABSOLUTE. IS HSBC LOCAL CURRENCY BOND INDEX 1-3YR ODF/F 26.31% LT / ODF/F GS LOCAL BOND MAET The BSP kept policy rates at current levels during its meeting last August 11. It noted that inflation outlook remains manageable and the economic growth backdrop continues to be firm. The Philippines reported a GDP growth of 7% for the 2Q of 2016 on the back of election-related spending and inflation rate for August remained soft at 1.8% vs 1.9% last month, still within BSP s expected range of 1.5 2.4%. The US Federal Reserve (Fed) kept its policy interest rates steady in its August meeting but hinted that the case to hike rates before the end of the year is strengthening as the United States labor market continues to post healthier numbers. While macro fundamentals continue to bode well for the fixed income market, jitters coming from the possibility of a US Fed rate hike caused rates to move sideways with an upward bias. Yields on the 91-day and 182-day bills rose by 3 basis points to 1.479% and 1.474%, respectively, while the yield of the 364-day bill climbed by 9 bps to 1.724% during the last auction. The auction was 2 times oversubscribed indicating strong demand for short-term papers. While for the re-issued FXTN 7-58, the auction was 2.2 times oversubscribed with bids amounting to Php55.4B against the Php25.0 offer. The average yield rose to 3.186% versus its previous issuance at 3.016%. Once more, the BSP adjusted the 28-day Term Deposit Facility (F) offer size from Php60.0B to Php80.0B, increasing its total F size to 90 9Bn starting August 31, 2016 and started to award above the 2.5% floor for the first time with yields averaging to 2.501%. There are three upcoming corporate issuances in the pipeline, the Petron Corp and Ayala Land corporate bonds and the GT Capital Perpetual Preferred Shares. Moving forward, we expect yields to be driven by the BSP s policy actions and data from the US that would dictate the US Fed s monetary policy.