Resilient investment choices for sustaining financial markets

 Resilient investment choices for sustaining financial markets

More than a health crisis, the COVID-19 pandemic has become an economic crisis as well, with the pandemic’s impacts reaching financial markets, as indicated in several ups and downs in share prices. In spite of such challenges, however, financial markets and institutions have pressed on and stood unwavering in performing their valuable roles in the economy.

BDO Unibank, Inc. (BDO), for its part, steadily serves its clients in the financial market as its products remain competitive and relevant.

Despite the volatility in the financial markets, the volume and returns on BDO’s investment funds have improved, with most funds outperforming their benchmarks. Such positive performance is reflected by its consolidated assets under management, which expanded by 22% year on year as of the third quarter of 2021. Moreover, the bank maintained its dominant position as it accounts for 38% of the market.

BDO’s participation in the capital markets cuts across several business lines, with its services involving investment banking, treasury, and wealth management.

BDO Capital and Investment Corporation (BDO Capital), the investment banking arm of BDO, continues to leverage on the bank’s extensive market knowledge and experience across a broad range of industries to service clients’ capital and funding requirements, as well as to support their recovery from the pandemic. Last year, BDO Capital participated in major equity and debt fundraising exercises, which include three initial public offerings and one follow-on offering.

The bank’s Treasury Group, meanwhile, supports the bank’s asset and liability requirements. The group’s portfolio strategy is to deploy funds prudently dependent on prevailing market conditions, invest selectively to build up its accrual portfolio, and tap longer-term funding sources to address BDO’s funding requirements.

In providing investment and wealth management services across the spectrum, BDO employs a segmented approach. The bank serves the high net worth segment through BDO Private Bank (BDOPB), while its Trust and Investments Group (TIG) and BDO Prime service, under BDO Securities, cater to the mass affluent segment.

Anchored on open architecture approach, these services allow clients to participate in a wide array of both local and global investment opportunities.

BDOPB creates bespoke solutions to meet clients’ unique investment requirements, which include anticipating client needs for higher-yielding instruments during the low-interest rate environment. With an emphasis on diversification, BDOPB was the first institution in the Philippines to adopt the open architecture approach, providing clients with access to investment opportunities beyond BDO proprietary products.

TIG, for its part, continues to seek alternative investments for clients to optimize their returns. This includes US dollar-denominated funds, which are offered as attractive investment outlets. Focused on propelling growth by further diversifying offshore investments, TIG is offering a variety of feeder Unit Investment Trust Funds (UITFs) to broaden foreign offerings and offer additional exposure to overseas capital markets. With these offerings, TIG maximizes on the recent performance of global equities as they provided better returns upon opening their economy earlier than emerging markets.

BDO Securities, on the other hand, aims to create a more comprehensive platform to serve both mass affluent and emerging affluent segments by providing a broader set of products and services that include equities, fixed income, UITFs, and mutual funds in both peso and US dollars. Notably, last year BDO Securities was ranked at #4 among Philippine Stock Exchange trading participants in terms of total value traded.

Alongside its broad approach in participating in the financial market, BDO likewise has a diversified and even upgraded menu of offerings for clients to avail of.

To address the evolving needs of its diverse clients, for instance, the TIG currently manages 25 different UITFs across a multi-asset, multi-currency, and multi-strategy platform.

In addition, BDO’s core offerings are regularly reviewed to strengthen its value proposition. As a result of these reviews, new products such as the BDO Money Manager and BDO Pension 360 were developed to address the growing needs of retail and institutional clients.

Further making BDO stand out in serving financial markets is its advocacy for socially responsible investing. Since 2015, it has made available the BDO ESG Equity Fund, the first Philippine investment fund that incorporates environmental, social, and governance factors in the selection of equity investments. The product responds to the demand of institutions, schools, non-profit organizations, and religious entities for a socially responsible fund.

BDO has taken this advocacy further through sustainability bonds. Recently, the BDO raised P52.7 billion-worth of Peso-denominated Fixed-Rate ASEAN Sustainability Bonds under its P365 billion Bond Program. This issuance, the first of its kind from BDO, is set to finance eligible assets under the BDO’s Sustainable Finance Framework.

For BDO, this is a new milestone as the bank exceeded its previous record of P40.1 billion for a single bond issuance. This is also by far the largest issuance for any Philippine financial institution or company.

These diverse and relevant offerings are coupled with BDO’s continuing support for the financial wellness and inclusive growth of its clients. The bank has a dedicated team that provides free financial education programs to clients. By educating Filipinos on the importance of investing to improve their financial well-being, BDO hopes to achieve the goal of converting Filipinos from savers to investors.

BDO’s various quality investment choices, put together with accessibility to new issues (through BDO Capital) and offshore investment outlets (via open architecture platform) and consistent above-industry performance, makes BDO a reliable brand in sustaining and boosting the financial market.

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