Are Philippine Fixed Income Fund Managers Generating Alpha for Their Clients‪?‬

INTRODUCTION Mutual funds, also known as investment companies, are pooled investment vehicles managed by an asset management firm that seeks to create value for shareholders through tactical allocation of investor funds in various asset classes or in securities within a particular asset category. Typically, mutual funds are classified based on investment style, and can be broadly identified as either a fixed income fund, an equity fund, or a balanced fund (combination of fixed income and equity instruments), depending on the specific assets the fund is allowed to invest in (as stated in the fund's prospectus). Investors consider mutual funds to be a viable alternative to direct investments in equity and debt securities due to a number of benefits that can be derived from pooled fund-investing, which include, but are not limited to, easy liquidity, economies-of-scale, access to otherwise inaccessible markets, diversification, and management of funds by a skilled and knowledgeable investments practitioner.