Insular Life, the largest Filipino-owned insurance company, has introduced a new fund to temper stock market volatility.
The Money Market Fund, is the newest fund that is available for the company’s variable unit-linked insurance products. The Money Market Fund offers a portfolio of highly liquid, but less volatile, investment securities that aims to preserve the principal invested and at the same time maximize yields for the short-term
“The Philippine stock market’s movement cannot be predicted, but the investor can always manage its effect on his investment portfolio,” said Insular Life’s First Vice-President and Business Development Unit Head Alijeffty Gonzales.
The fund – available for peso and dollar investors – is being invested in time deposits and short-term promissory notes. The Money Market Fund, combined with the Equity Fund of Insular Life, is useful in adopting an asset allocation strategy for one’s investment portfolio. This strategy calls for investing in a combination of equities and money market instruments, with the mix depending on the time an investor will need his or her money.
“If you need the funds in about five years, 40 percent will be money market, 60 percent equities. But if you’ll need it in about 10 years or so, 20 percent money market, 80 percent equities,” said Gonzales.
He encourages policyholders to review the fund’s performance every six months “If the market went up, we take the profits by shifting the returns to the money market fund. If the market went down, we cost average by putting in money to the equity fund” he said.
VUL products play an important role in one’s portfolio. More than delivering returns, it also provides insurance protection, such that whatever happens, the family is protected from the risk of income loss. No other financial instrument addresses this.” Gonzales added.