Are you looking for the best index funds to invest in the Philippines in 2023? Check out the complete list of the best-performing index funds below.
Index funds are among the most brilliant investments created for investors who prefer investing in numerous assets in one fund.
Because of the simplicity and effortless way to invest in index funds, they are also among the favorite passive income-generating assets of many traders and investors.
If you are a beginner investor of index funds, make sure you read the complete guide here: “How to invest in index funds?”
Benefits of Investing in Index Funds
- Low expense ratio
- Less risky than individual stock
- Managed by experts
- Wide selection of funds
Types of Index Funds Available in the Philippines
You can open an index fund in the Philippines through the following investment accounts:
- Mutual Fund
- UITF (Unit Investment Trust Fund)
- Index Feeder Fund
- PERA (Personal Equity Retirement Account)
How to Invest in Index Funds in the Philippines?
Step 1: Evaluate your risk profile
Index funds are easy to invest, but investors must first evaluate their risk profile before opening an index fund because these assets are primarily for aggressive investors.
Equity index funds follow a particular stock market index or benchmark; thus, you must accept the stock market’s risks and volatility factors.
Step 2: Choose your index fund
Since an index fund copies or tracks the performance of an index, you must choose your preferred index fund that mirrors your target stock market index.
If you are investing in stocks in the Philippines, you would want to track the investment result of the Philippine Stock Exchange Index (PSEI).
If you invest in global or international stocks, you would want to invest in feeder funds because they invest in world equities.
The complete list of available index funds in the Philippines is displayed below. You can use it as a guide together with the most excellent index fund in 2023.
Step 3: Buy shares of your index fund
Suppose you have an online trading account in the Philippines or a stock brokerage account, like COL Financial, BDO Securities, FirstMetroSec, and BPITrade. In that case, you can already start buying shares of your chosen index funds.
Otherwise, you can invest in an index fund through your bank’s UITF index funds or feeder funds.
Another way to start an index fund investment in the Philippines is through a mutual fund company like Sun Life, Philequity, and ALFM Mutual funds.
Step 4: Set your target period or target profit
Most index funds are long-term driven because they are primarily allocated in equities traded on the Philippine stock exchange. So, your target period must be suitable for one year or more to maximize the growth potential of your fund.
Alternately, you may set a target profit instead of a target period if you prefer to lock in your earnings whenever you want. Consider the expense ratio or redemption fee when you do this method.
Step 5: Hold your shares of index fund
Hold your shares of the index fund until your target period or target profit. Historically speaking, equities in the Philippines tend to grow over time, so you have to be more patient.
Step 6: Sell or redeem your shares of index fund
There comes the time when you have to let go of your shares of index funds to realize your profit. Sell your shares or redeem your units of index funds.
Best Performing Index Funds in the Philippines in 2023
|Index Fund||Type||ROI (YTD)|
|SB Asia Ex-Japan Equity Index Feeder Fund (Class F)||UITF||9.85%|
|SB Asia Ex-Japan Equity Index Feeder Fund (Class A)||UITF||9.83%|
|BDO Global EM Equity Index Feeder Fund||UITF||9.71%|
|BDO Developed Markets Property Index Feeder Fund||UITF||8.91%|
|SB US Technology Equity Index Feeder Fund||UITF||7.97%|
|PRUInvest PH Equity Index Tracker Fund (Class V)||UITF||7.37%|
|PAMI Equity Index Fund||Mutual Fund||7.33%|
|Philequity MSCI Philippine Index Fund||Mutual Fund||7.32%|
|Philippine Stock Index Fund||Mutual Fund||7.29%|
|Philequity PSE Index Fund||Mutual Fund||7.25%|
|Sun Life Prosperity Philippine Stock Index Fund||Mutual Fund||7.25%|
|PRUInvest PH Equity Index Tracker Fund (Class A)||UITF||7.21%|
|PRUInvest PH Equity Index Tracker Fund (Class I)||UITF||7.15%|
|COL Equity Index Unitized Mutual Fund||Mutual Fund||7.13%|
|Metro Philippine Equity Index Tracker Fund||UITF||7.12%|
|Robinsons Bank Equity Index Feeder Fund||UITF||7.10%|
|First Metro Save and Learn Philippine Index Fund||Mutual Fund||6.99%|
|BDO Global Equity Index Feeder Fund||UITF||6.97%|
|ATRAM Philippine Equity Smart Index Fund||UITF||6.84%|
|UnionBank PSE Index Tracker Fund||UITF||6.06%|
|EastWest PSEi Tracker Fund||UITF||6.08%|
|BPI Invest Philippine Equity Index Fund||UITF||6.06%|
|BDO PERA Equity Index Fund||PERA||6.05%|
|BPI Invest Philippine Consumer Equity Index Fund||UITF||6.05%|
|BDO Equity Index Fund||UITF||6.04%|
|SB Philippine Equity Index Fund||UITF||6.01%|
|China Bank Philippine Equity Index Tracker Fund||UITF||6.00%|
|PNB Phil-Index Tracker Fund||UITF||5.99%|
|UCPB Philippine Index Equity Fund||UITF||5.60%|
|RCBC US Equity Index Feeder Fund||UITF||4.42%|
|EastWest S&P 500 Index Equity Feeder Fund||UITF||4.25%|
|Sun Life Prosperity World Equity Index Feeder Fund||Mutual Fund||4.06%|
|BPI Invest Philippine Infrastructure Equity Index Fund||UITF||3.37%|
Past performance is not a guarantee of future performance.
FAQ About Investing in Index Funds in the Philippines:
What is the best index fund in the Philippines?
The best index fund in the Philippines is Sun Life Prosperity Philippine Index Fund because it tracks the Philippine Stock Exchange Index (PSEI) 100%. The minimum subscription of P1,000 is also very affordable. There is zero early redemption fee. Its performance is also outstanding with other mutual funds in the country.
What is the best index fund for beginners?
The best index fund for beginners is Vanguard S&P 500 ETF (VOO) because it tracks the S&P 500 index, which is composed of the most prominent stocks in the USA. Its expense ratio of 0.03% is among the cheapest on the market. It has a 1.71% dividend yield and a 3-year total return of 31.70% (amidst market slowdown).
How to earn money by investing in index funds?
An investor can earn money investing in index funds through dividends and when the value of the index fund units or shares grows over time. An effective strategy is needed to help the investor to reach his capital objectives and goals.
How to invest in Vanguard index funds in the Philippines?
Vanguard index funds are one of the world’s most successful investments. You can also invest in Vanguard index funds while you’re in the Philippines by opening a Vanguard account or by using an online trading platform that offers Exchange-Traded Funds (ETF).
Disclaimer: This article is for information purposes only and should not be considered as a professional advice or an endorsement of a particular investment. All investments have risks. Risk only the capital you’re not afraid to lose. Always do your own research before investing. Past performance is not an indication of future results.