I got this email from Security Bank (PSE: SECB) promoting their SB US Equity Index Feeder Fund (this is not a paid promotion by the way, I wish!). The caption further read “the US Equity Feeder allows you to invest in world’s biggest economy.” So naturally I got curious and here I am sharing what I have so far:
US EQUITY INDEX FEEDER FUND
First off, what is a feeder fund? Simply put, it is a managed fund that aims to track the performance of another set of assets, such as for this case, the stocks included in the US equity index. Many Philippine banks have UITF of PSEI feeder funds. Per Investopedia,
“A feeder fund is one of a number of funds that put all investment capital into an overarching umbrella fund that is called the master fund, for which one investment advisor handles all portfolio investments and trading.”
Anyway, for this purpose, SECB aims to benchmark the performance of their UITF with the CRSP US Total Market Index. Minimum investment for individuals is USD1,000 (~PHP53,000 given our current exchange rates). It will also require a dollar denominated bank account as the depository account (usual for foreign denominated investments). Below are the top 10 holdings of the fund that SECB will aim to replicate / feed from:
This allows retail investors to have exposure in the big international companies, the global ones, especially the tech stocks whose growth potential are very promising, as their operations are becoming more and more global. Especially now that performance of our local stocks are not that good at the moment, this can provide us more options, and have investments as well in the biggest countries. Talk about being a global investor right?!!
For more details on the US Equity Feeder, click here. They also have Global Equity Index, tracking performance of stocks baskets in various countries (US, Japan, UK, Canada, etc). Click here for more details.
To be fair with other banks, they also have similar managed funds too:
- BPI (PSE: BPI): US Equity Index Fund, European Equity Feeder Fund, Global Equity Fund of Funds
- BDO (PSE: BDO): Global Equity Select Feeder Fund, Developed Markets, China Equity, Europe, etc
- MBT (PSE: MBT): World Equity Feeder, S&P500, Japan, Europe, etc
You may also contact your preferred bank or visit their websites.
TRADE FOREIGN STOCKS AND FOREX ON YOUR OWN
There are also online trading platforms which can allow retail investors to trade stocks, forex, even cryptocurrencies, similar to what we do for online trading Philippine stocks. I’ve always dreamed of owning just a minute portion of the global brands such as Google, Facebook, Apple, Unilever, etc. Now it is slowly coming true, and the best part is I can trade in and out of these companies!
Personally, I’m using and been exploring eToro for the past few months now. I was able to sign-up purely online, just uploaded a few documents, and voila, I can now trade online (via mobile or desktop). I do sending of funds via Paypal and Credit Card (I don’t think they accept bank transfers from Philippines yet).
Likewise, trading foreign stocks and forex allows Juan:
- To do short selling if the opportunity presents itself
- Set trailing stops and cut losses too! Isn’t that cool?
- To trade using margin (to amplify your gains by borrowing capital, for those with little capital to trade). Note that there are fees involved in trading using margin, and of course, if the trade goes south, losses get amplified too.
This is literally and figuratively money never sleeps, well because most of the big markets are on another time zone, and because if we do this well, we can make money work harder for us even while we sleep.
Above is my watchlist from eToro. Honestly, it is exciting to test the waters to trade these big names but likewise, the stakes are higher since the investment is in dollars.
Don’t get too excited though. Definitely there will be fees, risks involved, etc. Remember, your capital is at risk here. Proceed with caution. As always, caveat emptor. Another popular platform that I see from the forums I belong to is Oanda. I’m sure there are other platforms out there, some I even see advertising in this site (e.g. FXCM etc). Do you have other recommended online trading platforms for international stocks and forex? Let me know in the comments below!
Trading and investing are just some of the investments to make your money work hard for you. There are many other alternatives, many money hacks used by the rich. Learn more about these by downloading our #10Steps to a Richer Life.
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PS. We have an additional domain: Rich Money Hacks. The previous one, Investment Juan-01 remains very much active though, just another gateway to our contents. Same goal, same advocacy, more cool stuff for our richer lives!
Be money smart. Make your money work for your richer life.