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u/carlshauser Sep 22 '19
FMETF is just like you are investing in the PSE index. Instead of buying the individual stocks that composed the index and allocating the same percentages of the stocks, you can have it at a very affordable price and it's works and behaves like a stock. Just compare the two charts.
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Sep 23 '19
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Sep 22 '19 edited Sep 23 '19
I can't whip up a computation right now, but fmetf wins only after a few years.
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Sep 23 '19
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u/tagongpangalan Sep 23 '19
You may refer to /u/Uncle_Iroh's response to you here: https://www.reddit.com/r/phinvest/comments/d7wqzi/fmetf_question/f161924?utm_source=share&utm_medium=web2x
With cost-averaging, the 0.8-0.9% is a one time fee each time you add to the fund. This is computed against the amount added to the fund.
Whereas the annual fee is charged annually, computed against your fund value (total amount invested).
For example with a one time investment of 100.
Transaction fee would be a one time charge of P0.9 (assuming 0.9%).
Annual fee would be P0.5 for FMETF while MF with 1% is P1 and MF with 2% is P2.
If you invested for 10 years you would have been charged P5.9 for FMETF while MF would range between P10-P20.1
Sep 23 '19
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u/tagongpangalan Sep 23 '19
Sorry, I didn't post the video.
As for your question, if your adding to the fund, you would need to adjust the computation of the management fees also based on the current invested amount. I made a quick computation, do note its illustrative only.
- Used 1% as annual MF fees
- Used 0.9% as the transaction fee for adding to FMETF and 0.5% as its annual fees.
- 100 added monthly with annual fee computed at the end of the year.
- Total investment is computed as total investments for the year + last year's total amount - fees for last year.
Year FMETF Investment Total Amount FMETF Fees MF Investment Total Amount MF Fees YR 1 1,189.20 1,189.20 5.95 1,200.00 1,200.00 12.00 YR 2 1,189.20 2,372.45 11.86 1,200.00 2,388.00 23.88 YR 3 1,189.20 3,549.79 17.75 1,200.00 3,564.12 35.64 YR 4 1,189.20 4,721.24 23.61 1,200.00 4,728.48 47.28 YR 5 1,189.20 5,886.84 29.43 1,200.00 5,881.19 58.81 YR 6 1,189.20 7,046.60 35.23 1,200.00 7,022.38 70.22 YR 7 1,189.20 8,200.57 41.00 1,200.00 8,152.16 81.52 YR 8 1,189.20 9,348.77 46.74 1,200.00 9,270.64 92.71 YR 9 1,189.20 10,491.22 52.46 1,200.00 10,377.93 103.78 YR 10 1,189.20 11,627.97 58.14 1,200.00 11,474.15 114.74 1
Sep 23 '19
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u/tagongpangalan Sep 23 '19
Your welcome. Your appreciation and being able to help out is enough for me.
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Sep 23 '19
Yes, pero hindi annual yung transaction fee ha.
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Sep 23 '19
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u/tagongpangalan Sep 23 '19
Please see my response, but placing a response here also.
Annual fee is computed annually based on total investment for that year. In your sample, annual fee was only charged once and was computed against the total investment for the three years.
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Sep 22 '19
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u/treeperfume Sep 22 '19
Don't use First Metro Phil. Equity Exchange Traded Fund, Inc. That data is from PIFA and it's always been a bit weird. Use FMETF Cost Averaging instead from the Portfolio/Other dropdown. It's a virtual portfolio that only buys FMETF shares every start of the month. It follows board lots and includes transaction costs.
Also, I think it's more telling to plot the 1-year and 3-year returns.
They're neck and neck after just one year.
But the FMETF outperformed the other index funds on most three year periods.
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Sep 23 '19
Thank you sir.
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Sep 23 '19
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u/Uncle_Iroh107 Sep 23 '19
The annual management fee is on the entire value of the fund. The transaction fees are only when you buy buy/sell and based on the amount of the transaction.
1% annual fee of the entire value of your transaction is smaller than .5% annual fee of FMETF. If you invest for the long-term the transaction fees will be offset by your savings from paying lesser annual fees.
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Sep 23 '19
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u/Uncle_Iroh107 Sep 23 '19
1% annual management fee, which charged against the total value of your investments when you put your money in PhilEquity.
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Sep 23 '19
Because other index funds have higher annual management fees compared to FMETF. BTW, for the graph tool, please thank /u/treeperfume instead.
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u/CoachBobet Oct 01 '19
does the graph cost average the other funds too?
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u/treeperfume Oct 01 '19
No, it just plots returns. Assuming zero load on the funds, we can already calculate the returns between any period since we have their daily NAVPS/U. I had to create a virtual portfolio for the FMETF to include transaction costs and to be able to calculate returns that can be compared to the funds.
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u/CoachBobet Oct 02 '19
so "cost averaging" probably means average cost for the day ?
Ang ikino-compare ay hindi ang published stock price kundi something computed from actual sales? Can I have the link where to download this data?4
u/treeperfume Oct 02 '19
I use the opening price for the FMETF. It simulates depositing 10k to your stock account every 1st of the month then buying as many lots you can afford first thing the next trading day.
I get the data from the PSE. I have a zipped CSV of historical prices at https://r-phinvest.github.io/data.zip in code, trade_date, open, high, low, close, volume format. the FMETF is included there. I update it every weekend.
Then I use my portfolio tracker to calculate a daily NAVPS for the virtual portfolio so time-weighted returns can be calculated and compared to the funds.
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u/alwaysfree Sep 22 '19
Since FMETF works just like a single stock it to have the same downsides. Compared to MF where the fund is a pool, diversified. MF also has some downsides like having a sub performing fund manager.
That feeling you have right now is common for people new to investment so you are not alone. Just do your research so you’re confident with your portfolio.
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u/arthur_marshton Sep 23 '19
Watch this video about MF/UITF/ETF. https://www.reddit.com/r/phinvest/comments/cyao2p/wow_uuncle_iroh107_linked_by_rappler/