Later this month, you can start investing in local bonds for as low as P50 and international global funds for as low as P1000, says GCash CEO Martha Sazon. Photo from Unsplash
Culture

You can now invest your leftover GCash money in local bonds—but how far will it get you?

“Your financial goals will dictate where you should invest in,” says Ready to Be Rich blog founder Fitz Gerard Villafuerte  
RHIA GRANA | Feb 12 2021

With a great majority of Filipinos now doing financial transactions via the GCash app and holding a portion of the family’s funds via an e-wallet, Globe Inc.’s President and CEO Ernest Cu’s proposition sounds like the next best logical step, and a viable one at that.

The telco chief reposted GCash president and CEO Martha Sazon’s Facebook announcement recently: “We’ve made investing easy for every Filipino through GInvest. Later this month, you can start investing in local bonds for as low as P50 and international global funds for as low as P1000!”

The offer on Ms. Sazon’s FB post sounds tempting enough for a newbie investor to explore—“more than your savings rate and as much as 78% return on your money.” She also mentioned in the post that new funds will be made available to investors this month. Currently, there is only one type of fund available—money market fund, provided by mutual fund provider ATRAM Trust Corporation. This type of fund is said to be pretty safe, and offers low interests as well.

But Sazon says there will be more upcoming funds/companies for people to invest in. She enumerated them: PH Bonds, Global Technology (Apple, Microsoft, Samsung, Alphabet/Google), Consumer Funds (Amazon, Alibaba, Nintendo, Sea/Shopee, Activision Blizzard), and PH Equity (Top PH companies like Globe, Ayala, SM, etc.).

The instructional video that comes with her FB post looks like any regular GCash user can figure out how to use it. Although it could have been a little slower (but you can always rewind it, fine) and could use a voice-over feature annotating/explaining it. Reading through the beginner’s guide on GCashResource’s website, however, explains the parts one needs to know. 

Basically, what the service does is it allows GCash users to invest their e-wallet balance in investment funds that are made available by GInvest’s partner providers. Instead of having to pay a middleman to invest for you, the GInvest technology gives you this access for free. 

 

Is it a good investment option?

To understand the potentials of this investment tool further, ANCX got the insights of financial planner and “Ready to be Rich” blog https://fitzvillafuerte.com founder Fitz Gerard Villafuerte.

This guy used to be a civil engineer by profession, but he decided to quit being a corporate slave to pursue entrepreneurship. Why? To have more time—to spend with his family and friends, to travel, to do his hobbies, to learn new things, and to sleep. He did this by investing in passive income, among other things, and he is a huge believer in investing.

Villafuerte says this technology makes investing more accessible to everyone. “With only P50 as minimum investment, it’s the lowest investing barrier [meaning, the most affordable investment] I’ve seen in the local market,” he notes. “Hopefully this encourages more Filipinos to start investing and remove the misconception that one needs a lot of money to start investing.”

Villafuerte, who authored the book “The Ready to Be Rich Guide to Investing,” believes we should make it a habit to invest, and for this to be feasible and possible, we have to make it convenient for ourselves.

He says there are several existing apps—local bank mobile apps included—that allow us to conveniently invest through our phones. Unfortunately, not many Filipinos are aware of it. So the entry of GInvest in the financial market, he says, could possibly encourage many to also look into these other apps and mobile investing features.

 

Things to consider

The first advice Villafuerte gives is: Invest with a financial goal in mind. “Ask yourself why you are investing? Where will you use the money? When do you need the money? Your financial goals will dictate where you should invest. Because the ‘best investment’ does not exist, but there’s the best investment that can help you achieve your financial goals.”

He says if people believe that the ATRAM funds inside GInvest can grow their money at a rate that will allow them to reach the target amount they need to afford their financial goals, then that’s where they should invest in. 

According to its website, the ATR Asset Management Group (ATRAM or ATRAM Group) operates through ATR Asset Management, Inc. and the ATRAM Trust Corporation. As for the company’s track record, Villafuerte says the company manages some of the best-performing funds in the Philippines while ATRAM Trust is the first stand-alone trust corporation in the Philippines. 

You can learn more about their performance over the years through this link. https://www.atram.com.ph/funds/selector/ATRPHMM

 

What a GInvestor can expect?

Like any investment, expectations would of course depend on which fund you’ve invested in and for how long. The longer you’re invested, the higher the earnings, says Villafuerte.

For the conservative funds, that would be around 1-3% per year; for moderate it’s 4-8% per annum; and for aggressive, it’s 8-12% per annum.

Like what he mentioned earlier, your classification as an investor would also depend on when you plan to redeem your investments: conservative: 2 years or less; moderate: 3-7 years; aggressive: 7+ years.

The Money Market Fund that’s available right now via ATRAM is for conservative investors. But once the other funds become available, there will be more choices for moderate and aggressive investors.

 

The risks

Like any form of investment, putting your money in GInvest also has risks. “As an investment, these are not guaranteed and there will be years when it’s negative,” Villafuerte points out. “But those are just paper losses, you just have to wait until the market goes up again.”

Villafuerte says, “It’s important to know when you need the money, because if you plan to use the money next year for example, then you should avoid investing in aggressive funds because the chances that you’ll lose money is higher than if you put it in a conservative fund.”