Comparing The Performance Of An Index Fund vs Other Equity Funds - Or Which Fund Gives The Highest Return

Comparing The Perfomrance Of An Index Fund vs Other Equity Funds - Or Which Fund Gives The Highest Return  BPI ALFM Philippine Stock Index Fund vs BDO Equity Fund vs FAMI's Save & Learn Equity Fund vs PhilEquity Fund. Which equity fund gave the highest return in 1 year? in 5 years?
A while ago, I wrote a post on index funds. I also gave my reasons for preferring index funds over other actively-managed equity funds.

So in this post, I will check if my reasoning is still valid.

We will compare the Index fund over various other popular funds.

So without further ado, let's see how the different funds have performed:
(all data are taken from the various funds' official site. except for FAMI, which doesn't provide such data, so I had to get historicals from Bloomberg.)

1 Year performance
Aug. 2, 2012 - Aug. 2, 2013

BPI ALFM Philippine Stock Index Fund: 20.00%
NAVPU: 582.42 to 728.06

BDO Equity Fund: 26.45%
NAVPU: 320.7480 to  405.5895

FAMI's Save & Learn Equity Fund: 16.23%
(which generally performs better than Metrobank's Equity Fund uitf)
NAVPU: 4.5281 to 5.2628

PhilEquity Fund: 22.17%
NAVPS: 25.9812 to 31.7421

5-Year performance
Aug. 1, 2008 - Aug. 2, 2013

BPI ALFM Philippine Stock Index Fund: 158.12%
NAVPU: 282.06 to 728.06

BDO Equity Fund: 172.42%
NAVPU: 148.8863 to 405.5895

FAMI's Save & Learn Equity Fund: 208.58%
NAVPU: 1.7055 to 5.2628

PhilEquity Fund: 209.37%
NAVPS: 10.2604 to to 31.7421

*note: FAMI's data is not 100% accurate beause their official site does not provide data for historical NAVPUs (a shame since they look like they did really well, and could use for better convincing power). I had to use data from Bloomberg, but the earliest I could get was for Aug. 05, 2008. So they may actually have given a slightly higher return, though I doubt it would be that much more.


- Invest for the long term! 50% returns seem paltry compared to 200% for just a 5-year wait. What more for 10, 20, or even 30 years!? I really should've learned to invest when I was 16. I'd probably be pretty set right now. Do your family and friends a favor: teach them to invest - now!

- Don't chase the current market leader. You can, but it doesn't guarantee "winning" in the long run. When we previously compared which equity fund was better, we looked at it the short-term fluctuations. It was indicative of how they behave (wild swings or not, resilient or not), but long-term performance still rules. BDO won that last comparison handily, but long-term wise PhilEquity and FAMI are kings.

- My index fund theory seems shaky. It's doing pretty well for the past year, but it really lags long-term. I may have to do 10-year or even 20-year comparisons to be sure (though it's hard to get that data over the internet). But I may have to entertain the idea that the "index wins in the long run" theory may not be as true here as in the U.S.

- These numbers are net of fees (since NAVPS are net of fees and were used as basis). I prefer low-fee funds though it seems that is another U.S.-centric theory. The logic holds. But here in the Philippines low fees aren't that low (an index fund in the U.S. can have as low as 0.5% management fee per annum vs 1.5% here). While high fees aren't that high (In the U.S., as high as 5% sales load up front and upon redemption, aside from management vs. waived back-end sales loads after 5 years here, with management fee at just 2.5% max, usually less.)

- I compared the index against the "big boys" of the equity world. It might have looked better in comparison with some of the other funds and uitfs. But we want the best of the best right?

- Lastly, these numbers should still change, and the results could reverse. But even if that happens, it would still hold true that investing long-term is very profitable. So don't bother trying jumping from fund to fund or going in and out of one fund as if it were the stock market. Stay long term. Even if you made a "mistake" you still doubled your money, so how is that really wrong?

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  1. ang mahal ng fees ng BPI 1.5%, nkakahinayang lalo na kung long term investor ka. My U.S. Index Fund ETF only cost 0.05% (here you mentioned that it's 0.5%)

    I'm a proponent of Index Fund and I never bought any active mutual fund and and foremost because of the cost. Sa active mutual fund I take 100% of the risk, yet not get 100% of the profit and that's I feel is not fair.

    1. I didn't realize it reached that low in the U.S.

      But I think an ETF has even lower fees than traditional funds, even for Index Funds.

      No question though, Index Funds in R.P. are definitely not low cost.

    2. In my opinion, konti pa lang kasi ang nakakaalam ng Mutual Fund sa Pinas kaya hindi pa ganon ka-competitive ang management fee unlike sa US. I hope dumating ang time na less than one percent (or even lower) ang management fees.

    3. I guess that makes sense. Aside from transactional costs, they also have some fixed costs like salary, utilities, etc. So higher revenues (more investors/subscribers) might make it painless to charge less.

      I'm thinking it would probably take an aggressive new-comer (like sun cell when it came out) to get them to jump though.

  2. If one has only ten years to live and one only started late to invest in funds, then the choice is to subscribe to funds not adhering closely to the stock exchange index.

    That is why one has got to get started young, in order to have a lot of cash from index funds when one is old.

  3. hi, what index fund co. would you recommend to me that has the lowest cost like fees and charges? I'm from Cebu City pls email me personally at