Enterprise Risk Management

The investment objective of the FMETF is to provide returns that closely reflect the performance of the Philippine equities market by investing in a basket of securities included in the Philippine Stock Exchange Index (PSEi).

The FMETF employs a passive investment strategy that replicates the composition of the PSEi. The Fund constructs its portfolio to match the index’s constituent securities and their respective weightings, allocating investments proportionately to the Fund’s net asset value invested in equities. This approach ensures that the Fund’s performance and risk profile closely mirror that of the underlying index.

As the FMETF’s constituent securities comprise the largest capitalized and most actively traded stocks in the Philippine stock market, liquidity concerns are generally not anticipated. In the event of redemptions, the Fund Manager may redeem ETF shares by selling the underlying securities in the portfolio.

Risk Considerations:

While the FMETF is designed to track the PSEi, investors are exposed to certain risks, including but not limited to:

• Market Risk: The value of the Fund may fluctuate in response to market movements affecting the PSEi.
• Tracking Error Risk: Fund performance may deviate from the index due to fees, expenses, or operational factors.
• Liquidity Risk: Although the underlying securities are among the most liquid in the market, extreme market conditions may still impact liquidity and valuations.
• Concentration Risk: Exposure is limited to the constituents of the PSEi, which may result in sectoral or issuer concentration.

Governance and Compliance:

​​​​​​The FMETF is managed in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), the Philippine Stock Exchange (PSE), and other applicable laws. The Fund adheres to strict investment guidelines, investing exclusively in PSEi constituent securities and rebalancing in line with index changes. No leverage or speculative trading strategies are employed. Governance, compliance, and risk oversight are exercised by the Fund Manager under Board-approved investment and risk management policies, with periodic reporting to ensure transparency and investor protection.

Disclaimer: Past performance is not indicative of future results. Investors are encouraged to assess their risk tolerance, investment objectives, and time horizon before investing in the FMETF.