2. Benefits of managed Funds - Professional Management

Covid-19 ushered in the "New Normal" - under this new economic environment some companies that used to do very well may be faced with challenges that it may not be able to overcome, this could lead to losses and at its worst the closure of the business.

It is during this time of market-wide uncertainty that the benefit of "professional management" is truly valued, of the hundreds of companies listed in the Philippine Stock Exchange, which companies have the strategy and capability to adjust? Going through the financial health of companies of these hundreds is not an easy task and it would take a professional to review these data on a full-time basis.

For a typical equity fund - which would be invested in dozens of companies. One of the tasks of the fund manager is to review and re-balance the portfolio on a regular basis based on a set of performance parameters.

One common parameter is for companies to generate at least 8.0% ROE (Return on Equity) per year to be included in the portfolio.

Companies not able to adjust to the new normal may see their ROE fall below this standard because of lower earnings, as a result, these companies will be taken out and replaced with companies pivoting successfully.