Global Diversification: Investing Beyond Local Markets
The Philippine economy, like any other, has its ups and downs. While the country may experience growth, it is vulnerable to local risks like inflation, political instability, and natural disasters. By diversifying globally, you spread your risk across different markets and reduce your exposure to any single country’s economy.
Reducing Country-Specific Risk
Investing solely in the Philippines means your portfolio is influenced heavily by domestic factors like inflation, interest rates, or currency fluctuations. For instance, the peso's weakness against the dollar can impact the value of international goods, making it harder for local companies to grow. Investing globally exposes you to markets that might not be affected by these issues, minimizing risks tied to the Philippines.
Access to High-Growth Markets
While the Philippines has a promising growth trajectory, other markets, such as the US and China, may offer higher growth rates in certain industries. Sectors like technology, healthcare, and clean energy are growing rapidly abroad. Investing in global funds gives you exposure to high-growth sectors that may not be as strong locally.
How Can A Filipino Investor Diversify Globally?
In the past, it was difficult for ordinary Filipino investors to gain exposure to global markets. Today, platforms like Seedbox.ph, GCash, and Maya Funds make investing in international funds easier than ever. These platforms provide access to various feeder funds that lets Filipinos invest in various securities around the world.
Seedbox.ph
Seedbox.ph is a digital investment platform that allows users to invest in a variety of funds, some of which offer global exposure. For instance, Seedbox features feeder funds from ATRAM that invests in global equities, bonds, and diversified portfolios, including assets from both developed and emerging markets. This allows Filipinos to invest in companies like Apple, Amazon, and Tesla, which are hard to access through PSE-listed stocks.
GFunds and Maya Funds
GCash and Maya have revolutionized investing for Filipinos, providing a low-barrier entry to investment funds directly through their mobile apps. With as little as PHP 50, you can invest in funds offering a mix of local and global assets. GCash’s “GFunds” feature includes global equities, while Maya offers similar options through its “Maya Funds” feature.
For example, through GFund’s ATRAM Global Equity Opportunity Feeder Fund, a Filipino investor can easily access a portfolio of global companies without needing a brokerage account. Maya also offers funds that provide international exposure, investing in sectors like technology, healthcare, and consumer goods through Maya Funds.
What is a Feeder Fund?
A feeder fund is a type of investment fund that collects money from investors and puts it into a bigger fund, known as a master fund. This setup makes it easy for investors to gain access to global markets or specific sectors through one local fund.
For example, a feeder fund in the Philippines might invest in a master fund that holds U.S. stocks or European bonds, allowing Filipino investors to diversify internationally without opening foreign accounts.
Balancing Local and Global Investments
While global diversification offers numerous benefits, maintaining a balanced portfolio is still important. Investing in local assets provides familiarity and can be beneficial during periods of Philippine economic growth. A well-balanced portfolio may include both local investments—such as blue-chip companies listed on the PSE—and global investments, giving you exposure to different economic cycles and industries.
How To Globally Diversify Your Investment: A Portfolio Example
Local Exposure: Invest PHP 1,000 in a Philippine equity fund through Seedbox.ph or GCash, focusing on local blue-chip companies like SM Investments, Ayala Corporation, and Jollibee Foods Corporation.
Global Exposure: Invest another PHP 1,000 in a global equity fund through Seedbox.ph, GCash, or Maya, gaining exposure to international tech giants like Amazon, Alphabet (Google), and Microsoft.
This combination gives you both the stability of local businesses and the growth potential of international markets.
The Risks of Global Diversification
While global diversification offers many benefits, it’s not without risks. Political instability in foreign countries and differing regulatory environments can all affect the performance of global investments. However, these risks can be managed by choosing well-diversified funds that spread investments across multiple countries and sectors. Funds available through Seedbox, GCash, and Maya are typically managed by professional fund managers who balance risk across various regions and industries.
Conclusion: Take Advantage of Global Diversification
Global diversification is essential for any investor looking to reduce risk and explore new opportunities beyond domestic markets. Platforms like Seedbox.ph, GCash, and Maya Funds make it easier for Filipinos to invest globally, offering access to a wide range of funds that include local and international exposure.
Ready to diversify your portfolio and explore new opportunities? Start investing with Seedbox.ph, GCash, and Maya Funds today! By balancing local investments with global assets, you not only safeguard your portfolio from domestic risks but also unlock pathways to thrive in today’s interconnected economy. Embrace the world of opportunities beyond the Philippine market, harnessing global growth to secure and elevate your financial future.