ProfileWilson Sy and the lessons of the winning Philequity...

Wilson Sy and the lessons of the winning Philequity Fund


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Wilson Sy is one of the most successful stockbrokers in the Philippines today. The eldest of four children, he grew up living above a small department store owned by his parents in the Carriedo district. His hardworking father and mother were able to send him to Xavier School, and later to Ateneo, where he was one of the first Management Engineering graduates, in 1975. This in itself was an achievement, as the course was so difficult, only about 20 members of the original four blocks did not transfer or flunk out.
Sy has just released a book, called Opportunity of a Lifetime, about investment lessons, both successes and failures, from the Philequity mutual fund. It makes for an interesting read, as the Philequity Fund, which he started in 1994, has emerged as the single most successful mutual fund on the market, with an average compounded annual return of about 20 percent to its shareholders, and outperforming the PSE index in 17 out of 20 years, since it was founded in 1994. In 2014, the PSE index grew 22 percent in value, while Philequity grew by almost 29 percent.

Outperforming the index is not particularly difficult when the market goes down. The index is forced to carry all of its component stocks (unless they become unlisted), whereas the minimally canny investor can drop the slower index stocks and choose better-performing ones. However, outperforming the index when the market goes up (as it has for the last decade or so) is a singular feat, especially when you consider that a mutual fund should not have a high risk appetite, in view of the fiduciary nature of its investments.

He talks about growth: “The mutual fund industry has grown so much. People are now investing in mutual funds. They realize that it’s better to entrust their investments to professionals. There’s not as much day trading, because of the taxes. For one, the minimum buy commission is 0.25 percent, then there’s the same commission to sell, and the stock transaction tax is 0.5 percent. So, right there and then, you have to hurdle one percent, which is not easy.”

We talked about the minimum 10 percent float level required of listed companies. “I talked to (SEC Chair) Teresita Herbosa, and there is a plan to increase the required float from 10 percent. I think, overall, this plan is correct, but how you do it, how you skin the cat, will make a lot of difference. If you just mandate it, and the public is not ready, and the market is not ready, it could result in a crash.
“What I told Chair Herbosa was that, on its own, the market will actually increase float, as needed. It’s market driven. During the first quarter, there was a big demand for shares. So there were a lot of secondary placements, thereby increasing the float. So, as it is, the market actually increased the float on its own. It’s a step in the right direction. In Asia, you have a preponderance of family firms, which is why public float is low, compared to the US, where management can be held by as little as two percent.”

Read more about the Philippine Stock Exchange, mutual funds, and Wilson Sy’s story inside Asian Dragon Magazine September-October 2015 cover feature. Grab a copy from all leading bookstores nationwide or purchase the issue from the Asian Dragon Magazine App, free for all Android and Apple devices.

[Photograph: Patrick Uy]


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