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					                                                            BPI Premium Bond Fund
                                                             As of June 30, 2011
                                                            Investment Objective                                                                                                              Fund Facts
                                                             To achieve capital appreciation and income derived from a diversified portfolio of primarily                                      Launch Date                              April 4, 2005
                                                             medium-term fixed income instruments.                                                                                             Structure                                Unit Investment Trust Fund
                                                            Fund Performance                                                                                                                   Fund Type                                Intermediate Term Bond Fund
                                                                     Absolute Returns                          Fund                              91-Day Treasury Bills                         Client Suitability                       The Fund is suitable for investors with at least
                                                                      Year-to-date                            0.84%                                     0.45%                                                                           a moderately conservative risk profile.
                                                                         2010                                 7.31%                                     3.20%                                  Base Currency                            Philippine Peso
                                                                         2009                                 3.96%                                     3.65%                                  Minimum Initial Investment1              Php 10,000
                                                                         2008                                 3.95%                                     4.26%                                  Minimum Transaction1                     Php 1,000
                                                                         2007                                 6.20%                                     2.68%                                  Minimum Holding Period                   90 calendar days
                                                                         2006                                 13.64%                                     4.41%                                 Early Redemption Fee                     0.25%
                                                                  5Yr Annualized ROI                          6.90%                                     3.56%                                  Trust Fee2                               1.50% per annum
                                                              Returns are net of fees. Past Performance is not an indication of future returns.                                                                                         0.37% per quarter
                                                            Net Asset Value Per Unit                                                                                                           Custodianship Fees3                      0.003%
                                                                                                                                                                                               External Audit Fees4                     0.02%
                                                            160
                                                                                  Fund                                                                                                         Special Expense5                         Php 2,000 per annum
                                                            150                   91-Day Treasury Bills                                                                                        Valuation Methodology                    Mark-to-Market
                                                                                                                                                                                               Trustee and Fund Manager                 Bank of the Philippine Islands
                                                            140                                                                                                                                Available Thru                           Bank of the Philippine Islands Branches
                                                                                                                                                                                               Custodian                                HSBC
                                                            130                                                                                                                                External Auditor                         Isla Lipana & Co.
                                                                                                                                                                                               Dealing                                  Daily up to 12 noon
                                                            120
                                                                                                                                                                                               Bloomberg Ticker                         BPIPRUI PM
                                                                                                                                                                                               1Contribution rounded down/ redemption rounded off to the nearest whole unit.
                                                            110
                                                                                                                                                                                               2Trustfees paid for the quarter as a percentage of average daily NAV for the quarter.
                                                                                                                                                                                               3Custodianship  fees billed for the quarter as a percentage of average daily NAV for the quarter.
                                                            100                                                                                                                                4External Audit fees as a percentage of end-year 2008 NAV.
                                                                                                                                                                                               5For publication expense




                                                                     Net Asset Value                                                                  Php 5.17 Billion                        Portfolio Composition
                                                                     NAV Per Unit (NAVpu)                                                             Php 151.02
                                                                     Par Value                                                                        Php 100.00                                                     Corporate Bonds
                                                                                                                                                                                                                           3%
                                                                                                                                                                                                                                                                Deposits and Other
                                                                                                                                                                                                                                                                   Receivables
                                                            Fund Manager's Report                                                                                                                                                                                      60%
                                                              Monthly Commentary
                                                                  June saw mixed movements in peso yields, though on the average, rates decreased by 10bps. The short- and the long-                                 Government
                                                                  end of the yield curve increased 29bps and 9bps respectively, while the 2- to 7-year tenors decreased by 51bps. The                               Securities - Long
                                                                  short-end yields continued to increase on the back of lackluster demand for Treasury bill auctions for the month with the                           Term 22%
                                                                  Bureau of the Treasury (BTr) awarding only PHP9.8 Bn out of PHP18 Bn up for offer. The greater than 10-year tenors
                                                                  increased due to supply pressure as the government announced plans for its debt consolidation program wherein it is                                                        Government
                                                                  looking to issue new 10- and 20- year benchmark bonds. On the other hand, the 2- to 7-year bond yields decreased
                                                                                                                                                                                                                                              Securities -
                                                                  amidst better-than-expected inflation figures, continued fiscal consolidation and credit ratings upgrades from Fitch and
                                                                                                                                                                                                                                           Medium Term 15%
                                                                  Moody’s. Inflation for the month of May came out at a better-than-expected 4.5% from consensus estimates of 5.0%,
                                                                  while June surprised coming out at 4.6% from expectations of 4.7%. This was accompanied by a revision in April’s            Top 10 Holdings
                                                                  inflation figures to 4.3% or 0.2% lower. The Government incurred a budget deficit of only PHP9.6 Bn for the month of
                                                                  May, as revenues grew 16% and expenditures shrank 11%. Fitch raised the Philippine local currency credit rating to                                                                                                    % of Fund
                                                                  BBB- which is now Investment Grade, citing the improved fiscal consolidation and favorable economic prospects as            BSP Special Deposit Account 4.6875% 07/21/2011                                               12.4%
                                                                  reasons for the upgrade.
                                                                                                                                                                                              BSP Special Deposit Account 4.6875% 07/06/2011                                               8.7%
BPI Premium Bond Fund




                                                                  The Monetary Board surprised the market when they decided to increase the reserve requirement by 1% to 20%, and             BSP Special Deposit Account 4.6875 07/27/2011                                                8.6%
                                                                  retained the overnight borrowing rate at 4.50%. Market consensus was for another 25bps hike in policy rates. The            BSP Special Deposit Account 4.6875% 07/13/2011                                               6.6%
                                                                  unexpected pause in policy rates coupled with buying interest ahead of the Bond Swap further drove the yields in the 2-
                                                                  to 7- year tenors lower.                                                                                                    Fixed Rate Treasury Notes 9.125% 09/04/2016                                                  5.2%
                                                                                                                                                                                              BSP Special Deposit Account 4.6875% 07/11/2011                                               5.1%
                                                                                                                                                                                              Fixed Rate Treasury Notes 7.0000% 03/31/2017                                                 3.9%
                                                                                                                                                                                              Fixed Rate Treasury Notes 7.0000% 01/27/2016                                                 3.3%
                                                              Strategy                                                                                                                        Fixed Rate Treasury Notes 7.8750% 02/19/2019                                                 3.2%
                                                                                                                                                                                              Fixed Rate Treasury Notes 6.3750% 05/13/2015                                                 3.0%
                   Visit us at www.bpiassetmanagement.com




                                                                  The Fund increased long-term government securities holdings through purchases of 5-8 year tenors in preparation for
                                                                  the upcoming bond swap. The Fund will participate in the BTr’s debt consolidation program, swapping less liquid,            Any prospective investment shall be limited to the type of investments described in the Deed of Trust
                                                                  shorter-dated securities to the new longer-tenored benchmark bonds.                                                         of the Fund.


                                                             Risk Disclosure
                                                                                                                                                                                              Risk Characteristics
                                                                                                                                                                                                                                                                      Past 12 Months
                                                             The Fund is suitable for investors who take short- to medium-term views. As a marked-to-market UITF, the yield,                                                       June 30, 2011           Low            High       Average
                                                             net asset value, and total return may fall as well as rise as a result of interest rate movements and changes in the             Duration                                  1.92               1.36           2.51         2.07
                                                             credit quality of the investments. On redemption of units, an investor may receive an amount less than the original
                                                             amount of the investment. Liquidity risk also need to be taken into account.                                                     Volatility, Past 360 Days                1.07%              0.88%          1.07%        0.98%
                                                                                                                                                                                              Sharpe Ratio, Past 360 Days               3.58
                                                             Risk Management
                                                                                                                                                                                              Duration measures the sensitivity of NAVpu to interest rate movements. As interest rates rise, bond
                                                             In accordance with the provisions in the Declaration of Trust, the Fund implements a risk management policy that                 prices fall. The higher the duration, the more NAVpu will fluctuate in relation to changes in interest
                                                             applies the principles of Value-at-Risk (VAR). VAR is a measure of the portfolio' maximum potential loss and is
                                                                                                                                                 s                                            rates. Volatility measures the fluctuations in NAVpu. The higher the number, the higher the potential
                                                             computed based on price volatility and market value of the investment portfolio. The Fund' risk management
                                                                                                                                                              s                               gain or loss. Sharpe ratio evaluates reward-to-risk efficiency. The higher the number, the higher the
                                                             policy prescribes a dynamic volatility band, such that if the volatility of the Fund' investments as reflected in the
                                                                                                                                                 s                                            reward per unit of risk.
                                                             NAVpu exceeds the volatility band, adjustments are made for the collective interest of the participants. The Fund
                                                             may also use financial derivatives to hedge the portfolio against market and credit risks.




                                                            BPI Premium Bond Fund is a Unit Investment Trust Fund (UITF) and not a bank deposit product. It is not guaranteed by BPI nor by the Philippine Deposit Insurance Corporation (PDIC). As such, units of participation of the
                                                            investor in the UITF, when redeemed, may be worth more or worth less than his/her initial investment/contributions. Due to the nature of the investments, yield and potential yields cannot be guaranteed. Any income or loss
                                                            arising from market fluctuations and price volatility of the securities held by the UITF, even if invested in government securities, is for the account of the investor. Historical performance, when presented, is purely for
                                                            reference purposes and is not a guarantee of future results. The Trustee is not liable for losses, unless upon willful default, bad faith or gross negligence. For the purpose of lodging, clearing, settlement, and delivery of
                                                            securities in the Fund, the Trustee is authorized to avail of the third parties' willfull default, gross negligence, or evident bad faith. Investors are advised to read the Declaration of Trust for the Fund, which may be obtained
                                                            from the office of the Trustee, before deciding to invest. For inquiries, please call: (632) 845-5080 , (632) 845-5087 or (632) 816-9053, email bpi_trust@bpi.com.ph or visit www.bpiassetmanagement.com.

				
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posted:7/12/2011
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