MONEY MARKET

MMMF or Money Market Mutual Fund

Is an investment where a professional fund manager pulls funds in difference
members of public and invest them. In this case those funds are invested in different mix
of money market securities or asset. The MMMF also a good example of short and medium
term investment and this means a good way to earn interest on some money that may
not make to use for 3 months to 2 years.

Examples of Money Market Investment:

 Treasury bills
 Commercial papers
 Bankers acceptance
 Certificates of deposit

Money Market Mutual Fund best suited for:

It best suited for people who are afraid to risk high amount of money this is
because the instrument invested in money market mutual fund are really pretty safe and
not subjectable of any circumstances when it compared to other types of investment.

Benefits of a Money Market Mutual Fund.

It’s Affordable - All you don’t need that much money to start investing as much 5,000.
Professionally Managed - Like all other professional manage mutual fund, the money
market mutual fund is managed by professional expert funds managers whose job it is
to grow your investment overtime.

Periodic Interest - MMMF offers periodic interest payment on your investment it could
be monthly, quarterly, or annually.

Easy Entry and Exit - The MMMF is very liquid it easy to buy in to and also easy to
liquidate your investment when your want to cash out.

Diversified Money Market - Also it’s allowing you to joy investment in certain MMMF
securities that you ordinarily won’t able to take advantage because of high entry
requirements.

Money Market Deposit Accounts

A type of savings account in which the bank or brokerage film invests funds held
on deposits in short-term debt obligations. A money market deposit account often offers
limited check-writing privileges and pays an interest rate that is typically higher than a
regular savings account but lower than a certificate of deposit or other time deposit. Also
referred to as a Money Market Demand Account or simply as a Money Market Account
compare to Money Market Fund.
CAPITAL MARKET

Long-Term Negotiable Certificate of Deposit or LTNCD.

An LTNCD, or Long-Term Negotiable Certificate of Deposit, is a bank product
offered to investors looking for a relatively safe investment, but with higher interest rates
than a regular savings account or short-term time deposit.
As mandated by the BSP, LTNCDs are to be denominated in Philippines Pesos,
have a minimum maturity of 5 years, be script less in form, and registered with a third
party Registry Bank maintaining an Electronic Registry Book.

Long-term: maturity date usually comes after 5 years or so.

Negotiable: can be sold in the secondary market, even before maturity date.

Certificate of Deposit: like a Certificate of Deposit (CD), LTNCDs also earn interest,
and is a debt instrument.

Deposit: as a bank deposit product, it is insured by the PDIC. It is a hybrid product in a

sense that much like a time deposit, it is issued by a bank and is covered by the PDIC.
Like a bond, it is negotiable, long-term, and has quarterly interest payments.

Difference between Time Deposit and LTNCD

A regular time deposit can mature within a month or up to 7 years, is non-
transferable while outstanding, and can be pre-terminated (although subject to a penalty
fee). LTNCDs take a minimum of five years or more to reach maturity, can be sold to the
secondary market at the prevailing market price, and cannot be pre-terminated prior to
maturity.

Examples of LTNCD offering of Philippine banks

 Security Bank LTNCD (2017). Security Bank announced it is offering P5 billion

worth of long-term negotiable certificates of time deposits (LTNCD) to “manage
liabilities while expanding funding and investor base”. The actual offer amount
may be increased depending on the demand. The current indicative rate of this
LTNCD is 3.875%.
 BPI LTNCD (2017). The Bank of the Philippine Islands (BPI) is planning to raise
P30 billion from an LTNCD offering to support its expansion plans and also diversify
its funding sources. Final details of the LTNCD will be announced at a later date.

 Philippine National Bank LTNCD (2017). PNB is currently offering P3 billion

worth of LTNCD. The offer period lasted until October 19, 2017. PNB’s LTNCD
interest rate is between 3.75% and 3.875% per year and interest income is paid
on a quarterly basis. PNB’s LTNCD will mature on April 26, 2023.

 RCBC LTNCD. In April 2012, Rizal Commercial Banking Corp. (RCBC) issued P1.15-
billion worth of LTNCD carrying a coupon interest rate of 5.25% per year. The
LTNCD matures after five years and five months. In December 2011, the bank
issued its first tranche of LTNCD and raised a total of P3.85 billion. It raised P2.033
billion by issuing fixed-rate LTNCDs paying 5.25% and an additional P1.817 billion
by issuing zero-coupon certificates that were priced to yield 5.50%.

 UCPB LTNCD. In May 2012, the United Coconut Planters Bank (UCPB) issued the
third tranche of its LTNCDs amounting to P1.85 billion. The interest rate was
pegged at 5.875% per annum and the minimum investment amount was P50,000.
 The LTNCDs mature after 5 years and 3 months. According to the bank, proceeds
from the sale will be used to finance its expanding loan portfolio. The May 2012
offering is already the third LTNCD issue of the bank, following an August 2011
LTNCD offering that paid 6.0% interest and a November 2010 LTNCD issue that
paid 6.25% per annum.

 Security Bank LTNCD. Security Bank raised P5 billion in July 2012 by issuing a
7-year LTNCD with a fixed interest rate of 5.50%. Proceeds were used to grow the
bank’s lending business. The bank also raised the same amount in its first tranche
of LTNCD offering in February 2012. The certificate of deposit also paid 5.50%
interest and will mature seven years from date of issue.

 East West Bank LTNCD. The Gotianun-owned bank issued P5 billion worth of
LTNCDs in 2012, with a minimum holding period of “five years and one day” and
a maximum holding period of “five years and six months” after the issue date.
Minimum investment amount was P50,000 while succeeding investments were in
increments of P10,000.

Mortgage Backed Securities

A mortgage-backed security (MBS) is an investment similar to a bond that is made
up of a bundle of home loans bought from the banks that issued them. Investors in MBS
receive periodic payments similar to bond coupon payments.
The MBS is a type of asset-backed security. As became glaringly obvious in the
subprime mortgage meltdown of 2007-2008, a mortgage-backed security is only as sound
as the mortgages that back it up.
The investor who buys a mortgage-backed security is essentially lending money to
home buyers. An MBS can be bought and sold through a broker. The minimum investment
varies between issuers.The homeowner keeps paying on time, and the credit rating
agencies that review MBS perform due diligence.

Types of Mortgage-Backed Securities

There are two common types of MBSs: pass-throughs and collateralized mortgage
obligations (CMO).
Pass-Throughs
Pass-throughs are structured as trusts in which mortgage payments are collected
and passed through to investors. They typically have stated maturities of five, 15, or 30
years. The life of a pass-through may be less than the stated maturity depending on the
principal payments on the mortgages that make up the pass-through.

Collateralized Mortgage Obligations

CMOs consist of multiple pools of securities which are known as slices, or tranches.
The tranches are given credit ratings which determine the rates that are returned to
investors.