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Equities
Make sure that you always stay ahead of inflation with stock investments.
What is an equity investment?

An equity, stock, or a Common Share is a type of security which represents ownership in a company. When you purchase a stock, you become a shareholder, stockholder, or part-owner of a company.


Equity or stock investments are suitable for investors who are willing to take significant risks in exchange for maximum return potential through long-term capital growth. When you invest in equity, you become part-owner of the company who issued the shares you bought. Unlike bonds which typically provide fixed interest payments over its term, equities provide earnings to investors through price appreciation and/or dividends. However, a stock's value is highly affected by the company's actual business performance and growth prospects, as well as, the prevailing sentiments of the market. Thus, equities are more volatile than bond investments but have the potential to provide higher returns over the long-term.


What are the available Equity Investments for me?

Direct Equity

Represents a particular company's shares typically bought through a stock brokerage account. You can earn from the increase in price of a stock over a period of time (Capital Appreciation) or from a portion of a company's earnings that is paid out to shareholders (Dividends).

Equity Funds

Collective investment schemes which are invested primarily in various stocks and are professionally managed by fund managers. You can earn from the fund's price appreciation.

What are the two main types of equities?


Common Shares

Preferred Shares

With voting rights?
Yes
Usually none
Will amount of dividends be guaranteed?
Not guaranteed; amount of cash dividend depends on the company's dividend policy; paid out only after all loan interest and preferred shares dividend obligations have been met.
Not guaranteed but is fixed, and is usually cumulative.
With claim on issuer's assets?
Yes, but lower priority than Bonds and Preferred Shareholders.
Yes, has lower priority than Bonds but higher than Common Shareholders.

 

What are the predominant risks?

a. Market or Price Risk is the possibility for an investor to experience losses due to changes in market prices of securities.


b. Liquidity Risk is the possibility of losses due to inability to sell or convert the bond or equity investment into cash immediately, or in instances where conversion to cash is possible but at a loss.


How to invest?
  • Invest directly in individual securities issued by a publicly listed corporation. The investor is the one who assesses and makes the decision on which security to purchase.


  • Buy units/shares of a collective investment scheme or a pooled fund thereby indirectly investing in securities issued by a government or corporation. In this arrangement, various investors/participants pool their money and entrust the same to a fund manager, who will be the one to select and buy the underlying securities as allowed by the pooled fund's objective and policies.



Contact your Relationship Manager, visit the nearest BPI branch, or email BPI Securities at bpitrade@bpi.com.ph to know more about Equities.


REITs
Invest and trade in real estate through Real Estate Investment Trust (REIT).
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