Mutual fund to target overseas Filipinos

Filipinos working overseas are to be targeted by a new investment fund to be established in Dublin.

The mutual fund is initially aimed at Filipinos working in Asian countries, but it is likely to become available in Europe, including Ireland, later this year or early in 2007.

The International Filipino Mutual Fund will be "domiciled" or registered in the Republic by ING Bank. The initial target of the fund will be $200 million (€164 million).

It is believed there are seven million Filipinos working overseas sending home $10.7 billion each year.

This money often helps families to pay for accommodation, school fees and other expenses. Even after remittances are sent back to the Philippines, many workers still have excess money that ING hopes may find an outlet in the new fund.

Investors will be able to participate in the fund for as little as $100 (€82.17).

The fund will invest in fixed-income securities and stocks, with some businesses in the Philippines itself likely to benefit.

A mutual fund is an investment company that pools the money of like-minded investors and invests it in a variety of securities with a specific objective.

The Central Bank of the Philippines has given its approval to the ING Fund.

Ireland has become an increasingly popular location for mutual funds to be set up. Many of the funds are domiciled here.

This means the funds are registered here but the main inflows originate elsewhere. There are several reasons why funds choose to locate in Ireland, including the corporate tax rate of 12.5 per cent.

There are also withholding tax exemptions on most interest and dividend payments. Fund management services are also not liable for VAT here.

A recent report from the Dublin Funds Association showed that total net assets in Dublin-domiciled funds reached €663 billion in 2,334 funds and sub-funds by mid 2005. There a number of international locations that attract mutual funds such as the Cayman Islands and Luxembourg.