PHILIPPINE EQUITY FUND

April 29, 2011

S u n L ife P ro s p e rity E q u ity F u n d v s . B e n c h m a rk
(in T h o u s a n d P e s o s )
2 ,3 0 0 2 ,2 0 0 2 ,1 0 0 2 ,0 0 0 1 ,9 0 0 1 ,8 0 0 1 ,7 0 0 1 ,6 0 0 1 ,5 0 0 1 ,4 0 0 1 ,3 0 0 1 ,2 0 0 1 ,1 0 0 1 ,0 0 0 900 800
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MARKET REVIEW Local shares posted strong gains for the second consecutive month, pushing the PSEi in positive territory for the first time this year. The local bourse gained 6.5% MoM to 4,319.51, tracking the gains of regional markets, as investors focused on strong corporate earnings results in the US and favorable news flow on the local front. So far, earnings of S&P 500 companies have grown 19% during the first three months of the year, beating analysts estimates of 12% earnings growth. This has been the sixth consecutive quarter that earnings in the US grew double digit. Meanwhile, the countrys first quarter budget deficit was only PhP 26.9B, lower than the governments target of PhP 112B and significantly lower than the PhP 134.2B shortfall in 1Q11. Both the Bureau of Internal Revenue and the Bureau of Customs exceeded their monthly revenue targets. April headline inflation increased to 4.5% YoY from 4.3% YoY in March, still within the governments full-year target of 3-5% but already showing signs that this will be at risk. Interestingly, fund managers seemed to have ignored at least for the time being the geo-political tension in MENA, disaster in Japan, and on-going European debt crisis. Foreign investors continued to buy local stocks amounting to PhP 15.6B making them net buyers of the market on a year-to-date basis. All subindices posted gains during the month with Mining and Oil sector (+13%) leading the pack amid rising commodity prices. Top gainers in April were PX (+19%) on higher gold prices, while ICT (+18%) and DMC (+18%) soared on speculation of their inclusion in the MSCI Index on the next re-balancing scheduled end of May. OUTLOOK AND STRATEGY The PSEi may take a pause after the strong run up for the past two months. We believe that a healthy correction is good for the market to build a stronger base for the next run-up. First quarter GDP and corporate earnings will be near-term catalysts. Continuous inflow of foreign funds will further support stock prices. On the other hand, higher inflation expectation beyond the governments target of 3-5% and execution risk on the publicprivate partnership projects of the government will dampen investor sentiment.

5 -y e a r H i sto ri c a l R e tu r n fo r a P h p 1 . 0 M I n v e stm e n t

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S u n L i fe P r o sp e ri ty Eq u i ty F u n d

B e n c h m a r k : P S Ei

Sun Life Prosperity Equity Fund - Absolute Returns

YTD Return 1-Year Return 3-Year Return 5-Year Return Since Inception 0.0% 60.0% 120.0% Benchmark 2.8%
5.8%

31.0%
35.2%

56.8%
63.4%

90.2%

110.1%

155.4%

Ja

180.0%

Sun Life Prosperity Equity Fund

Sun Life Prosperity Equity Fund - Asset Allocation

Others 1%

Cash 14%

Equities 85%

Sun Life Prosperity Equity Fund - Sector Holdings for Equity Component
Transportation Services Telecommunications Consumer / Retail Other Equities Real Estate Utility / Energy Banks / Financial Services Holding firms / Conglomerates 4.2% 4.6% 4.9% 6.8% 10.5% 13.8% 14.3% 25.1%

pr

191.3%

-1

Fund Details Launch Date Fund Size Net Asset Value Per Share

5-Apr-00 Php 5,386,496,827.90 Php 2.7631

Top 10 Equity Holdings Company Aboitiz Power Corporation DMCI Holdings Inc. SM Investments Corp. Ayala Land Inc. Banco de Oro Universal Bank Metropolitan Bank & Trust Company PNOC Energy Development Corp. Phil Long Distance Telephone Co. Ayala Corporation Semirara Mining Corp.

% to Total Assets 7.0% 6.9% 5.3% 5.2% 4.7% 4.4% 3.9% 3.9% 3.7% 3.4%

Invest wisely. Important information about the Sun Life Prosperity Funds is contained in their prospectuses, which may be obtained from duly authorized Sun Life Mutual Fund distributors. Read the prospectus carefully before investing. Share values and thus yields will fluctuate. Please note that return statistics only indicate past performance over the periods indicated and not future performance.