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WHAT IS MUTUAL FUNDS?

A mutual fund is an investment vehicle made up of a pooled funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers or Fund Managers, who invest the fund's capital and attempt to produce capital gains and income for the fund's investors.

Investors purchase shares in the mutual fund from the fund itself, or through a broker for the fund, and cannot purchase the shares from other investors.  The price that investors pay for mutual fund shares is the fund’s approximate net asset value per share (NAVPS) plus any fees that the fund may charge at purchase, such as sales charges, also known as sales loads.  Sales load may vary depending on the amount invested, it may go as high as 3% or as low as 1%.  

 

Mutual Funds have a minimum holding period of six (6) months, this means that you won’t be able to redeem your shares within this period, If incase you decide to redeem your shares during the holding period it will have an exit fee or a redemption fee normally between 1% to 3% depending of the fund.  But if the investor decided to redeem the shares after the holding period the exit fee will not apply.

BASIC TYPES OF MUTUAL FUNDS

BOND FUND is a low risk type of mutual funds that invest mostly in fixed income instruments.  The investment objective is basically for capital preservation and growth.  Depending on its investment objectives and policies, a bond fund may concentrate its investments in a particular type of bond or debt security—such as government bonds, municipal bonds, corporate bonds, convertible bonds, mortgage-backed securities, zero-coupon bonds—or a mixture of types.

BOND FUNDS
  • CONSERVATIVE TYPE OF INVESTMENT
  • CAPITAL PRESERVATION
  • AVERAGE RATE OF RETURN 4% - 6%
  • RECOMMENDED LENGTH OF STAY 1 TO 2 YEARS

STOCK FUNDS or EQUITY FUNDS  is an aggressive type of fund that invest primarily in shares of stock issued by Philippines corporations and listed on the Philippines Stock Exchange.  The main investment objective is long-term capital growth and appreciation.  Recommended length of stay in this type of fund is between 5 to 10 years.

STOCK FUNDS

  • AGGRESSIVE TYPE OF INVESTMENT

  • CAPITAL APPRECIATION

  • AVERAGE RATE OF RETURN 15% - 18%

  • RECOMMENDED LENGTH OF STAY 5 TO 10 YEARS

BALANCED FUNDS   is a mutual fund with moderate risk that invest in stocks and fixed income instruments.  The allocation may be fixed as a policy or may vary at the fund manager’s discretion.  The investment objective is for medium term to long term growth.  Recommended length of stay in this type of fund is between 3 to 5 years.

BALANCED FUNDS

  • MODERATE TYPE OF INVESTMENT

  • CAPITAL GROWTH

  • AVERAGE RATE OF RETURN 12% - 15%

  • RECOMMENDED LENGTH OF STAY 3 TO 5 YEARS

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