Investing through Mutual Funds

Ano ba itong mutual funds at paano mag-invest dito? I will share with you one of the investment vehicle na kung saan pwede mo iinvest ang iyong pera to make it grow at ito ang mutual fund. Kung gusto mo maginvest sa stock market pero wala ka time to study at pagaralan maginvest directly sa stock market, don't worry you can still invest sa stock market through Mutual Fund.

What is a Mutual Fund?

Mutual Fund ay yung pinagsamasama na pera from the different investor like us and invest in the different types of mutual funds such as bonds, equity or stock market, balanced funds & money market funds. The money you invest in the mutual funds is managed by a professional fund manager. You entrust your money to the fund manager to keep it safe & make it grow.

Types of Mutual Funds 

Here are some types of mutual funds to give you an idea, but there are other types not mentioned because it depends on the mutual fund company.

•  Equity or Stock Funds

These funds invest primarily in the shares of publicly-listed corporations. The fund objective is capital appreciation or long-term capital growth. Ito ay isang type of mutual funds kung saan makakapaginvest ka sa stock market at yung pera na iinvest mo dito ay pangmatagalan, kaya yun ilalagay mo na pera dito ay yun pera na hinde mo gagamitin 5 years or more from now.

•  Bond Funds

Bond funds invest primarily in fixed-income securities issued by the government or large corporations. Examples of fixed-income securities include bonds, Treasury bills, and Treasury notes. The objective of the fund is to provide current income that is consistent with preservation of capital and liquidity. Ang pera na iinvest mo dito ay ipapautang sa gobyerno o kumpanya kung saan tutubo ito ng fixed interest for a defined period of time.  

• Balanced Funds

Balanced funds invest in a mixture of equities and fixed-income securities. The goal is to provide total return consisting of a high level of income that is consistent with preservation of capital, liquidity and long-term capital appreciation. Yung pera na iinvest mo dito ay ilalagay ng fund manager sa iba-ibang type katulad ng equity funds, bond funds at money market funds hinde lang sa iisang types of fund. 

•  Money Market Funds

Among the four types of mutual funds in the country, money market funds provide the least amount of risk. Its goal is to provide current income by investing in short-term securities with portfolio duration of one year or less. These may include short-term government securities, special deposit arrangements, and time deposits, among others. Kung ayaw mo ng matagal na paghihintay at kelangan mo yun pera makuha kagad, ito ang pwede sayo pero mas maliit ang kita mo dito compare sa ibang types of fund.

How you will earn in Mutual Funds?

You will earn money through price appreciation in value of the assets owned by the fund, the dividends and interest it receives from the securities held. These incomes are then passed on to the investor less fees and fund expenses. Investing in a mutual fund, you are buying shares of the particular types of fund based on its NAVPS or Net Asset Value per Share. Kikita kapag tumaas ang NAPVS and you will loss kapag bumaba ang NAPVS but you will only lose if you sell it when the price of NAVPS depreciates.

How much is the required minimum initial investments?

You can start investing in a Mutual Fund with a minimum initial investment of Php 5,000.00.

What are the different Mutual Fund Company?

There are many mutual fund companies in the Philippines that offer the different types of mutual funds. To know more about the company and their performance visit the website of Philippine Investment Funds Association www.pifa.com.ph. In terms of regulation, mutual funds are governed by Republic Act No. 2629 (RA 2629), also known as the "Investment Company Act" and are regulated by the Securities and Exchange Commission (SEC). 


As a summary, investing in a mutual funds is like riding in a passenger jeep, kung saan pupunta ka sa terminal (mutual fund company) na meron iba ibang ruta (types of mutual funds) at sasakay ka papunta sa destinasyon na gusto mo either malapit lang na biyahe o malayong biyahe ito. Makakasama mo sa loob ng jeep ang katulad mo ang pupuntahan (investor) at dadalahin kayo ng driver (fund manager) sa inyong destinasyon. At katulad din ng passenger jeep kelangan mo magbayad sa driver (fund manager).

A Disclaimer: I'm not a professional financial adviser, I'm just sharing what I learned. To know more about Mutual Fund you can ask or seek a professional financial adviser to further discuss with you regarding the topic.

So hope you learn something about Mutual Fund here in my blog, thanks for reading and God bless to you. See you in my next post.. 

Read Also:

Why we should Invest?
How Inflation Affects Us?
Investing in the Philippine Stock Market
Question & Answer About Stock Market
How to Start Saving?
Money Saving Tips

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