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

P.S.1 Subscribe to my blog to receive my latest post directly to your email Inbox it's free>>Subscribe to My Personal thoughts About Life ..

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Where I Should put My Investment?

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Where to invest your money or savings is an important decision. Having money in a savings account is a good start but it is still not enough. The next step should be to look for is an investment opportunities that would make your money truly grow. Ang totoo, yun pera mo na inilagay mo sa iyong savings account does not really grow.  In the long run, the money you earned through savings is beaten by the rising inflation rate. Example meron ka pera sa savings account  mo na P10,000.00 pesos na may interest rate na 1% per annum magkano lang ito sa loob ng isang taon lumalabas na kumita ka lang P100.00 pesos di ba. Pero yung true value ng pera mo after 1 year ay maaring bumaba ang value kaysa sa tumaas dahil sa inflation rate o pagtaas ng mga bilihin. Dahil yun 100.00 pesos mo noon ay mas maraming mabibili kaysa sa 100.00 pesos mo after 1 year.

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Here are some of investment vehicles na kung saan natin pwedi ilagay ang ating pera, but of course you need to decide which is the best investments vehicles that is suitable to you.

•  Bond

The term bond is commonly used to refer to any securities that are founded on debt. A bond is basically a loan, kung saan nagpapahiram ka ng pera sa isang company or a government institution. In return, you are paid interest during the life of the bond, and get paid the principal amount of the bond at the end of the term.

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•   Stocks

This is a type of investment vehicles that gives you shares of ownership in a corporation. When you buy stocks of a publicly listed company you become a part owner of that company. Here are some of the publicly traded company listed in the Philippine Stock Exchange (PSE) San Miguel Corporation (SMC), Jollibee Food Corporation (JFC), First Philippine Holdings Corporation (FPH) and many more. You can invest in their stocks through a license Stockbroker. Your money will grow in the stocks in two ways:

      1.) Through capital appreciation or when there is an increase in the market price of your stocks.   

        2.) Through dividends issued by the company you invested in.

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To know more about investing in the stocks click the link about stock market....

•  Mutual Funds and UITF

        Mutual fund and Unit Investment Trust Fund (UITF) is both a method of investing that collects money from a number of investors to be able to buy and trade government securities or stocks. This means that money from different investors is combined into a single fund. The combined funds may then be invested into bonds, equities, even foreign exchange and etc. Mutual funds and UITF are always managed by an expert called the ‘fund manager’. To know the difference of mutual funds & UITF go to this link. There are some banks offering UITF in the Philippines like Banco De Oro (BDO) and Bank of the Philippines Island (BPI). You can inquire to them regarding Unit Investment Trust Fund (UITF) and I know you can start investing by as low as P1,000.00 pesos monthly. To know more about mutual funds click here.

•  Time Deposits

         A time deposit is a fixed-deposit which cannot be withdrawn for a certain period of time. In general, the higher the amount & the longer the period you choice in depositing of course the higher the returns. In the short term, time deposits are useful. However, for wealth building, they are almost useless because their returns are always lower than inflation.

Disclaimer: I’m not a financial expert adviser or a license stockbroker, I’m the same as you looking for the best option where I can put my money to make it grow and I found out through investing. I’m very happy that I joined truly rich club, dahil sa club binuksan nila ang aking kaisipan about investing, saving at iba pa. They guide me and motivate me to reach my financial goal, iniimbitahan ko din kayo to join us click here to sign up.

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P.S.1 The idea of this topic was taken from Investing 101 e-book & Stock Market Jump Starter e-book by J3 Patiño.

 P.S.2 Do you want to gain Financial wealth & Spiritual abundance at the same time? 

 Join us at the Truly Rich Club now founded by Bo. Sanchez, its purpose is to "help good people  become rich". Because of the guidance I get from the Club, I’m now investing in the Stock  Market! I’m inviting you to join the Club too. If you’re interested, click the link here Truly Rich  Club.