HOW TO INVEST IN MUTUAL FUNDS IN THE PHILIPPINES 

Everything you need to know on how to invest mutual funds in the Philippines and making money from it are shared in this special page. I consider this as Mutual Funds 101 too as I shared many tips and important concepts about this kind of wealth building. So if you are a beginner, you’ll surely learn from this thread.

What is mutual fund? Why rich and smart people have mutual funds and why you too should open one? How much money you need to start opening a mutual fund? What are the best mutual fund companies to invest with? Those are just some of the questions we are going to answer here so read on.

What you need before investing in a Mutual Fund?

 Knowledge – you’re lucky because you learn the basic knowledge and concept of Mutual Fund 101 here aside from getting to know your Fund so continue reading.

Time – every investor must have his/her target time or goal for the fund’s life

Money – of course you must have the fund in order to earn some more

What is Mutual Fund?

-it is a type of investment wherein you join other investors and corporations to form a massive fund which will be handled by an expert/professional who is called fund manager for diversified portfolios of stocks, bonds, securities, money markets and other mutual funds.

Different Types of Mutual Funds in the Philippines

Before you open an account, you need to know what kind of account suits you. Their classifications are:

Money Market Funds – are invested in short-term (one year or less) debt instruments, fixed income securities, special savings and short-term bonds. These types of funds are suitable for low-risk taking investors and individuals who are looking for profit and higher returns than savings and time deposits.

Bond Funds – are invested in medium to long-term debt instruments, fixed income securities and government and corporations bonds (1 year or more). These types of funds are suitable for risk-tolerant investors who are looking for higher yields and returns.

Balanced Funds – are invested in equity securities and some fixed income securities in other words, a combination of debt instruments and shares of stocks of Philippine companies. These funds are suitable for risk-taking individuals who are aware of stock market investment and their possible profit and gains.

3 Factors in Choosing Mutual Funds

Which Type of Mutual Fund suits you? There are three things to consider before deciding which type of MF you will choose to open and invest.

Your Risk tolerance – are you an aggressive or conservative type of investor? How would you take the risk, to what extent and level in order to reach your earning potential? Remember, there’s always risk attached to investing and there’s no guarantee you’ll gain or lose.

Your Financial goal – why and how are you investing? Are you investing half of your regular salary or investing a million pesos you have made recently? Are you expecting capital preservation or you’re expecting money growth for future retirement? How long would you like to maintain it and when is your target time to redeem the fund.

Your Time – How long would you like to put your fund? This is simply about your time horizon in investing until redeeming. If you have a target profit, you also have a target time.