If you’ve already build your emergency fund and already got an insurance for yourself, investing would be the next ideal step in your financial freedom journey. If you’re not ready yet, I strongly suggest you to track your expenses first and start budgeting your money.
I personally believed that financial freedom is a step by step process and we should take one step at a time especially for beginners like me.
The main goal of this blog is to share basic personal finance literacy to many Filipinos and impart knowledge that you can use in making financial decisions in life. Though you need to seek financial advise from the expert if needed, the information on this blog can really give you suggestions and ideas related to your financial freedom journey.
Today I will share basic information how to invest in mutual funds in the Philippines. Honestly, me and my lovely wife don’t have a mutual fund account yet. We’re considering it now since we’re almost done building our emergency fund so we’re looking for some investments that can help grow our money. And one of our top choices is investing in mutual funds here in the Philippines.
As we normally do, we do our due diligence first to research and investigate, compare, read feedback before we start investing in any kinds of investment instrument.
To share what I/we know so far about mutual funds, I’m sharing this short article for you.
What is mutual funds?
Based from my research, mutual fund is a pool of funds of many individual, companies, corporations and other investors invested in different kinds of investment. This will be handled by a professional called fund manager.
The value of a share of the mutual fund, called the Net Asset Value (NAV), is calculated daily based on the fund’s total value divided by the total number of outstanding shares.
You can earn from capital gains or appreciation and from interest and dividend of income.
Types of mutual funds in the Philippines
Funds are primarily invested in stocks in the Philippine stock market and chosen by the fund manager. This is a high risk-high return type of mutual fund. You need a long time horizon when investing in this kind of mutual fund.
The fund are invested in fixed income securities offered by the government and other private companies. This is also ideal for long term investors and has moderate risks.
Funds are investment in a mixed of equity and bond funds. The risks in equity are being balance thru the mixed investment of bond funds
Money market funds
Almost the same with balance fund given that it is a short term investment ( a year or less).
Where to invest mutual funds in the Philippines?
Investing in mutual funds can only be done through a licensed mutual fund companies here in the Philippines. As I’ve researched, an investor will be given a profile investment questionnaire by the licensed mutual fund representative or adviser.
If you are investing in mutual funds in the Philippines from abroad, and need to exchange your domestic currency into Philippine peso, you could bear in mind that the currency exchange costs could be quite substantial. You can use alternative providers to save money if absolutely must exchange currencies.
Based from the investor’s answer in the questionnaire, the representative will offer the best type of mutual funds that suits the investor needs and/or risks appetite.
Since we do not have an account in mutual fund yet, let me just share you the top performing mutual companies in the Philippines as of May 24, 2015. This is taken from pifa.com.ph.
On the future articles, I will share more detailed information on how to invest in mutual funds in the Philippines. I will also do more research and comparison to give us more idea and option which and where would be the best to invest mutual funds in the Philippines.
For now, let’s have these basic information first and study our self which funds or type of mutual funds suit our needs and personalities. We should always remember that investing in ourselves is the best investment we could ever have.
P.S. If you’re already investing in mutual funds, you may wanna share your personal experiences and views so other readers especially beginners can learn from it. Please share it in the comment section below. Thank you.