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.
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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
Equity funds
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.
Bond funds
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.
Balanced fund
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.
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Hi Billy, good day.
I am new to the mutual funds world. I came across a stock certificate of my grandmother from Filipinas Mutual Finance Inc. Is this still worth anything today?
Thank you very much for your advice.
Ino
Hello Ino, thank you for reading the blog. I can’t guarantee but the best thing to do is to inquire with the mutual fund company where that MF was opened/purchased. Thank you.
Filipinas Mutual Fund became FMF Development Corporation..
hi, good evening.
i am a student from university of the east and we’re currently having our thesis related to mutual fund. we are looking for someone who knows a lot about mutual fund and i hope you could help us. 🙂 thank you.
Hello how can I help? I can only share what I know. 🙂
Good evening, I would like to ask if we are obliged to pay the mutual fund representative if we are to consult them?
How to know if that person is a mutual fund representative of that certain company? Greatly appreciated
Nope! Consultation should always be free. The best thing to verify is to ask or call the mutual fund company itself. 🙂
Hi sir, im a licensed financial adviser in manulife, i conduct free financial consultation with regards to investments, savings, retirement and educational fund, estate planning and the likes.. you can contact me in this number 09152423266..
im interested
09358183757
Hi Billy,
I’ve published a podcast that may help your audience as well. They may check it out here:
http://lifeinsurancehub.ph/podcast/pime-003-everything-you-need-to-know-in-investing-in-mutual-funds-in-the-philippine-qa/
I hope this supplements value to what you are already doing.
Keep it up 🙂
Nick
Thank you Sir Nick! I’m listening on it now. Keep on sharing valuable information about personal finance. Cheers!
Hi, you might also be interested with variable insurance. I’m from Prulife UK, a financial consultant. Please do contact me if your are willing to know more about it. 091762993404.
Thanks.
09176293404
09358183757 interested
How to improve this article: Provide a couple of mutual fund companies that we can contact. Also give a report on how these companies handle clients and portfolios. Another thing you can improve on is information about fees, taxes, etc., and by giving specific examples of how to make money here, like the one you provided for UITF.
Thanks for the articles.
Noted on this Jon. Thanks for the inputs. We will update this article. You may also check this article that share the basic about Mutual Fund fees. Thank you!
Is this still active? Can you kindly expound this statement: You can earn from capital gains or appreciation and from interest and dividend of income.
I asked my MF customer support and they said stock dividends are not regularly given (I thought it should be given once a year). Capital gains/distributions, do they also give it to shareholders, or it just increase the NAVPS? Maybe they just don’t disclose this?
From reading their reply, my understanding is that I will only earn from the increase in NAVPS (no dividends / capital gains).
BTW, I have Sunlife Philippine Equity MF.
Hi Franc, capital gains or appreciation simply happens when you bought mutual fund shares on lower navps and sell it on higher navps. In some cases, mutual fund companies can earn from dividends on the stocks they invested(thru their fund manager) and that income can be distributed to the shareholders. This doesn’t happen all the time though. Thanks!
Hi,
I am currently a policy holder of AXA phil. As mentioned above there are a lot of different types of mutual fund. I have to pay regularly (monthly, quarterly or even annually) it depends on you. There is a required fixed amount payment you have to maintained and that depend also on what type of policy you have. You may visit http://www.axa.com.ph if you want to learn more about their products and services. Let me share what I have. As a policy holder I am entitled to their insurance product which is Life Insurance in any case if something happened to me my love ones still be able to claim Millions from my policy.
how much is the minimum investment for mutual funds?
P5,000 in most mutual fund companies. 🙂
Im new in mutual funds i invest P5,000 in mutal fund and i like to put P10,000 every months its possible
Yes Ed. P5000 is the minimum for initial investment. Thanks!
Hi billy
Im new to mutual funds and i really wanted to invest what is the first step. Thank you and more power!
Mitch
Hi Mitch,
For newbies, the best thing to start is to study first and invest in yourself. Read books, blogs and attend seminars. Once you gain knowledge, you will know which mutual fund or which investment is suited for your goals. Then take action. Thanks!
How to start that businesa i dont have any idea about that..please help me i want to invest i dont know..whos the right person to contact to give me an advice…i dont know how to start…thank u
How can apply the peso-cost averaging in mutual funds?
Hi! I’m interested to invest in mutual aid. Which would you suggest if our goal is for retirement?
Hi! I’m interested to invest in mutual fund.. what company is best for this?