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How to Invest in Mutual Funds in the

Philippines Make Money, Make Millions

Everything you need to know on how to invest in mutual funds in the Philippines and
making money and making millions from it are shared in this special page. I consider
this as Mutual Funds 101 too as I shared so many tips and important concepts about
this kind of wealth building. So if you are a beginner, youll surely learn from this thread.
What is mutual fund? Why rich and smart people have mutual funds and why you too
should open one? Whats the difference between mutual fund and UITF? How much

money you need to start opening a mutual fund? What are the best mutual fund
companies to invest with? Is your fund insured in the PDIC just like savings account?
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 youre 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 funds life

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

What is Mutual Fund?

As always I like making things short but concise so I had the definition summed up for

-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.



mutual just like a budding love and relationship. Are you familiar with MU (a.k.a.
Mutual Understanding?) After you get to know each other and fell in love with MF,
you still need to get to know MF and trust MF. Since you have a mutual bond,
when the fund incurred loss, you incur loss too and when it incurred profit, you
incur profit. Either way, you still invest.

A Mutual Fund is like riding a bike with your

lover. He drives and you just hug him as you journey along You are going somewhere

and obviously you just let him drive till you both reached the destination. Like a Mutual
Fund, you let the Fund Manager drive his way and execute strategies to make your fund
grow and maximize earning potential until you reap profit on your target period.
Thats not all you need to know yet. You need to know which way youre goingKnow
the types of MF.

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
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.
Equity Funds are invested purely on shares of stocks in the Philippine stock market
and are suitable for aggressive and risk-taking investors who understand the stock
market and possible capital appreciation.

CC BY Alan O Rourke
Apparently, the higher the risk, the higher the return or profit.

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, theres always risk attached to investing and theres no guarantee youll 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 youre 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

How to open a Mutual Fund account in the Philippines?

Before anything else, the investor is given an assessment by answering a form usually
calledInvestor Profile Questionnaire. From the result or score, he could know what
type of investor he is (conservative, moderate, aggressive) and he could also choose
what type of MF is suitable for him. The Mutual Fund licensed representative or adviser
is usually the one who will assist an investor in opening an account and choosing an
account appropriate for him. They would tell the investor everything they need to know
and tackle about the investment they are getting into. They would also advise and give
recommendations as to what type of mutual fund suitable for their financial status and
goal. Its important to read and understand the funds prospectus before you start your
When the investor finally decided, he can open his account just by submitting the

Investing in Mutual Funds Requirements

Its generally just like opening a bank account. The investor is usually asked to submit
valid IDs, recent photo and required to fill up some forms for bank profile and personal
information, signature card and some forms for the assessment of client and account
suitability. After everything have signed, settled and dusted, the client will be given a
document confirming his mutual fund account.

How much profit would you earn in a mutual fund?

Some gain higher returns, some get thousands while others millions. It really depends
upon the fund invested, the period it is invested and the performance of the fund.
Income or losses are computed via NAVPS (Net Asset Value Per Share) from the time
you opened your account to the time you closed or redeem. Apparently, the higher the
investment and the longer it is invested, the higher the return or profit. So I recommend
investing in long term.

I also recommend checking the past performances of the mutual funds so you know
which one performs better. You can ask your mutual fund adviser for a copy or just
check them at or the MF companys website. You must know the name
of the Fund before you can check it online.

Computation of Mutual Fund Income or Loss

How to compute mutual fund income or loss? Like I said it is based from the NAVPS, the
day you got it and the redemption date. Sample computation below assuming you
bought 100,000 shares from the best mutual fund company in the Philippines for
P100,000 and you plan to redeem it after 3 years.
Date of Purchase


Amount (P)

Income or Loss

June 2013




June 2014




June 2015




June 2016




Are you deducted for taxes when you withdraw your mutual fund?

If you earned gains at the redemption, usually theres no need for withholding tax since the
amounts are net (net asset value) already. Now that is good news.

Is your Mutual Fund Insured in the PDIC?

Since this is not a deposit or savings account, your funds are not insured in the PDIC
(Philippine Deposit Insurance Corporation). Investing is far different from savings. Its
risky yet the returns are much higher especially if the fund performed well. You may not
have that insurance in having a mutual fund yet you could maximize your earnings more
likely since mutual fund managers are experts and are equipped in executing the best
strategies to make the fund grow continuously and flexible. They choose the financial
instrument they deal with and choose the blue-chip companiesto participate with.

Want to know about these strategies and stats of your fund? Check or view your mutual
fund performance reports.
Why rich and smart people have mutual funds and why you too should open one?
Mutual funds are not new to wealthy people as they have many and different financial
wheels that drive their money wagon. If you are smart and wise, you too must have one
or some already. Im not gonna discuss about rich and smart people here as Im just a
commoner. And thats no excuse to have a mutual fund too. I decided to have some
mutual funds to diversify my money.
I mean, wouldnt it be amazing if you let your money work for you instead of you
working for more money?
Think about it. If you just rely on savings and your SSS or GSIS, it wont be that much.
Why cant you settle a special amount every month for another money wheel so at some
time or point in your life, you have 10 million or more. Time is ticking and time is money.
Start your investment now. Start by knowing the best mutual fund companies in the
Philippines this 2014.

Whats the difference between Mutual Fund and UITF?

Yeah I know lots of folk ask this question and Im gonna share their most differences for
now since Im gonna discuss soon about Mutual Funds vs UITF in the Philippines in a
separate page. They are almost the same as both are pooled investment, managed by
fund managers and their types (money market, bond, balanced etc) are usually the
same too. However, in mutual fund, the investor buys shares while in UITF, he
buys units. Thus in MF, they report NAVPS while in UITF its in NAVPU. UITF are
offered in banks here like BDO, Metrobank, BPI and the likes while MF are offered by
companies like Sun Life, Philam Asset Management Inc. and many more. UITF and
mutual funds also differ in redemption fees. Bottom line, your concern is always the
return so its important to learn and check their past performance before you open an
account. Start a relationship get to know a mutual fund and let a mutual fund company
get to know you.

To know more, read about Mutual Funds vs UITF and their Similarities, Differences,
Advantages and Disadvantages.
My own quote for today:
Wouldnt it be amazing if you let your money work for you instead of you
working for more money? Fehl Dungo
Now, share you investment strategies and insights in the comments below. See you
soon and thanks for reading!