Performance Task 2:

Your Choice of
Investment

Members:
● Agbalo, Cassandra Ruth
● Padua, Ezra Kiel
● Princesa, Micaella Shane
● Untalan, Donna Mae

Section:
● 12 ABM - E. Mayo
Investment
❖ Mutual Funds (Balanced Mutual Funds)

Amount of investment in pesos

- Each of us would invest ₱50,000.00. Total investment is ₱200,000.00.

❖ Why did we choose Balanced Mutual Funds as our investment?

1.) Diversification
- Choosing balanced mutual funds has lesser risks because the money we
are investing will be put into different companies. It will not be stagnant
into only one type of investment. Therefore, the money that we will be
investing will be spread out and with that, the risks will also be lesser while
maintaining the expected return of our investment.

2.) Professionally managed by experts

- Balanced mutual funds are managed by a financial professional that has
expertise in this type of area. They assist their clients in determining what
is appropriate to invest in and guarantee that the funds operate well.

3.) Reduces the need to own multiple funds

- We won’t be needing to invest in both equity and bond funds because
balanced mutual funds include these. Therefore, monitoring the money
that we have invested would be easier and less complicated because we
only have one account to monitor.

❖ Risks of investing in Balanced Mutual Funds

1.) Lack of Control

- Investing in mutual funds, particularly in balanced funds signifies trusting
the professionals in terms of decision-making. Thus, the investors have no
authority to control the decision on how much investment should be made
for equity and bonds. All decisions are to be made by the professional
fund manager.
2.) Fees
- Since the funds' manager is responsible for implementing a fund’s
investment strategy and managing its portfolio and involves doing a tough
job by analyzing both equity and debt markets in order to optimize returns,
the fund fee charged is comparatively higher which can reduce the overall
return.

3.) Underperforming Assets

- Sometimes the market does not behave as expected and some
investments may underperform and fail to deliver the expected returns. A
balanced fund may hold some assets that are not performing as well as
others, which can reduce the overall returns of the fund.

❖ How to cover those risks

1.) Lack of control is a serious risk because we are putting our money in the hands
of someone, but on the other hand that someone is more professional in the field
than us. Because of this, we will be very careful about who we are going to trust
and choose someone who is eligible and legitimate. But just because we are
going to be hiring a manager, that doesn't mean that we won't study the market.
In studying the market we can make sure that we are not being fooled.

2.) Fees are inevitable in making investments, but as an investor, you must first
know the purpose of the fees you will pay so that you do not overpay and you are
assured that they will be directed to the appropriate place.

3.) Each portfolio should ideally be focused on a specific goal. Don't be tempted by
current volatility to change your asset allocation. Monitoring fund performance
and taking necessary actions is just as important as investing regularly.
 ❖ The returns or earnings from this investment

On January 2023 the NAV (Net Asset Value) per share on PhilEquity Fund is Php
33.948. We bought 5,890 shares.

On January 2027, the NAV is Php 115.00.

Initial NAV (Net Asset Value): Php 33.948

No. of shares bought: 5,890 shares
NAV on January 2027:

Initial total value:

Initial total value = Initial price per share × no. of shares bought
Initial total value = Php 33.948 × 5,890
Initial total value = Php 199,953.72

(On January 2027):

Final total value = current price per share × no. of shares bought
Final total value = 115.00 x 5,890
Final total value = Php 677,350.00

Gain = Final Total Value - Initial Total Value

Gain = 677,350.00 - 199,953.72
Gain = 477,396.28

★ References:

https://www.dbs.com.sg/treasures/articles/wealth-feed/advantages-and-disadvantages-o
f-balanced-funds?fbclid=IwAR3OWPAaq0_I0zgQGg8iuSQuDMnU-WBCsIqlkuZtYwOEh
PbsQDkbjI7SYSs

https://infimoney.com/balanced-funds/?fbclid=IwAR1iDDlmVhDS1a9VTqp8iIeFd-W0Cv
Frx-LdyiHMevZ0HM25svuepqUTqfY#High_Fee
https://learn.financestrategists.com/finance-terms/balanced-mutual-funds/#:~:text=Ther
e%20are%20a%20few%20drawbacks%20to%20using%20a,stock%20market%20or%2
0individual%20asset%20classes.%20More%20items

https://www.philequity.net/pmpi.php?mode=Snapshot&fbclid=IwAR2C_IveR52Dpg2Wh
HrijkKIK4Ajd5c72_pYdcrr5s7hb9Z9Zp2xdf0J0dE