Kinds of Mutual Fund in the Philippines





In the post "Mutual Fund Basics", it was mentioned that Mutual Fund is a pool of money collected from investors and invested in various financial instruments. There are four major types of mutual fund in the Philippines where you can invest namely:

1. Growth or Equity Fund - in this type of mutual fund, the money collected is invested on various stocks in the Philippines or the Peso Growth Fund. There are also Dollar Growth Fund wherein the fund managers invested the money in global stocks like in US, Japan and etc. This fund is ideal for those who wanted to invest in the stock market but do not have the time nor the expertise to directly select, monitor, and manage their own stock investments. This type of mutual fund is suitable for investors with an aggressive risk profile. Though high risk, it is also offers high return potential specially in the long run.


2. Fixed Income or Bond Fund - the investment objective of this fund is to generate a steady stream of income through investing in a diversified portfolio of high-grade peso-denominated fixed income instruments like bonds, government securites, special deposit account, and etc. This fund is suitable for investors with at least moderately conservative risk profile. Returns are usually good enough for capital preservation against inflation rate.




3. Balanced Fund - this is a hybrid of the Equity Fund and Bond Fund and so long-term capital growth is derived from a diversified portfolio of equity and fixed-income securities. The fund is suitable for investors with high risk appetite but less risky than the Equity Fund. It also offers high potential return.

4. Money Market Fund - the objective of this fund is to seek capital preservation and stable income from a diversified portfolio of short-term bonds and money market instruments. Returns are comparable with 91-Day Treasure Bills and higher than savings account interest rate. However, though low risk, the return on this fund is not enough to cover the inflation rate.




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