Various Types of Mutual Funds
In the Philippines, a mutual fund is a professionally managed type of collective investment scheme that pools money from multitude investors and invests typically in investment instruments like stocks, bonds, money market vehicles, other mutual funds and commodities such as gold and silver.
The mutual fund is managed by a fund manager that purchases and sells the fund’s investments in accordance with the fund’s investment goal. In the Philippines, you can buy mutual funds in a mutual fund company. which is monitored by Securities and Exchange Commission (SEC). Mutual fund has many kinds relying on where the fund will be invested. The list below outlines several types of mutual funds in the Philippines you can purchase.
1. Stock/Equity Fund
Stock or equity mutual fund is the most common kind of mutual fund which is a fund spent exclusively on equities or stocks. The fund administrator selects stocks that he assured to be profitable to invest in. This type of mutual fund is the riskiest among mutual fund because the performance of this fund depends on the stock exchange but will throw you the best earnings. When you buy equity mutual fund, it is just like investing in stock market indirectly.
2. Balanced Fund
Balanced mutual fund is a kind of mutual fund spent in stocks and bonds which has little risk in comparison to equity fund. Balanced fund will impart you an normal earnings of investment.
3. Fixed-Income Fund
Fixed income mutual fund is invested in any instruments that give in fixed regular income. This type of fund has the lowest uncertainty of losing your money because this is not determined by on the stock market but will give you lesser return than equity or balanced-fund.
4. Money Market Fund
Money market fund is a kind of mutual fund spent in short interval debt securities. Money market fund confines loss of investment that may be cause by market, credit and liquidity.
Relying on your investing goals, you can purchase several kinds of mutual funds. Usually, in the Philippines when you apply for a mutual fund account in a mutual fund company, they will give you a group of questionnaires so that they can determine which mutual fund is best for you.
In my case, I purchased Equity and Balanced mutual fund in First Metro Asset Management, Inc. (FAMI), a reputable mutual company in the Philippines. If you want your money to be at the securest mutual fund, you must choose the fixed income fund, however, it will impart you very smallest revenue.
Bert Tenorio likes writing on finance, mutual funds and investing. Some of his articles include money remittance and how to Send Money to Philippines, feel free to drop by Financial Management , for free financial literacy articles on saving, investing and earn money online.
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