More and more Filipinos are beginning to find mutual funds as a viable alternative investment instrument and with reason, a press release from SunLife Financial-Philippines said.

The ability of mutual funds to provide returns higher than inflation and other traditional deposits, makes them a really wise investment option.

While some have begun to appreciate the rewards of investing in mutual funds, others have yet to discover them.

A mutual fund is an investment company that pools money from numerous investors and in exchange, issues corresponding shares to the latter, the press release said.

The pooled funds are then invested by professional fund managers in various securities according to the investment objectives and policies of the fund.

The investment activity is aimed at increasing the value of the fund and consequently, the value of the shares of its investors. While there are no guarantees, its growth potential is limitless.

There are now 41 mutual funds in the market with over P60 Billion in assets under management as of April 2009.

While the returns of the funds are slowly picking up in the aftermath of the financial crisis, it is wise to say that, ‘It's not always about the yield. When investing, one needs to look for 3 things, at least: Yield, Safety and Liquidity.”

Diversification is another inherent advantage of investing in mutual funds. The more instruments one has in his investment portfolio, the better protected are his investments. In mutual funds, a minimal investment can give the investor access to a wide range of securities precisely because his money is pooled with the money of others. With a mere aP10,000, one enjoys the benefits of mutual funds.

Investing in mutual funds also allows investors to benefit from the expertise of professional fund managers who have the research capabilities, skills, knowledge, experience and commitment that allow them to decide when and what securities to buy and sell so as to yield the best possible returns to the fund and its shareholders.

Some mutual fund companies offer free inter-fund transferability feature. This is so because of the fact that investors' needs, preferences and investment objectives may change, so companies allow investors to shift their investments among certain funds up to 4 times a year, free of charge.

The world of mutual funds is indeed growing and opening up. More and more investors are slowly realizing why mutual funds are a viable investment option.

After all, who would not want the limitless growth potential?

And while they say returns are proportionate to risk, it is clear that there are enough safeguards to protect the mutual fund industry, the press release further said.*

back to top