A mutual fund is an open-ended type of investment vehicle which
is operated by an investment company and
managed by a professional fund manager with the purpose of attaining a certain investment
objectives. The investment funds were
pooled from several investors for the purpose of investing in a group of assets
to produce income for the fund’s investors.
In the Philippines, mutual funds
were regulated by the Securities and Exchange Commission.
WHAT IS THE FUND PROSPECTUS?
Before you invest in any mutual funds, it is very essential
to read the fund prospectus of the fund you are interested to invest with. It
embodies all the significant information that you need to know about the fund
which is very crucial during your deciding process to invest with the fund or
not.
The fund prospectus may include but not limited to the
following information;
1.
The Terms and Conditions of the fund
2.
The Background of the company
3.
The Description of the capital stock
4.
The fund’s Directors and Officers
5.
The Principal parties (fund
manager, investment adviser & the custodian bank)
6.
Summary of the fund’s Financial Information
7.
The Risk Disclosure Statement
8.
The Risk Factors and Investment Considerations
9.
The Fund Mechanics
10.
The Investment Objectives and Restrictions of
the fund
11.
The Expenses and Dividend Policy of the fund.
CLASSIFICATIONS OF MUTUAL FUNDS
Mutual funds in the Philippines are classified according to the
following five (5) classifications:
1.
Stock or Equity Fund
Stock or equity funds are funds that were
invested mostly on shares of stocks issued by Philippine corporations. This
kind of mutual fund is good for aggressive type of investor. The main objective
of this fund is long term capital growth.
Among the list of Stock or Equity Funds offered in the trust market are
as follows:
1.
ATR KimEng Asia Plus Recovery Fund, Inc.
2.
ATR KimEng Equity Opportunity Fund
3.
First Metro Save and Learn Equity Fund
4.
Philam Strategic Growth Fund
5.
Philequity Fund, Inc.
6.
Philequity PSE Index Fund, Inc.
7.
Philippine Stock Index Fund Corp.
8.
Sun Life Prosperity Phil. Equity Fund
9.
United Fund, Inc.
10.
ATR KimEng AsiaPlus Recovery Fund, Inc.
2.
Balanced Fund
Balanced funds are funds invested in a
balanced combination of shares of stocks and fixed income investments. This
kind of investment is good for investors with moderately aggressive risk
profile. The investment objectives of balanced funds are both capital growth and
income.
Among the list of Balanced Funds being offered in the trust market are as follows:
Among the list of Balanced Funds being offered in the trust market are as follows:
1.
ALFM Growth Fund, Inc.
2.
ATRKE Philippine Balanced Fund, Inc.
3.
Bahay Pari Solidaritas Fund, Inc.
4.
First Metro Save and Learn Balanced Fund Inc.
5.
GSIS Mutual Fund, Inc.
6.
NCM Mutual Fund of the Phils., Inc.
7.
Optima Balanced Fund, Inc.
8.
Philam Fund, Inc.
9.
Sun Life Prosperity Balanced Fund, Inc.
10.
Cocolife Dollar Fund Builder, Inc.
11.
PAMI Asia Balanced Fund, Inc.
12.
Sun Life Prosperity Dollar Advantage Fund, Inc.
3.
Bond Fund
Bond funds are invested primarily on
fixed-income securities like treasury notes, government bonds and corporate
bonds. This kind of investment is good for investors with moderately conservative
risk appetite. Bond fund’s investment objectives are both capital preservation
and stable income.
Among the list of Bond Funds available in the trust market are as follows:
1.
ALFM Dollar Bond Funds
2.
ALFM Euro Bond Fund, Inc.
3.
ALFM Peso Bond Fund, Inc.
4.
ATR KimENG Total Return Bond Fund, Inc.
5.
Cocolife Fixed Income Fund
6.
Ekklesia Mutual Fund, Inc.
7.
First Metro Save and Learn Fixed Income Fund
8.
Grepalife Bond Fund Corporation
9.
Grepalife Dollar Bond Fund
10.
Grepalife Fixed Income Fund
11.
MAA Priviledge Dollar Fixed Income
12.
MAA Priviledge Euro Fixed Income Fund, Inc.
13.
PAMI Global Bond Fund Corp.
14.
Philam Bond Fund
15.
Philam Dollar Bond Fund, Inc.
16.
Philam Managed Income Fund
17.
Philequity Dollar Income Fund, Inc.
18.
Philequity Peso Bond Fund
19.
Prudentialife Fixed Income Fund, Inc.
20.
Sun Life Prosperity Bond Fund
21.
Sun Life Prosperity Dollar Abundance Fund
22.
Sun Life Prosperity GS Fund
4.
Money Market Fund
Money Market funds are invested in short term
bonds and money market investments with a very short time to maturity. This
type of mutual fund is best substitute for bank savings account and good for
conservative type of investors. The investment objective of this fund is more
on capital preservation.
Among the lists of Money Market Funds available in the trust market are as follows:
1.
ALFM Money Market Fund, Inc.
2.
First Metro Save and Learn Money Market
Fund,Inc.
3.
Philam Managed Income Fund, Inc.
4. Sun Life Prosperity Money Market Fund, Inc.
5.
Index Fund
An index fund seeks to match or shadows the
performance of a market index.
As of to date, there is only one Index Fund
being offered in the mutual fund market which is the ALFM Philippine Stock Index
Fund (PSIF).
ALFM Philippine Stock Index Fund was created
as an index tracker fund of the Philippine Stock Exchange Composite Index
(PSEi). This type of fund is appropriate for investors who are looking for long
term capital growth.