A lot of people are very interested to invest on Mutual Funds but what are Mutual Funds? Why should we include them in our investment portfolio? Are they better than stocks?
To answer our growing questions about mutual funds, let us first discuss what they are here.
What are Mutual Funds?
They are simply a type of investment where you join other investors and corporations to form a massive fund which will be handled by fund managers for diversified portfolios of stocks, bonds, securities, money markets and other mutual funds.
Fund managers are experts or professionals who execute strategies and skills to improve the performance of mutual funds to make more profit or gains in spite of risks.
You want to invest 5000 every month. You believe your fund will appreciate more in value and you’re aware of the risks. Your goal is 5 years. You think you’ll go with Equity Fund.
Where should you invest?
First check out the best performing mutual funds 2018. Past performance will give you an idea who performed well although it may not assure you future performance.
Visit each MF’s latest Fund Fact Sheet and Prospectus (usually available at their official website). These reports will help you know the strategies, performance, benchmark, fund allocation, and equities about the mutual fund.
Then get to know the Fund Managers of the mutual fund you’re interested to invest with. For example, you want to try Sun Life, check out their Fund Managers at their corporate website’s page. This will let you know who the captains of the ships are.
Once you’re ready and your decision is final, you can open your Mutual Fund on the branch of the MF company near you or just open through COL Financial, a stock broker in the Philippines that also serves mutual funds.
Things to know before you invest Mutual Funds:
- Like other investments, mutual funds have risks – how much risk can you take?
- Have a goal or a target – how long do you plan to invest and what are you investing for?
- There are different types of Mutual Funds, know which one suits your goal and risk appetite
- Since MF are managed by professional fund managers, there are fees involved like front end fees (sales load) and back end fees (redemption fees)
- You buy shares when you invest and they are based on NAVPS (Net Asset Value Per Share)
Mutual Funds are smart investment and as always the earlier and longer you invest, the more money you will make.
You don’t only need to invest time and money when you’re investing on mutual funds. You must also invest knowledge and expand your financial views. No worries, our posts here will surely help you.
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