What are Mutual Funds?

A lot of people are very interested to invest in 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

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.

For example:

You want to invest 5,000 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 2019. 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 mutual fund company near you or just open through COL Financial, a stock broker in the Philippines that also serves mutual funds. First Metro Sec also offer them.

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.

Learn more about mutual funds by going to the following page:

Mutual Funds Guides, Tips, Updates

About Fehl Dungo

Founder of DailyPik, trusted fund manager and investor. I have a Degree in Accountancy and a background in Finance. I analyze stocks everyday. COPY my Portfolio on eToro Connect with me on Facebook

22 thoughts on “What are Mutual Funds?”

  1. Hi Ms. Fehl,

    Nag iinquire po ako sa BDO Meycauayan-Malhacan regarding their UITFs at kung anong plan ang maooffer nila sakin for my goals.., Ang pagkakaintindi ko po kasi sa UITFs ay ung fund manager na ang bahalang mamili kung ano anong stocks ang bibilhin galing sa ininvest ko sa kanilang pera., pero iniinsist nung naka usap ko na sa UITF daw po kailangan ko lang mag invest ng P10,000 min. tapos ako na daw po ang pipili kung ano anong stocks ang bibilhin gamit ung P10,000? tama po ba itong sinasabi nitong nakausap ko?, mali lang ba ang pagkaintindi ko regarding UITFs? or maling tao lang po ang humarap sa akin?

    Patulong naman Ma’am.., ang plano ko po kasi ay invest sa UITF ang 50% ng savings ko and then direct invest sa stocks (of my choice) ung remaining 50%.., e parang nalilito na ulit ako now na may nakausap ako from BDO…

    Thanks

    Reply
  2. ONE LAST COMMENT ON FLIPPING MUTUAL FUNDS

    The whole idea of a Mutual Fund, is the same as with a UITF…They are funds..If you read Fehl’s explanation, above, you will see they are very similar, to UITF’s, except, they are more like a stock, paying you dividends, to hold on to them…In the old days, people bought stocks, and held on to them, forever, being paid, what is called, dividends, or rent, or interest, or a plea with you to not sell, and stay in for the long term, which people did…Now, with corporate raiders, flippers, funds and fund managers, and investment firms, if you go it alone, and become a one, or two stock holder, you could be left holding the bag..This is why, now days, people who buy one, to 10 stocks and hold them forever, if they lose out, they are called, “Brown baggers”

    So, when you join a Mutual Fund, UITF, or invest with financial institution, you are joining, yes, the bad guys, who screwed up the stock market, which in the past, gave everyone, rich or poor, a chance to invest and watch their money grow….(IN MOST CASES) but don’t feel bad…There is an old saying, “If you can’t beat them, join them…” They are not bad guys, mostly, they only flip and fund your money for you, which in actuallity, keeps things fair and honest….LEGAL ALSO

    This is why, as you all know, I prefer UITF’s…UITF’s, for me, are easier to wrap my brain around it, and I can still flip them, if I wish, with little formalities to jump over..Yes, UITF’s, have trusties, unit managers, fund managers, and all of that, and yes, there is over sight, and no dividends, but all of these safety valves are only as good and honest as the people are who run them, no matter that fund type…I do not want to make everyone paranoid, but when you invest, you must decide risk level, and no matter what level you chose, you must assume, there is some level of corruption…You just have to: and if you don’t you are a dead duck..

    I prefer the UITF’s, because it is a direct reflection of the banks involved, and if you check the bottom of the UITF website, where you find your NAVPS (Net Asset Value Per Share) for each and every fund that bank holds, and at the bottom, is a list of banks, who are in the UITF fund happy group…This is big money, big business, and yes, if someone screws you, the bank will be on ANC CBN and 60 minutes, trust me and they don’t want that…BDO is so worried about all of the bad press they have been getting, they have their twitter page on private and no one can see the tweets, unless they allow you to see them…NOW…What was the first thing that came into your mind?

    In all fairness to BDO UNIBANK INC, they are one of the safest banks, in the world, yes, world, and this safety is from this paranoid attitude…AND BEING CHINESE OWNED…They are so worried about something big, hitting the social media platforms, true, or not true, they hide it..For me, I believe, it is better to have out in the open, the good, bad, ugly, and lies, so you can respond to them, but that is American, thinking..In America, we pride ourselves on companies being caught, going to jail, paying huge fines, regulations, and being open and honest…This is why we are the largest economy in the world, still today and my State, California, with all of the hate mail we all get about being liberal, we are still a bigger economy than most countries and 7th in the world, so being regulated, following rules, and being honest, is great for long term growth and yes, being corrupt, dishonest, is great for quick returns, but gowning to jail is not fund (FUN)

    This why, I prefer the UITF’s…I like the openness, the fear of being Seen as corrupt, loss of face, or hiya, and this all means, less risk..I SAID LESS RISK, NOT NO RISK, LESS….But, BDO’s website, did hide the NAVPS (Net Asset Value Per Share) from its investors,for over a week, and finally allowed us to see our graphs, on the 24th, and this was done to prevent people from selling off more and causing the funds to go down more..My questions is, did the trusties and fund managers get to see this information and were they able to sell high and now buy back low and we the banking public, were not allowed?

    There is no way, it was the website, or the ISP’s, or Globe communications, or IT people who are blamed for everything, so be careful, you are being watched…Film at 11

    Reply
    • Hey King Kano. Although your comment is a year old, I would like to communicate with you. I like where u r coming from with ragard to investing.

      I am a Californian by birth but reside in Quezon Province. Been investing for many, many years rather successfully. Would appreciate ur input on PSE and UITFs.

      Please friend me on facebook, google or twitter. Profile name Queenie Makulit.

      Cheers.

      Reply
  3. hello ms. fehl.meron na ako col account at nag invest na rin ako sa stocks 4months na.then nag appear sa col account ko na may mutual fund na at meron ako questionnaire na sinagutan about sa MF at lumabas na moderate aggressive ako at kelangan ko lang iinvest ay money market,bond and balance fund lang at wala dun ang equity fund na yun ang gusto ko iinvest,ano ang dapat kong gawin para maka invest dun sa equity fund na gusto ko. thank u in advance :))

    Reply
  4. Hi FehL, Thank you so much for helping newbie’s like me, may God bless you and your family. Been reading blogs and books to increase my financial intelligence and IMHO your blog is the best. After a month of gathering information I think I am now ready. I’m just waiting for COL’s approval for my application and hopefully I can start as soon as possible. I also want to invest in mutual funds but I’m confused which one is the best for me. My choices are Either PhilEquity Yield Fund, inc OR PhilEquity PSE index Fund, inc. ? I am a passive type and looking for a 10+ years term and is planning to invest 500K in one day and wait rather than topping up monthly.

    Reply
    • Thanks Christian. Your choices are great. Equity Funds are suitable for 3 years or more so if your investment horizon is like that, you’d see more earnings by then

      Reply
  5. Hello po.balak ko po sana mag invest piro di ko Alam Kong anu palagi po ako nag babasa about investment.pwd nyu po ba ako matulongan.at anu maganda.thank u po

    Reply
    • Hi. It would help so much if you read more about mutual funds and other investments to learn more because it is important before you invest. You can use our guides 🙂

      Reply
  6. Hi Fhel,

    What would be the difference between Col’s MF with investing directly to the MF company like Phil Equity? I was thinking of investing Phil Equity MF but then I heard about Col having MF soon and want to see things clearly.

    Thank you 🙂

    Reply
    • COL is just a broker, not really the MF company. COL is a platform or a bridge to make things easier for investors. The performance of the MF will still be the same using COL or investing directly with the MF.

      Reply
      • Not exactly, what was said, could I wrap my brain around the COL as a broker firm, so they will charge me more for the purchase, such as , higher price to me for the MF, as their fee, or they charge fees, separately, at time of purchase, or fee me, once I sell, or annually? I know I can look this up with PHIL and COL, but I would like to see it outlined by you here, in your words…LOL sori to make you do more, but you explain things maybe better for your readers, since you know how to speak Ta gala-english LOL…I know your readers love you and fully trust you, so this is better said buy you my super good friend

        Reply
  7. my MF agent wont let me change from bond fund to equity fund instead he wants me to buy another equity fund. I know his real intention is to increase his commission by giving another policy. Any tips what to do?

    Reply
    • I know that MF has its pros and cons. That’s what I don’t like about MF. There are fund managers like that. Actually, the difference about the gains between the MF and UITF is just so minimal. I want to have control with my investments that’s why I chose UITF

      Reply
      • They are almost the same – managed by professionals, have different types of funds, risky and rewarding but MF are regulated by SEC while UITF by BSP

        Reply
    • Well does he want you to or suggest you to? Whatever his intention is, always follow your own decision because it’s your money and you know your objective better than anyone 🙂 If you can take bigger risks and you believe you’ll earn more with equity fund, then go for it. Cheers!

      Reply
  8. Good morning,

    Applicable din ba ang Cost Averaging and Flipping sa MF? If yes, ano ang mas preferable na method? Thanks in advance…

    Reply

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