The Major Benefits of investing Mutual Funds

Kung wala kapang Time, Knowledge, Capital at medyo takot kapa dahil baka malugi ka sa Stock Market, ito ang nababagay para sa'yo...Ito ang tinatawag na Mutual Funds.

Sa Mutual Funds ikaw ay “INDIRECT INVESTOR” dahil merong Professional Fund Manager(s) na mag-manage ng portfolio mo, hindi ikaw ang magde-decide kung anong mga companies ang bibilhin.

Ang Mutual Funds ay pinagsama-samang pera ng mga investors, kunwari yung P100,000 ko, P5,000 mo at P10,000 ng kaibigan mo pagsasamahin ng Fund Manager yan at dahil malaki ang budget, ibibili yan ng mga “Blue Chips” Companies like Jollibee, SM, Ayala, Globe, etc. Now, kapag kumita na ibabalik ito sa mga investors.

Kunwari kumita ang Mutual Fund Company ng 12%.

Ang kinita ko sa P100,000 ay P12,000 (P100,000 x 12%)

Ang kinita mo sa P5,000 ay P600 (P5,000 x 12%)

Ang kinita ng kaibigan mo sa P10,000 ay P1200 (P10,000 x 12%)

For me Mutual Funds is the best way to start investing sa Stock Market dahil:

1. Ito ay Professionally Managed

Kung nag-sisimula ka palang sa pag-iinvest much better na ipaubaya muna natin ito sa mga experts (Professional Fund Managers) at kapag familiar kana sa sistema ng Stock Market dun kana mag-start ng direct investing. Kumbaga sa pampasaherong jeep, kung hindi ka pa marunong mag-drive, ipaubaya mo muna ito sa driver. Sumakay ka lang muna at makakarating ka ng safe sa pupuntahan mo.

2. Ito ay very Liquid

Meaning anytime pwede mong i-withdraw, some MF companies may mga charges pero kapag nalagpasan mo na ang holding period wala na itong charges. Parang bank lang din ang MF, ang pinagkaiba lang ay sa Bank madali mo siyang makuha sa thru ATM, unlike sa MF 3-7 days pa para ma-withdraw ang pera. So, wag na wag mong ilalagay lahat ng pera mo sa MF, make sure na may laman pa rin ang Savings Account in case of emergency.

3. Ito ay mayroong Low Minimum Investment Requirement

For as low as P1,000 - P5,000 you can open ang account in MF (some MF companies requires P10,000 – P100,000 to open an account). Ma-swerte tayo sa panahon ngayon dahil mababa nalang ang investment requirement, unlike dati na kailangan mo talaga maglabas ng hundred thousands para makapag-open ng account sa MF. Sa panahon ngayon khit minimum wage earner, magbabalot, janitor, construction worker, etc. pwede na maging INVESTOR. At kung mag- iinvest ka monthly pwede ka mag-top up basta minimum of P1,000.

4. Ito ay very Transparent

May matatanggap kang SOA (Statement of Account) quarterly, dun nakalagay kung ilang shares na meron ka at magkano na total ng kinita ng pera mo. Since Shareholder ka ng MF Company, may karapatan kang umattend ng mga Shareholder’s Meeting, dun ididiscuss kung saan ba ininvest ang pera natin, ano ba naging performance this past few months or year. Sa Mutual Funds you’re a Shareholder or Stockholder of the Company.

5. Ito ay Diversified

Yung P5,000 mo na yun ay mabibili agad ng minimum 10 BIG Companies (Blue Chip Companies) yan yung mga companies na matatagal na talaga. Hindi ka basta basta malulugi sa MF dahil DIVERSIFIED na siya, dahil khit malugi man ang 3 companies let’s say si PLDT, Meralco, BDO. Yung remaining 7 companies naman ay kumita, still kumita ka pa rin.

6. Enjoy forever Zero Sales Load or Entry Fee

Ibig sabihin nito ay walang kaltas ang pera mo. For example nag-open ka ng MF Account mo with 5,000 minimum initial investment. Kung Zero Load ang Mutual Funds mo buong buo yang 5,000 mo ay ibibili ng shares. Pero kung hindi yan Zero Load may ibinabawas na around 3% sa pera mo and every time na magdadagdag ka ng investment mo may 3% pa rin na ibabawas dito.

7. Gains/ Profits are Tax-Exempt

Kapag bumili tayo ng isang bagay merong tinatawag na sales tax/value added tax. Kapag nag-withdraw tayo sa savings account natin merong tinatawag na withholding tax at kahit na mamatay tayo meron pa ring tinatawag na estate tax. Pero sa Mutual Funds, walang tax. Kung ang money mo sa MF ay P100,000 at nagwithdraw ka, buong-buo walang labis, walang kulang P100,000 pesos pa rin yan.

What is the NAVPS?

NAVPS/ NAVPU (net asset value per share/ unit) is the value of one share/ unit of a mutual fund. This is computed by dividing net assets by the number of shares/ units held by an investor. Fund managers buy and sell shares/ units in a mutual fund according to the NAVPS/ NAVPU, which changes every business day depending on the market value of the assets of the fund.
If the NAVPS/ NAVPU of the mutual fund you are invested in increases or appreciates, you can sell your mutual fund shares/ units for a profit. In the same way, if the NAVPS/ NAVPU of the mutual fund you are invested in decreases or depreciates, you may realize a loss if you redeem.

Like any other investment instrument, mutual funds are best held long-term especially for mutual funds that have investment objectives of capital growth such as equity funds.

There are four (4) basic types of mutual funds in the market

Money Market Funds

Invest in short-term debt instruments like time deposits.

Bond Funds

Invest in long-term debt instruments of governments or corporations

Balanced Funds

Invest both in shares of stock and debt instruments.

Stock Funds / Equity Funds

Invest primarily in shares of stock.

Common Types of Mutual Funds Investors

The conservative investor

Your aim is to protect your capital even with minimal growth.

The moderately aggressive investor

You are looking for a sensible mix to maximize your investment over the long term.

The aggressive investor

You want a potentially higher growth over the long-term.

How to Begin MUTUAL FUND Investments?

There are 2 options to start your Mutual Fund investment:

FIRST OPTION: Pwede kang mag-open ng Mutual Fund account diretso sa mga Mutual Fund Companies. Maghanap lang ng agent or ng CIS (Certified Investment Solicitor) sa kanilang office upang ma-assist ka nila.

Here are the list of TOP Mutual Fund Companies in the Philippines that I know:

Philam Asset Management, Inc. 12th Floor, Ayala Life-FGU Center, Ayala Avenue, Makati City

Sun Life Asset Management Company, Inc. Rizal Dr, Taguig, Metro Manila

ATR Asset Management, Inc. 17th Flr., Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue 1226, Makati City

Philequity Management, Inc. Suite 2004-A, East Tower, Philippines Stock Exchange Centre, Exchange Road, Ortigas Center 1605, Pasig City

Soldivo Funds under Rampver Financials Unit 2202, 22nd Floor, Antel Corporate Center, Valero, 3 Access Rd, Makati City

First Metro Investment Corporation GT Tower, Ayala Ave, Makati, Metro Manila

Maaari kang magpunta sa offices nila upang makapag-open ng MF account. PERO, may tinatawag silang Entry Fee or Sales Load na ibinabawas sa tuwing tayo ay mag-iinvest, usually nasa 3.5% ang charges depende sa mutual fund company.

For example ay nag-invest ka ng P100,000 sa isang MF company. Automatic yan ay may ibabawas na 3.5% sa perang ininvest mo. P100,000 x 3.5% = P3,500 Ibig sabihin may ibabawas na P3,500 sa perang ininvest, instead na buong P100,000 ang perang naibili mo ng shares ay nabawasan pa at naging P96,500. At sa tuwing dadagdagan mo pa ang investment mo ay may ibabawas pa rin na Sales Load.

SECOND OPTION: Pwede kang mag-open ng Mutual Fund account through IMG (International Marketing Group). Kaya kung isa kang member ng IMG ay sulit na sulit ay iyong membership dahil isa sa mga benefits ng member ay ZERO LOAD sa Mutual Fund Investments. Ibig sabihin kung halimbawang P100,000 ang na-invest mo ay buong buo yan walang bawas mabibili lahat ng shares.

Wealth Calculator

Dito mo malalaman kung magkano ang projected value ng investment mo sa Mutual Funds or Stock Market.

Monthly Savings: Ito yung kaya mong ipunin every month, sa picture ay may nakalagay na example: 1,000 pesos hanggang sa 10,000 pesos.

Annual Interest: Depende ito sa paglalagyan ng Mutual Fund account mo, sa picture ay:

4% - Madalas ito ay mga pang short-term goal yung tipong 1-3 years ay kukuhanin mo na ang investment mo. Kung ikaw ay yung tipo na taong hindi risky sa mga investment ay mas mainam na dito mo nalang ilagay, maliit ang kita pero maliit lang din ang lugi ng pera mo kung sakali.

8% - Kung ikaw ay yung tipong investor na sakto lang ang risk appetite, dito mo ilagay ang funds mo. Atleast 5 years of investing para maramdaman mo ang return nito.

12% and above - Ito ay fund na talagang risky, kung ang goal mo ay short-term or medium term ay hindi advisable na ilagay mo ito dito. Pero kung ikaw ay long-term mag-isip, yung tipong pang College Education ng anak, Pambili ng House and Lot, Travel. Retirement Money, dito mo ilagay ang fund mo. I recommend to invest sa ganitong klase ng fund kung ang goal mo ay 5 years pataas.

Number of Saving Years: Makikita sa picture kung magkano ang projected value nito after 5, 10, 13, 15, 20, 25, 30. The longer you save and invest, mas malaki ang return nito. Sa pag-iinvest napaka-importante ang longterm at consistency.