Different Kinds of Mutual Funds
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In the Philippines, a mutual fund is a professionally managed type of collective investment action that put together money from many investors and invests commonly in investment instruments such as stocks, bonds, money market instruments, other mutual funds and commodities such as gold and silver.
The mutual fund is managed by a fund manager that buys and sells the fund's investments in accordance with the fund's investment objective. In the Philippines, you can purchase mutual funds in a mutual fund corporation. which is regulated by Securities and Exchange Commission (SEC). Mutual fund has many types depending on position the fund will be invested. The record underneath summarizes several types of mutual funds in the Philippines you can buy.
1. Stock/Equity Fund
Stock or equity mutual fund is the best typical kind of mutual fund which is a fund invested purely on equities or stocks. The fund manager chooses stocks that he determined to be advantageous to invest in. This type of mutual fund is the riskiest among mutual fund because the achievement of this fund rests on the stock market but will give you the highest earnings. When you buy equity mutual fund, it is just like investing in stock market secondhand.
2. Balanced Fund
Balanced mutual fund is a kind of mutual fund invested in stocks and bonds which has little risk compared to equity fund. Balanced fund will give you an average return of investment.
3. Fixed-Income Fund
Fixed income mutual fund is invested in any instruments that yield steady normal revenue. This kind of fund has the least risk of losing your money since this is not dependent on the stock exchange but will give you lower return than equity or balanced-fund.
4. Money Market Fund
Money market fund is a type of mutual fund spent in short term debt securities. Money market fund limits loss of investment that may be outcome by market, credit and liquidity.
Depending on your investment principles, you can purchase various types of mutual funds. Normally, in the Philippines when you inquire for a mutual fund account in a mutual fund firm, they will issue you a set of questionnaires so that they can determine which mutual fund is preferred for you.
In my study, I bought Equity and Balanced mutual fund in First Metro Asset Management, Inc. (FAMI), a famous mutual company in the Philippines. If you like your money to be at the safest mutual fund, you should pick the fixed income fund, however, it will give you very minimal return.
Article Source: Articlelogy.com
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