DIFFERENT TYPES OF MUTUAL FUNDS THAT WILL CATER YOUR NEEDS.

               As I mentioned in my previous blog there are several types of mutual funds. Today I would discuss some of the more common type of funds available in the market. To know more details on mutual funds and their respective yields, log on to www.icap.com.ph.

What are the Types of Mutual Funds?
1. Bond Funds(Fixed Income) - These type of funds invest in government securities as well as some corporate issued bonds. These are the type of funds that has the lowest risk but also yields modest returns. Usually the average yield range from 4%-8% per annum. This fund is for conservative investors as well as people who are risk averse but considering its rate of return it is still better than most savings deposits and time deposits given its liquidity.

2. Stock/Equity Funds - These type of funds invest in variety of stocks and equities of publicly listed companies in the Philippine Stock Exchange. These funds generally has the highest potential rate of return but also has the highest risk. The average yield for these type of fund ranges from 12%-18% per year or even more. These funds are designed for aggressive investors as well as those investors seeking growth for the long term.

3. Balanced Funds - These type of funds combines profitability of equity investments and the stability of fixed income instruments. These funds generally allocates a portion of your investment to equities and a portion to bonds, this way the risk will be lower and the returns can be maximized. This is also one of the good choice of investment for conservative investors. The average yield of these type of funds ranges from 8%-12% per year or even more.

So what is the best fund for me? The answer lies in the needs of the investor and their investment objective. Well there are the type of funds you can choose from. Companies name funds differently so you better ask how the asset allocation will be as well as the potential returns and risk involved. Remember to always do your due diligence before going into any investment because nobody will be better to make decisions for our hard earned money than us.

In my next blog, I will discuss some concepts and techniques in investing. Watch out for that

AN ALTERNATIVE INVESTMENT FOR YOUR MONEY IN 2011

            If you're looking for a safe and an alternative investments for 2011, why don't you try MUTUAL FUNDS. Mutual funds are investment companies that pool money from numerous investors with the same investment objective. Through the issuance of its shares to the public, the pooled funds are then invested by professional fund managers in a diversified portfolio of securities or investment instruments. It is safe because it is highly regulated by the SEC and it has a lot of investment restrictions. It is also affordable because you can already open an account and invest for as low as P5000 and P1000 for your succeeding investments. This is a great way to grow your money and to be able to meet your financial goals in the future. 

What are the benefits of investing in mutual funds?

1. Professional Fund Management - Professional Fund Managers will be handling your money and invest it for you. You can get a FUND FACT SHEET to know where your money is invested

2. Diversification - This eliminates the risk that a company might fold up or the bond issuer to go bankrupt and unable to pay its debts.

3. Asset Allocation - Fund Managers mix different classes of assets to maximize your returns and reduce risk.

4. Liquidity - Your money is always available. No need to find a buyer since the fund is always ready to buy back its shares from you.

5. Compounding - The best feature of a mutual fund because money growth is compounded meaning your interest gains interest with the principal continuously.

These are just some of the benefits in investing in Mutual Funds. But remember that any kind of investment has a corresponding risk. Generally the higher the return, the higher the risk.

But before you invest take time to learn the different types of funds and how each can fit your investment appetite. To know more about mutual funds, feel free to contact me. I hope to be able to help in any way i can. 

Watch out for my next blog post as I discuss the types of mutual funds you can invest in as well as my recommended fund for your needs.