WHAT IS MUTUAL FUND?
A mutual fund is money pooled from a certain number of investors. Each fund has a specific mandate or purpose and a professional fund manager who invests the money based on the specific strategy and goal of the fund.
- A mutual fund allows many investors to pool their money.
- Professional money managers invest in a diversified portfolio of securities.
- They keep funds under constant supervision.
- They use their knowledge of securities and changing market conditions.
- They invest the pooled assets in many different companies in a variety of industries.
- As an investor, you own shares in proportion to your investment.
- You receive your proportionate share of any earnings on the investment funds.
THE BENEFITS OF INVESTING IN MUTUAL FUNDS
Professional Management
One of the main advantages if investing in mutual funds is the fact that it affords its investors the services of full-time professional fund managers.
diversification
Investing in a mutual fund provides instant diversification. This is the practice of investing broadly across a number of different investment instruments and securities to reduce risk and maximize earnings potential.
potentially higher returns
Because a mutual fund is pooled and managed as a single investment portfolio, it is able to take advantage of certain economies of scale
low capital requirement
Mutual funds are highly regulated by the Securities and Exchange under the investment Company Act and its rules
Great equalizer
Mutual funds are the "great equalizer" in investments. The yield of those investing 5,000 pesos is the same for those investing millions of pesos.
liquidity
Liquidity is the ability to readily convert investments into cash. While the law provides that redemption proceeds must be given within seven banking days from the date of the request, most funds are able to pay the redemption proceeds within 2-3 banking days.
SAFETY
Mutual funds are highly regulated by the Securities and Exchange under the investment Company Act and its rules
TRANSPARENCY
Mutual funds investors have the right to transparency and are entitled to know and check whether the funds are invested which can be found in annual financial reports and fund fact sheets.
TAX EXEMPT
Gains realized by investors upon redemption of their mutual fund shares in a mutual fund are excluded from the definition of gross income, therefore these are not subject to personal income tax.
This benefit alone makes it more profitable investing in mutual funds, versus other regular investment instruments.
Why mutual funds?
Having a mutual fund is like having a worry-free savings account that yields a potentially higher return. You just invest and let the fund managers do their job.
Investing monthly is not compulsory, but of course, since we all have our financial goals, it is better to have some discipline in investing. Also, remember that in investing in mutual funds, staying long term is the key!
To have an idea, let's take this chart as an example.
Mr. Investor started investing in 1995 when the shares was at P1.1095 per share and he invested 5,000 pesos to buy Philequity shares. He had forgotten his fund since then (no additional investment was made) and was surprised to see that the shares went from P1 to a whopping P39.9158 per share as of July 2019 and his 5,000 pesos is now valued at P179,882! Basing on the chart, the actual return of investment was 3,498%.
What if Mr. Investor invested consistently?
What if Mr. Investor stayed longer?
Can you imagine how much passive income he can have?
Imagine how much passive income YOU can have if you start investing right now.
Why investing is more fun as an IMG Member
Here are some reasons you'd love!
Soldivo Mutual Fund Shares
All new members* become automatic mutual fund investors in Soldivo Strategic Growth Fund
* Starting January 2020
Mutual Funds at 0% Entry Fee
If you invested P5,000 pesos, you will also get P5,000 worth of shares. That's how mutual funds at 0% entry fee works.
Acess to Investment Seminars
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DISCLAIMER: IMG does not sell mutual funds. All mutual funds are sold by Rampver Financials.
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