Mutual Fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or asses, or combination of these investments.

In Philippines, mutual fund is becoming popular for investors generally because of the following advantages:

• Professional Management - there is a professional money manager dedicated to research,select, and monitor the performance of the fund purchases.
• Diversification - Don’t put all your eggs in one basket. This is one of the great benefits of mutual fund. In mutual funds, your investments are distributed across the wide range of companies and industry sector which in turn lowers the risk.
• Affordability - You can enroll to a mutual fund to as low as Php 5,000 ($119) initial payment, succeeding purchases or both.
• Liquidity - It is easy to liquidate. Investors can redeem their share based on the current NAV (Net Asset Value).

However, mutual funds have also disadvantages that all the investors should not fail to consider.

• Cost / Charge - in applying for mutual fund account, the investor must pay sales charges, annual fees and others expenses whether the fund performs positive or negative.
• Uncontrollability - the management of fund relies mainly on the hand of the fund manager. The investor can’t influence which securities the fund manager buys and sells or the timing of trades.
• Price Uncertainty - the price at which you purchase or redeem the shares depend on the fund’s NAV. NAV price is calculated many hours after you’ve place order, unlike stock where you can obtain the price in real-time.

Mutual Fund is one of the best option available for investors to save for retirement and other financial goals but please keep in mind that mutual funds also involves risk.

With the mutual fund advantages and disadvantages taken into consideration, I decided to open a mutual fund account in Philippines. So that when in the future I have some cash to spend on my retirement or fund to use as capital should I decided to start an offline business.  To me this is better than putting it in a time deposit that have only 4% interest per annum.

To those who are interested to know the list of Mutual fund in the Philippines here it is. The mutual fund list from the Securities Exchange and Commission.

Stock / Equity Funds

1. ATR-KIM Eng Equity Opportunity Fund
2. First Metro Save & Learn Equity Fund
3. Philam Strategic Growth Fund
4. Philequity Fund
5. Sun Life Prosperity Phil. Equity Fund
6. United Fund

Balanced Funds

1. First Galleon Family Fund
2. GSIS Mutual Fund
3. Legacy HY Fund
4. The Mutual Fund Co. of the Philippines
5. Philam Fund
6. Sun Life Prosperity Balanced Fund
7. Sun Life Prosperity Dollar Advantage Fund (US$)

Bond Funds

1. ATR-KIM Eng Fixed Income Fund
2. Ayala Life Fixed Income Fund
3. Cocolife Fixed Income Fund
4. Ekklesia Mutual Fund
5. First Metro SAve & Learn Fixed Income Fund
6. Grepalife Fixed Income Fund
7. Legacy GS Fund
8. Philam Bond Fund
9. Prudentialife Fixed Income Fund
10. Sun Life Prosperity Bond Fund
11. Sun Life Prosperity GS Fund
12. Philam Managed Income Fund

US Dollar Bond Funds

1. ALFM Dollar Bond Fund
2. MAA Privelege Dollar Fixed Income Fund
3. Philam Dollar Bond Fund
4. Sun Life Prosperity Dollar Abundance Fund
5. Philequity Dollar Income Fund
6. Grepalife Dollar Fixed Income Fund