Basic Types of Mutual Funds

Basic Types of Mutual Funds
Different Funds, Different Features

In the Philippines , there are currently four basic types of mutual funds---stock (also called equity), balanced, bond and money market funds.  Bond funds invest primarily in bonds such as treasury notes issued by the Philippine government and commercial papers issued by reputable companies in the Philippines .  Having a full basket of only fixed-income securities, bond funds provide capital preservation while maintaining a conservative stance in terms of asset allocation.   Like bond funds, money market funds also have a conservative stance since they have a full basket of fixed income funds.  The main difference lies in the term of investments of money market fund investments, which is one year or less.  Equity funds invest primarily in shares of stock issued by Philippine corporations.   The dominance of stock issues within the portfolio positions the fund to attain a more aggressive rate of growth.   Balanced funds invest in both shares of stocks and bonds, thereby accessing the growth potential of stocks tempered with the presence of secure fixed-income instruments.   Professional fund managers create value for shareholders by providing superior yields within controlled risk exposures.   Certainly, expective in both security selection and asset allocation go a long way in ensuring better long-term rewards for mutual fund investors.

At present, there are a total of 22 mutual funds in the country.  Six (6) of these are bond funds, five (5) are equity funds, while the remaining ten (10) are balanced funds while one is a money market fund.

Source: http://icap.com.ph/mf_101.html

Personally I have invested some of my money in Mutual Funds.  I invested to Balanced Fund. As a freshman to investing i choosed balanced fund for a safer investment. Soon I'll be investing in to Equity Fund or Stock Fund.  I've learn here that the best investment for young people is to go for high risk investments because in the long run it will have high rates of return. The higher the risk the higher the return of investment when it comes to long term investments.