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.

What is a Mutual Fund?

What is a Mutual Fund?

I have here two sources of the meaning of a Mutual Fund.  May this could help you understand better about Mutual Funds.  May this be a guide for your future investment to Mutual Funds.

A Mutual Fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base.   The assets are then entrusted to a full time professional fund manager who develops and maintains a diversified portfolio of security investments.  People who buy shares of a mutual fund are its owners or shareholders.  Their purchases provide the money for a mutual fund to buy securities such as stocks and bonds.  A mutual can make money from its securities investments in two ways: a security can pay dividends and interest to the fund, or a security  can rise in value.  The fund passes any dividends, interest or profits on the sale of its portfolio securities, less fund expenses, to shareholders in the form of distributions.

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

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.[1]  The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.

Source: http://en.wikipedia.org/wiki/Mutual_fund