May 6, 2011

What is a Mutual Fund

A mutual fund is an efficiently managed type of communal investment driven by several investment companies that is intended to pool money from several different investors to buy bonds, stocks, money market instruments, and other securities.  They deligate these investment assets to their professional fund managers who work out on an expanded investment portfolio.
Mutual fund investors can earn money from their investments in two different ways;  Either a security pays dividends and interest to the fund, or a security rises in value.

There are 4 Basic types of Mutual Funds available in the Philippines, these are: Stock or Equity, Bond, Balanced, and Money Market funds.

Stock or Equity funds invest in shares of stock issued by several different firms and corporations in the Philippines.

Bond funds invest in bonds such as treasury notes issued by the government and commercial papers issued by highly regarded corporations and firms in the Philippines .

Balanced funds invest in both stocks and bonds, thereby accessing the growth aptitude of stocks moderated with the existence of safe fixed-income instruments.

Money market funds are relatively similar to bond funds, they share a similar conservative stance in investing full fixed income funds.  The major difference is the term of investment, money market fund investments take shorter time than bond fund investments.

Learn more about mutual funds:



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