MUTUAL FUNDS
AN INTRODUCTION TO
MUTUAL FUNDS
GUIDE BY RAMPVER FINANCIALS
WHAT IS A MUTUAL FUND?
An investment (company) that pools money together from different investors and invests them in various investment vehicles such as stock and bonds (depending on the investment objectives & policies of the company).
HOW DOES IT WORK?
Investors pool their money into one big fund, in exchange, the fund issues "shares" back to the investors, respective of the current price per share (Also called as NAVPS).
WHAT IS NAVPS?
It is the current price in which a single share of fund is valued. If you invested 1,000 pesos at 1 peso per share, you will get 1,000 shares in exchange.
The Mutual Fund Company then manages the pooled fund as a whole and invests it in stocks/bonds in behalf of the shareholders.
As the fund's investments grow, the profits is then reinvested in the fund, making the fund value bigger.
As the fund value grows bigger, so is the value of the investor's shares. Investor's money earns by the rising price of his/her shares over time.
BENEFITS OF MUTUAL FUND INVESTING
AFFORDABILITY
Mutual Funds have a low capital requirement. Initial investment starts at 1000 pesos and additional investment starts at 500 pesos.
DIVERSIFICATION
Diversification is the practice of investing broadly across a number of different investments to reduce risk and maximize earnings potential.
CONVENIENCE
All the investors have to do is to invest regularly, no need for the investors to time the market and watch prices every now and then.
PROFESSIONAL MANAGEMENT
Mutual Fund investors enjoy the benefit of the services of professional fund managers. These fund managers and experts monitor and actively manage the funds on a regular basis.
LIQUIDITY
Mutual Fund investors can redeem their investment within 5-7 banking days after a redemption notice is requested.
SAFETY
Mutual Funds are highly regulated by the SEC. To ensure that there is check and balance, regular audits are conducted by external auditors.
TAX EXEMPT
Gains realized upon redemption are tax-exempt, as stated by R.A. 8424 (also known as Tax Reform Act of 1997.)
TYPES OF MUTUAL FUNDS
STOCK FUND/EQUITY FUND
Aggressive type of mutual fund that is invested in stocks/equities of corporations. The main investment objective is capital grow appreciation. Recommended length of stay is longterm (5 years or more).
BOND FUND
Low-risk type of mutual fund that invests mostly fixed-income investments such as government securities and bonds. The main objective is capital preservation and growth. Recommended length of stay is shortterm (1 - 2 years).
MONEY MARKET FUND
This is a very conservative type of mutual funds invested in short term deposits, cash and cash equivalents. Recommended length of stay is less than 1 year.
BALANCED FUND
Moderate-risk type of mutual fund that invests in both stocks and bonds. Recommended length of stay is mediumterm (3 to 5 years).
HOW DO YOU EARN FROM MUTUAL FUND INVESTING?
You earn in mutual funds through capital appreciation.
* basic computation
Marky invests 10,000 in a mutual fund @ 1 peso per share (he gets 10,000 shares in return). After 5 years, the price is now 1.75 pesos/share (which puts the investment @ Php 17,000). That's 75% in 5 years.
PESO-COST AVERAGING
Peso Cost Averaging means that you buy mutual fund shares with a set amount of money each month or quarter over the long-term. This could be as low as P1,000 a month for five years. The amounts and time frames are up to your budget. This can also lessen the impact of the volatility (highs and lows) of the market over time.
WHAT ARE SOME
RECOMMENDED FUNDS
By distributing 40 mutual funds, I offer a wide selection of options for you to choose from.
While I want you to have the most diverse choices, I know that this may also be overwhelming. To help you, please see below for a summary of some recommended funds by Rampver Financials for you to consider based on certain categories:
Our recommendations are based on several factors such as fund performance, asset allocation, track record, and ease of application. With this, you can be assured that what you will be investing in is the right fund for your financial needs and capabilities.
We believe that having the right options for everyone is a requisite for choosing the best mutual fund for every financial goal.
Should you have any questions, please feel free to contact me!
AGGRESSIVE
As an aggressive investor, you are committed to investing for the long term, knowing that you may encounter market downturns along the way. You have set aside enough for your short-term needs, and you have enough money for investing.
Stock funds are basically designed for “growth”, to earn from capital gains and dividend yields. This is usually recommended for those investors who have long-term financial goals such as children’s education, retirement fund, funds for future business, and others.
SOLDIVO STRATEGIC GROWTH FUND
ATR Asset Management, Inc.
🛡️ For Aggressive-type investors.
🕒 Recommended time horizon is 5 years and up.
✔️ Minimum initial investment is PHP 1,000.00.
✔️ Minimum additional investment is PHP 500.00.
📝 Fund Description
Soldivo Funds are investments that fulfill life's dreams. This fund is invested in both blue-chip stocks for steady growth and small to mid-cap stocks for higher earnings potential.
📑 This fund is for you if:
You have a high appetite for risk and willing to invest for the long-term.
You want to invest your funds in both blue-chips stocks and second-liners (alpha stocks).
You have no immediate need for your investments and are willing to invest for the long term.
ATRAM ALPHA OPPORTUNITY FUND
ATR Asset Management, Inc.
🛡️ For Highly Aggressive-type investors.
🕒 Recommended time horizon is 5 years and up.
✔️ Minimum initial investment is PHP 1,000.00.
✔️ Minimum additional investment is PHP 1,000.00.
📝 Fund Description
The Fund's current strategy is to deliver superior returns over the long term by investing primarily in small to middle capitalized equity securities, with a focus on companies with strong growth potentials.
📑 This fund is for you if:
You want to pursue a growth strategy and you have a medium to long term investment horizon
You want to take a higher-than-normal risk when it comes to investing.
You have no immediate need for your investments and are willing to invest for the long term.
PHILEQUITY FUND
Philequity Management, Inc.
🛡️ For Aggressive-type investors.
🕒 Recommended time horizon is 5 years and up.
✔️ Minimum initial investment is PHP 1,000.00.
✔️ Minimum additional investment is PHP 500.00.
📝 Fund Description
PEFI gives investors access to a diversified stock portfolio managed by some of the best equity fund managers in the country.
📑 This fund is for you if:
You have a high appetite for risk and willing to invest for the long-term.
You understand the risks of investing equities but you also want higher returns.
You have no immediate need for your investments and are willing to invest for the long term.
MODERATE
You protect your money while giving it space to grow through medium to low-risk investment funds. You are an investor with a moderate to low appetite for risk and you are amenable to modest returns. You embrace the concept of “slowly but surely”. You have money lying around but might need it sometime soon, so your investing horizon is closer towards the short to medium-term.
Bond Funds | They can be good guards against inflation and can preserve (though not be guaranteed) your money value for the short-term. This is for the conservative investors who are risk-averse, who do not want to subject their money to market volatilities, thus opting for a safer investment instrument, yet protecting it against the effects of inflation. The recommended time horizon for this type of fund is one to three years.
Balanced Funds | This type of fund is a hybrid fund, a mix of a stock fund, bond fund, or money market fund in a single portfolio. Usually, there are set gauges on how much a balanced fund should be invested in stocks and bonds. The recommended time horizon for balanced funds is around 3 to 5 years.
SOLDIVO BOND FUND
ATR Asset Management, Inc.
🛡️ For Conservative-type investors.
🕒 Recommended time horizon is 1 - 3 years.
✔️ Minimum initial investment is PHP 1,000.00.
✔️ Minimum additional investment is PHP 500.00.
📝 Fund Description
Capital preservation with returns and inflows from high-grade fixed-income instruments
📑 This fund is for you if:
You are an investor with a low appetite for risk and you’re amenable to modest returns.
You have money lying around but might need it anytime soon, so your investing horizon is closer towards the medium-term.
You want to dip your toes into investing and try the least risky of all medium-term investments first.
FIRST METRO SAVE AND LEARN BALANCED FUND
First Metro Asset Management, Inc.
🛡️ For Moderate-type investors.
🕒 Recommended time horizon is 3 -5 years.
✔️ Minimum initial investment is PHP 5,000.00.
✔️ Minimum additional investment is PHP 1,000.00.
📝 Fund Description
It is ideal for investors who desire a good balance of safety and income. A balanced fund expects moderate growth by assuming moderate-to-high risks.
📑 This fund is for you if:
You are ready to invest and are currently looking at a long-term investing horizon
You are willing to take the risk but are not ready to have 100% exposure in the equity/stock market. The 'bond' portion of the Fund helps cushion the risks, should the stock market be fluctuating unfavorably.
You want to invest in both stocks and bonds with a limited budget.
ATRAM PHILIPPINE BALANCED FUND
ATR Asset Management, Inc.
🛡️ For Moderate-type investors.
🕒 Recommended time horizon is 3-5 years or more.
✔️ Minimum initial investment is PHP 1,000.00.
✔️ Minimum additional investment is PHP 1,000.00.
📝 Fund Description
The Fund is designed to seek total return through current income and long-term capital growth through investment in listed and non-listed fixed income and equity securities of Philippine companies and debt obligations of the Government of the Republic of the Philippines and its instrumentalities.
📑 This fund is for you if:
You are ready to invest and are currently looking at a long-term investing horizon.
You are willing to take the risk but are not ready to have 100% exposure in the equity/stock market.
You want to invest in both stocks and bonds with a limited budget.
DOLLAR FUNDS
Looking for an investment that will make your dollars work harder for you? Dollar funds give you access to global equities and bonds to help you grow and diversify your US dollar investments.
Unlike other similar funds in the market, dollar funds are able to navigate through various geographic markets and is not constrained by the performance of specific types of index. This way, you can seize the best opportunities across the globe.
SUN LIFE WORLD VOYAGER FUND, INC.
Sun Life Asset Management Company, Inc.
🛡️ For Aggressive-type investors.
🕒 Recommended time horizon is 5 years and up.
✔️ Minimum initial investment is USD 1,000.00.
✔️ Minimum additional investment is USD 200.00.
📝 Fund Description
The Sun Life Prosperity World Voyager Fund gives access to global equities to help you grow and diversify your US dollar investments.
📑 This fund is for you if:
You want to maximize the earning potential of your dollars.
You want to have better diversification for your equities portfolio.
You have a high risk profile and a long-term investment horizon.
SUN LIFE DOLLAR ADVANTAGE FUND
Sun Life Asset Management Company, Inc.
🛡️ For Moderate-type investors.
🕒 Recommended time horizon is 3 - 5 years.
✔️ Minimum initial investment is USD 1,000.00.
✔️ Minimum additional investment is USD 200.00.
📝 Fund Description
The Sun Life Prosperity Dollar Advantage Fund invests your cash in foreign exchange-denominated stocks or bonds, enabling your dollars to go farther and stretch its possibilities.
📑 This fund is for you if:
You have moderate appetite for risk and want returns in US Dollars, too.
You do not see any immediate use for your US dollars and want to maximize its return over the medium-term.
You want to diversify your money in low-risk, dollar-denominated investments.
PHILAM DOLLAR BOND FUND
BPI Asset Management, Inc.
🛡️ For Conservative-type investors.
🕒 Recommended time horizon is 1 - 3 years.
✔️ Minimum initial investment is USD 2,000.00.
✔️ Minimum additional investment is USD 100.00.
📝 Fund Description
The investment objective is to achieve capital preservation with returns and inflows derived from investments in fixed income and money market instruments.
📑 This fund is for you if:
You want minimal risk for your dollars and see only a medium-term investment period for your money.
You want to generate returns in US dollars and preserve what you currently have.
You want to diversify your money in low-risk, dollar-denominated investments.
STEPS TO
GET STARTED
STEP 1: CHECK RECOMMENDED FUNDS
See recommended mutual fund options above. Whether you’re an aggressive or moderate-risk investor, or want to diversify into dollar funds, there are many different choices for you. For a complete list of funds that are offered, click here.
Choose one or more funds based on your preference and needs.
STEP 2: CHECK GUIDELINES AND FILL UP FORMS
Once you’ve chosen your specific funds, you can find the guidelines and forms here.
STEP 3: SUBMIT FORMS FOR CHECKING
Once you have all requirements ready and forms are filled up, send them to info@vibrantinvestor.com for processing.
STEP 4: WAIT FOR CONFIRMATION + FUNDING
You will be contacted once forms are reviewed and approved.
Only then will you pay/transfer your investment amount directly to the asset management companies/fund houses (like ATRAM, Philam Life, etc.) and send proof of funding.
The fund house will also e-mail you directly to confirm subscription.
STEP 5: UPDATES
FREQUENTLY ASKED QUESTIONS
FAQS
How much will I earn if I invest in mutual funds? Are the returns guaranteed?
Mutual funds are NOT fixed-income investments and therefore do not pay guaranteed return.
Mutual funds are invested in stocks or corporations issued by the government where prices differ daily. As a result, the value of your investment also fluctuates depending on the performance of its underlying instruments.
While funds’ earnings are not fixed average of 6-18% a year, the potential for investor to earn is higher because Mutual Funds are well-diversified as it is invested in a basket of securities.
Historically, mutual funds outperformed traditional time deposit placements or short-term money-market funds.
How long is the maturity period?
Mutual funds do not have maturity periods. This means that the shareholders can actually sell their shares in any banking day.
Most mutual funds, however, charge exit fees if you withdraw within a certain holding period and it varies from fund to fund. Normally it is around 6 months from date of investment.
Can I tell the fund manager what specific stocks/bonds to buy or sell?
No. The fund manager will follow the investment parameters indicated in the fund’s prospectus.
What prevents the fund manager from running away with my money?
Mutual funds are structured in a manner that protects the shareholders’ interest. The fund manager does not have control over the assets of the fund except to make the buying and selling decisions.
The assets are held by a custodian bank, appointed by shareholders, who in return cannot transact these assets.
Can I lose money in mutual funds? Is my investment secured?
As with any investment instrument, investing in mutual funds involve a certain amount of risk. Stock and bond prices go up and down daily so does the value of your mutual fund investments.
Depending on market conditions, there may be periods when the value of your investment can be lower than the actual amount that you invested — “paper loss”. But unless the investor redeems these shares, these paper losses will not be realized.
Additionally, there are ways in which fund managers apply investment strategies in order to seize opportunities and avoid losses, and while there are risks in mutual fund investing, the returns can also be very rewarding most especially in the long-run.
Is my investment covered by the Philippine Depository Insurance Corporation (PDIC)?
No. A mutual fund is not a deposit product; therefore, it does not need to be covered by the PDIC. However, mutual fund shareholders are entitled to their proportional share in the total assets of the fund.
The PDIC on the other hand, can only insure up to P500,000.00 of your total deposits with a bank and not your entire investment amount. Moreover, mutual funds are liquid instruments as these are invested in marketable securities.
How do I invest in a mutual fund?
You can invest in a mutual fund by buying its shares from fund management companies or through licensed brokers.
The money you will invest will be converted into a number of shares. This is computed by dividing the amount invested by the current price or the Net Asset Value per Share or NAVPS.
What if something happens to me?
Your investment will form part of your estate and will be distributed to your heirs (usually surviving spouse and children) accordingly. However, it will be subject to estate tax which your immediate family would have to settle first before they will be allowed to claim the investment proceeds. To ease the transfer of the fund shares of a deceased investor, assigning a co-investor upon initial investment is suggested.
Are Mutual Fund gains taxable?
No. Mutual Fund gains are exempted from taxes based on Comprehensive Tax Reform Program. This was done in order to promote long-term investing in the country.
Will my investment lapse or expire if I cannot invest monthly?
No. Mutual Funds do not have lapsing periods or expiry dates. It does not have a strict investing schedule that you must follow. You can invest monthly, quarterly, annually — it all depends on the investor when he/she will invest.
Though not required, Rampver recommends that investors should top-up their investments regularly to capture different market prices, thus maximizing the earnings potential of their investment. This also forges the discipline of investing regularly.
NOTE: I (Peevee) and Rampver Financials are separate from the Mutual Fund Companies. You will be investing directly with the mutual fund company and not with us. Even your funding/money transfers will be done directly to their accounts.
We are simply the financial intermediaries between the fund management companies and the investors and we provide you easy access to them.
QUESTIONS
INTERESTED TO INVEST? OTHER CONCERNS?
Feel free to contact me below, or e-mail info@vibrantinvestor.com
Thank you so much!