by: Art Ladaga
Would you like to see your money grow significantly even while you sleep? Why not go into mutual funds!
Mutual funds are private institutions that pool funds from different investors and place it in various investments like stocks, bonds, and others. A professional fund manager supervises and handles the fund for the investors. Thus, you do not have to worry about how the fund is doing. Mutual funds are also affordable. For just P5000, you can already start investing. And finally, it is diversified. Your money is not only placed in one particular investment. Rather, it is spread out to take advantage of greater returns and mitigate any risks!
For the year 2013, mutual funds performed fairly. A lot of events, both local and international, affected the performances of various mutual funds. Equity funds (invested in stocks) gave an average year to date return of -1.7% while bond funds (invested in bonds) gave 7.4%. Balanced funds (invests in both stocks and bonds) averaged around -1.7% and money market funds (invested in short term fixed-income instruments) averaged 0.72%.
Despite the setbacks, mutual funds performed exceptionally well in the long run. Equity funds gave average annual returns of 9% per annum for the past three years and 23% per annum for the past five years. Bond funds, on the other hand, gave an average annual return of 8% per annum for both three and five year periods. Balanced funds gave a three-year average annual return of 8% per annum and 19% per annum for the past five years. Lastly, money market funds gave average annual returns of 1.41% per annum and 1.1% per annum for the past three and five years respectively. While the returns in mutual funds are NOT GUARANTEED, they are one of the best investments for long-term growth.
The share prices of mutual funds (called Net Asset Value per Share or NAVPS) were very low at the end of 2013. For the wise and long term investor, this posed new opportunities to invest more money to acquire more shares. The good news is that a new mutual fund called the One Wealthy Nation (OWN) Mutual Fund is soon to be launched! It’s a balanced mutual fund concentrating on dividend-earning equity shares and high fixed-income instruments that will help ordinary Filipinos grow their hard-earned wealth in the long run. It is managed by First Metro Asset and Management Inc., one of the leading mutual fund companies in the country.
The OWN Mutual Fund is an offshoot of the desire of Colayco Foundation to round up its goal of teaching all income-earning Filipinos save and grow their savings. It starts with the One Wealthy Nation (OWN) Community also to be formally launched on January 23.
To know more about the OWN Community and OWN Mutual Fund, visit us at www.colaycofoundation.com and www.onewealthynation.com.
Join us in the ONE WEALTHY NATION COMMUNITY and learn all the options open to you including the OWN Mutual Fund!
*Art Ladaga is the current Programs Development Officer of Colayco Foundation for Education