Mutual Funds | Different Types Of Mutual Funds

The mutual fund is supervised by a fund manager that purchases and sells the fund's investments in conformance with the fund's investment goal. In the Philippines, you can purchase mutual funds in a mutual fund corporation. which is regulated by Securities and Exchange Commission (SEC). Mutual fund has many kinds relying on position the fund will be invested. The list underneath summarizes various types of mutual funds in the Philippines you can purchase.

1. Stock/Equity Fund

Stock or equity mutual fund is the best typical kind of mutual fund which is a fund invested purely on equities or stocks. The fund manager chooses stocks that he determined to be profitable to invest in. This type of mutual fund is the riskiest among mutual fund since the achievement of this fund rests on the stock market but will give you the highest return. When you purchase equity mutual fund, it is just like investing in stock market secondhand.

2. Balanced Fund

Balanced mutual fund is a kind of mutual fund invested in stocks and bonds which has less risk in comparison to equity fund. Balanced fund will give you an average earnings of investment.

3. Fixed-Income Fund

Fixed income mutual fund is spent in any instruments that yield fixed normal revenue. This kind of fund has the least risk of losing your money because this is not dependent on the stock market but will give you lesser return than equity or balanced-fund.

4. Money Market Fund

Money market fund is a type of mutual fund invested in short interval debt securities. Money market fund confines loss of investment that may be cause by market, credit and liquidity.

Depending on your investment principles, you can purchase various types of mutual funds. Usually, in the Philippines when you inquire for a mutual fund account in a mutual fund firm, they will issue you a set of questionnaires so that they can learn which mutual fund is preferred for you.

In my study, I bought Equity and Balanced mutual fund in First Metro Asset Management, Inc. (FAMI), a famous mutual company in the Philippines. If you like your money to be at the safest mutual fund, you must choose the fixed income fund, though, it will impart you really minimal return.