Mutual funds gaining popularity in RP

Investors who have money to shell out for the long haul have other investment options besides the traditional bank savings or time deposits and the stockmarket. One investment alternative that is slowly, but surely gaining popularity in the country is mutual funds, which could earn higher yields at lesser risks.

Philequity Fund Inc., the Philippines’ number one mutual fund firm for the last 10 years, noted that investors have increasingly turned to mutual funds to save for retirement and other financial goals like starting a business, buying a car, building a house and saving for education.

A mutual fund is a company that pools money from many investors, then invested in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor’s proportionate ownership of the fund’s holdings and the income those holdings generate.

The assets are entrusted to a full-time professional fund manager who develops and maintains a diversified portfolio.

Philequity is frontlined by a powerhouse of top-notch brokers and other financial gurus, including SGV founder Washington Sycip, Roberto Lorayes, Wilson Sy, Margarito Teves, Vicente Jayme Sr., Greg Yu and Evelyn Singson.

Sy, a former chairman of the Philippine Stock Exchange, said Philequity Fund has been earning an average of 20 percent annually for the last 10 years or since 1994 – a huge return compared to the stockmarket which averages three to six percent per annum; the money market which earns about three to 10 percent; or bonds with interest rates ranging from as low as one percent to as high as 15 percent.

For a minimum investment of only P5,000, one’s investment is expected to double in a little over three and a half years, Philequity officials said.

Philequity president Ignacio Gimenez said Filipinos may not be too comfortable yet with mutual funds but around the world, especially in developed countries, millions of people know that these are ideal vehicles for raising money over time.

While there are a lot of investment instruments available, Gimenez said mutual funds pose an attractive shift from equities which are prone to volatile market conditions as influenced by currencies and economies across the region. Mutual funds offer the advantages of diversification and professional management.

Philequity is designed to accommodate both big and small investors seeking capital appreciation to avail of professional fund management at the lowest possible cost, liquidity, potential high growth opportunity and satisfactory return of their investments.

The mutual funds industry traces its roots 48 years ago when the first mutual fund in the country was established on Dec. 6, 1957. Mutual funds play a vital role in capital formation, savings promotion and wealth distribution.