Choosing the Right Mutual Fund in the Philippines

As we know there are various types of mutual funds out there that you can put in your money to invest, but not so fast though.

Don’t jump on the first one that you see, or the first salesman that will talk to you.

If you plan not to lose your money with mutual funds, you have to make your due diligence before deciding which mutual fund is the best for you.

But because there are few out there that you have to choose and quite a number of companies offering them, the next thing to hurdle is which one would give the the right gain you are looking for your investment.

In this article, I will try to compare the mutual fund performances of companies offering this type of investment.

I will not give my best bet on which of these will give you the best returns, because this simple comparisons is not an in depth study of their performances.

This is just to give you some guide, and choosing which is right for you should be your own pick.

In this simple comparison of mutual funds we will look into the performances of mutual fund companies for the last 4 years.  Data that were used in this comparison were gathered from reliable source online, so we can say that data presented here are true but unofficial.

Equity Fund

Equity Fund Performance in the Philippines (2007-2010)

As we can see equity funds were generally on their negative range during the year 2008 recalling that this is also the year of financial meltdown of the US market.  As you go along, you will notice that every other mutual fund suffered that same faith with equity fund.

Balanced Fund

Balanced fund performance in the Philippines (2007-2010)

In this graph you will notice that some of the funds in particular years did not show any result (e.g: ALFM Growth Fund lacks data on their returns during the year 2007).

 Bond Fund

Bond Fund Performance in the Philippines (2007-2010)

As you can notice there are quite  handful of companies that are offering Bond Fund, it reflects how much people are willing to put in their money in this type of investment, not because it gives them the highest returns but because it is the fund that is relatively safe but will give them average return.

But as you will notice also, this type of mutual fund was not a recession proof during the year 2008 financial woes in the United States.

 Money Market Fund

Money Market Fund Performance in the Philippines (2007-2010)

And lastly, this is the graph representing the Money Market Fund.  There are only 2 companies offering such fund according to my research for a four year comparison performances because some are relatively new and others does not have readily available data.

This fund is touted to be the safest among mutual fund offerings, but as you can see, along with other mutual funds, it recorded a negative returns for the year 2008.  The only difference is that its losses did not reach reach up double digit percentage.

However on its percentage gains, it only recorded a maximum growth of 3%, which if you can recall my article regarding inflation, this would be a bad investment to consider since inflation on an average here in the Philippines is at 4% at least annually.

Over-all Comparison

Mutual Funds over-all comparison in the Philippines (2007-2010)

With this general comparison of mutual funds in the Philippines, we can say that the best performer of them all is the Equity Fund.  It yielded the highest returns of up to 40+ percent in the year 2009.

But we can see that Equity Fund has also that biggest percentage lose in the year 2008, one of the reason I can see is that this type of mutual fund is heavily invested in stocks which became volatile during the year 2008.

And the poorest performer of them all is the Money Market Fund.  I don’t have the data that can pinpoint what could be the reason for this, but I can only assume that this fund only manifests to the investment rule of thumb that “less risk will give you less returns, while big risk can also give you big returns”.

There you go, this is the simple study I made for myself and I am sharing it to you.  I don’t want to endorse any company offering mutual funds because I wan’t you to take a closer look with these graphs I have presented.

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Note:  Data that were used in this simple comparison is unofficial, thus readers are advice to verify or check for themselves if they think the figures are not right or erroneous.

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