Investing

Best Mutual Funds in the Philippines for 2018 – Year-End Update

December 28, 2017

Last Update December 27, 2017

Best Mutual Fund in the Philippines

Have you considered investing in any of the best mutual funds in the Philippines this 2018? If yes, then this post may help you decide the best mutual fund in the Philippines to invest with.

 

Finding out the best mutual fund in the Philippines is hard. To start with, the top performing mutual fund change every year, you will see this later in this post how the ranking changed from May 2017 to December 2017.

 

You also need to understand that, just like any other investment, the risks are inevitable when it comes to investing in mutual fund.

 

Although mutual fund is a safer choice than investing in stocks on your own, there are still some cons you should be aware of.

 

First, you have zero control over your portfolio.

 

Investing in Mutual Fund would mean no control over the stocks included in your portfolio. You are basically investing in a pool of stocks, pre-selected through careful research by your Fund Manager.

 

For this reason you need to choose the best mutual fund in the Philippines in terms of over-all performance. You have to study how the fund manager chooses which stocks to include in your portfolio. And how these stock inclusions affects the your monthly or yearly returns.




Second, fees and expenses.

 

In order to maintain your mutual fund account, there are certain fees and expenses being deducted to your additional investment. If you look at it in a macro basis, these fees are small compared to your entire investments. But, if you add all deductions and subtract it to your current returns you’ll notice how troubling the ratio can be.

 

I’ve been deducted of around Php 20 to Php 30 every time I make additional investments by my mutual fund provider. That Php Php 960 to Php 1440 in total could have been an additional 240 shares for me if I divide it to the latest First Metro Save and Learn Equity Fund Net Asset Value Per Share of Php 5.9.

 

All the best mutual fund in the Philippines have these different fees you could be paying without really even knowing it. Others don’t bother to check these details, and lose out significantly because of it. For this reason ask your relationship manager or fund adviser on what fees could be involved in your investments.

 

Lastly, lower risk may mean lower gains

 

Diversification is the primary advantage of investing in mutual fund. Your Php 5000 investment could buy you shares from different stocks. In direct stock investing, your Php 5000 investment could only buy you 100 shares of Puregold.

 




 

But, returns of your investment in mutual fund is slower compared to stocks.

 

I’ve been investing in an equity mutual fund for four years now, and my return of investment is still below 10% at the moment.

 

Now that I also have a direct stock investment, I realized how harder it can be to feel the returns when it comes to mutual fund.  But, since I am reserving my mutual fund for retirement I don’t really care that much. All I know is the earnings I get is way better than parking my money on a usual savings account.

 

In a nutshell, investing in the best mutual funds in the Philippines will not guarantee you great returns in a short span of time. Invest now, invest regularly and invest long-term – these three phrases are the secret words in retiring rich when it comes to mutual fund.

 

But the question is – Which is the Best Mutual Fund in the Philippines to Invest in 2018? This post will give you the year-end rank of the country’s top mutual funds based on return of investment. I hope you will enjoy today’s post!

 

Related:

UITF vs. Mutual Fund (Beginners ALERT!)

7 Advantages of Mutual Fund

Understanding Managed Funds as an Investment Vehicle in the Philippines

Personal Equity and Retirement Fund (P.E.R.A.) in the Philippines




What is mutual fund?

 

Mutual fund is a kind of investment in the Philippines wherein your investments are pooled together with the others, professionally managed and invested in specific types of securities.

 

Visualize it this way:

 

You invest in a specific type of mutual fund. Your money as well as the other investors are pooled together by the mutual fund company.

Your mutual fund company will act as the fund manager who the money in stocks, mutual funds and other equities.

 

To put simply, investing in mutual fund is like indirect investment in the stock market. It works like a normal savings account where you can top up your investment for as low as 1k but the ROI is way higher since it is invested in stocks. 

 

Read next – My First Six Months in the Philippine Stock Market

 




 

Why you Should Invest in Mutual Fund?

1. Low Initial Investment

Starting a mutual fund account will only cost 5,000pesos which is a very fair amount whether you are working in a minimum wage or above minimum. All you have to do is start saving that said initial investment and for additional investment you can just give as low as 1,000 pesos a month!!!

 

2. Diversification

When you open your mutual fund account, all the money you invest will be diversified to different corporations intelligently picked by experts. You can read more about diversification in The 10 Most Important Lessons to Learn in Personal Finance

 

3. Convenience and Cost Efficiency

In mutual fund you are  free of stress in buying or selling or any other key terms and what about in the stock market. The fund manager/company where you opened your account will do everything for you. All you have to do is give additional investment every month. This will save you time, effort and additional money for transportation too.

 




4. Principle of Compounding

If you are starting your researches about financial management then you have already heard of the term compounding. Compounding is the best friend of your investment. The more time your money is in the stock market the higher it will gain interest. Even if you stop investing after five years as long as your money is the mutual fund account it will still gain interest and will still make you a millionaire. This principle is present in every mutual fund accounts.

 

5. No more Tax

 

Now this is the true reason why mutual fund is advantageous. There is no tax applicable for this one. All your investment will be with you without any tax deduction. What you see in your paper asset will be the same when you put it to cash.

 

6. Regulated by SEC

It is actually a good thing to have a back up in every investment that you make. Fortunately, investing in mutual fund is regulated by Security and Exchange Commission so you will have no worries that your investment will be put to waste. Just be sure to invest in true and regulated mutual fund firms.

 

7. Liquid Statement

Liquidity is easier in mutual fund because the company will really let you see what is happening to your investment. The breakdown of everything is present that gives you an edge over other investments. There is also easy access to information in mutual fund because they are just a call or an email away and they send information to your email address real time.

 

Read next –  13 Things I Do To Improve My Finances




What are the Different Types of Mutual Funds?

 

The best mutual funds in the Philippines are categorized into four types:

 

1. Equity Funds

2. Bond Funds

3. Money Market Funds

4. Balanced Funds

 

Just like the latest reader question I answered, the type of mutual fund mentioned above are further characterized based on Composition (where it invests), Horizon (how long you should invest to see the ROI), Objective (why are you investing) and Risk Type (what type of investor are you).

 

The table below will help you decide which type of Best Mutual Funds in the Philippines is right for you.

best-mutual-fund-Philippines




Is Mutual Fund for You?

 

To simply know whether a mutual fund is the right investment vehicle for you. Ponder upon the following:

 

It is for you if you have no trust issues

If you have issues entrusting your hard earned money to others then a mutual fund might not satisfy your investment cravings. Mutual Fund works like a savings account that you need to fund. Then a professional fund manager will put your money in the market and make it earn for you.




 

It is for you if you are for long-term investment

Mutual Fund doesn’t make you an instant millionaire. You need to wait for your money to accumulate wealth in a slow but steady manner. For example, a capital of 25,000pesos invested in a Money Market Fund can be 2-3 million in 20-25 years from now. (This depends on what type of mutual fund you invested). If you are willing to wait then mutual fund is for you.

It is for you if you are a beginner

Mutual Funds are one of the easiest way to own shares/stock. You won’t be bombarded with hard financial terms. You don’t need to worry deciding what stocks to buy or to sell because a trusted fund manager will do it for you.

 

SIDE STORY. I invested in an equity mutual fund at 19 and started investing in direct stock market at 22 (this year) So far both investment vehicles are performing good. You can read my November 2017 Recap and Extra Income Report while Working Full-Time for the updates

 

Now that I’ve covered all the basics about investing in mutual fund this the list of the best mutual funds in the Philippines 2017 will be update from time to time to give you a definitive comparison.

 

Please take note that the Net Asset Value Per Share (NAVPS) used in the following table is as of December 27, 2017.

 

Best Mutual Fund in the Philippines 2018 – Equity Funds

Name of Mutual Fund
Year-To-Date ROI 1-Year ROI
3-Year ROI
5-Year ROI10-Year ROI
ALFM Growth Fund21.19%24.22%4.01%5.64%Not Available
ATRAM Alpha Opportunity Fund21.29%22.79%4.13%6.00%Not Available
ATRAM Philippine Equity Opportunity Fund18.29%21.67%1.62%5.38%7.57%
First Metro Save and Learn Equity Fund9.73%24.52%2.68%4.45%11.40%
One Wealthy Nation Fund
10.96%13.49%-1.25%Not AvailableNot Available
PAMI Equity Index Fund23.02%26.18% Not Available
Not AvailableNot Available
Philam Strategic Growth Fund18.87%21.68%2.87%3.03%5.26%
Philequity Dividend Yield Fund19.81%22.13%3.74%Not AvailableNot Available
Philequity Fund22.33%24.79%3.45%7.37%11.78%
Philequity PSE Index Fund24.08%27.67%5.76%8.20%10.48%
Philippine Stock Index Fund23.76%27.12%5.62%7.96%9.03%
Soldivo Strategic Growth Fund 18.19%20.84%0.99%Not AvailableNot Available
Sun Life Prosperity Philippine Equity Fund21.37%24.28%4.13%5.09%8.00%
Sun Life Prosperity Philippine Stock Index Fund24.08%27.17%Not AvailableNot AvailableNot Available
United Fund23.78%26.94%5.94%3.25%5.86%

Best Mutual Fund in the Philippines 2018 – Balanced Funds

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI10-Year ROI
ATRAM Dynamic Allocation Fund11.12%12.75%-1.15%2.96%6.06%
ATRAM Philippine Balanced Fund10.19%12.01%1.59%4.70%6.43%
Bahay Pari Solidaritas Fund12.12%13.40%3.45%4.41%Not Available
First Metro Save and Learn Balanced Fund13.81%16.01%-0.21%0.80%11.74%
Grepalife Balanced FundNot AvailableNot AvailableNot AvailableNot AvailableNot Available
NCM Mutual Fund of the Philippines11.46%12.04%2.34%1.87%Not Available
PAMI Horizon Fund 10.60%12.35%1.58%1.25%6.24%
Philam Fund
10.57%12.10%1.51%1.43%6.52%
Sun Life Prosperity Balanced Fund13.88%16.09%2.25%3.24%6.04%
Sun Life Prosperity Dynamic Fund12.91%15.11%0.91%Not AvailableNot Available

Best Mutual Fund in the Philippines 2018 – Bond Funds

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI10-Year ROI
ALFM Peso Bond Fund2.13%2.32%1.83%2.36%4.23%
ATRAM Corporate Bond Fund-0.15%0.30%-0.81%1.84%2.50%
Cocolife Fixed Income Fund5.02%5.32%5.26%5.27%7.14%
Ekklesia Mutual Fund1.04%1.73%1.37%2.60%4.26%

First Metro Save and Learn Fixed Income Fund
0.37%0.46%0.50%3.66%5.98%
Grepalife Fixed Income Fund 2.20%3.41%-0.16%0.35%2.87%
Philam Bond Fund-0.17%0.25%0.29%1.71%4.06%
Philequity Peso Bond Fund0.79%1.49%-0.19%3.00%4.87%
Soldivo Bond Fund-0.15%-0.13%Not AvailableNot AvailableNot Available
Sun Life Prosperity Bond Fund3.36%4.31%1.01%1.78%3.80%
Sun Life Prosperity GS Fund2.81%3.92%0.52%0.88%3.12%

Best Mutual Fund in the Philippines 2018 – Money Market Funds

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI
ALFM Money Market Fund1.68%1.69%1.35%
1.4%
Philam Managed Fund0.85%0.83%0.1%0.21%
Sun Life Prosperity Money Market Fund2.23%2.24%1.77%0.97%

  1. Based on www.pifa.com.ph
  2. ROI means Return of Investment
  3. Not Available means the mutual fund hasn’t reached yet a YTD, 1-Year, 3-Year, 5-Year or 10-Year mark for an ROI to be computed.

 

Here are some observations worth mentioning:

1. The best mutual fund in the Philippines can change in a matter of month/s.

 

It will be hard to predict the ranking of mutual fund companies because the stock market itself is a big bubble. The top spot is harder to maintain because different fund managers use different strategies when it comes to investing.

 

Choosing your mutual fund provider based on past performance can be tricky for there’s no assurance that the fund will perform the same in the next couple of months or year to come.

 

This happen exactly with First Metro Save and Learn Equity Fund (SALEF). Back in 2013, the performance of SALEF is beyond compare to its competitors. Return of investment even is at a stable rate of 25% to 29%.

Source: https://www.pinoymoneytalk.com/mutual-fund-performance-may-2013/

 

Another blogger made a good post on how a real investment in the Save and Learn Equity Fund (SALEF) of First Metro Asset Management, Inc. in 2008 you can actually double your money by 2012.

Source: http://pisomatters.blogspot.com/2013/01/double-your-money-in-mutual-fund.html

 

Come 2014 to 2016 the returns went stagnant even to the point of loss for some (including me!). I was honestly on the verge of withdrawing my money. But, I hold on to my investments for the hoping for some miracle. Lo and behold, SALEF is now performing back at its pace like before.

 

As you can see from 14th rank in May 2017, it jumped to 7th rank in December 2017.

 

This goes to show how tricky past performance can be. It is okay to choose your mutual fund provider based on past performance, BUT remember that there is no guarantee that your provider will perform the same or greater forever.

 

2. The returns can be your deciding factor too.

 

If you look at the ranking the Year-To-Date Returns as well as 1-Year Returns of every mutual fund in the Philippines are tightly close to each other.

 

However, 5-Year and 10-Year Return has big difference. If you want to invest your money and see returns in a short period of time, you can choose the best mutual fund based on Year-To-Date or 1-Year Returns.

 

But, if you are in for long-term investing, choose the best mutual fund in terms of 10-Year returns.

 

How you can adapt this when it comes to choosing where to invest in 2018?

 

If you have a goal to park your money in a vehicle that could give 20% returns in less than a year, go for United Fund, Inc., Philequity PSE Index Fund Inc., Sun Life Prosperity Philippine Stock Index Fund, Inc., Philippine Stock Index Fund Corp. and/or PAMI Equity Index Fund, Inc.

 

But, if you are opening a mutual fund account as part of your long-term plan or retirement, I suggest to go with First Metro Save and Learn Equity Fund, Inc. or Philequity Fund, Inc.

3. Mutual Fund is just another investment vehicle available.

 

You should realize that a mutual fund is just another vehicle for investment like stock market, Unit Investment Trust Fund (UITF), Personal Equity Retirement Account (PERA), time deposit and even bitcoin.

 

Each investment vehicle have its own advantage and disadvantages. I’ve mentioned some of the disadvantage in the beginning of this post while a separate advantages of mutual fund in a separate link.

 

It is important for you to know this so you can ponder upon which investment vehicle is right for you. Please research too about other investment vehicles that may answer your financial goals.

 

The key here is to not put all your eggs in one basket. If you have the means to diversify in other investment vehicle, please do so. Before 2017 ended, I was able to invest directly in the Philippine stock market AND in online farming.  

 

4. The best strategy (still) is to invest long term

 

Because of how volatile or unstable the stock market can be, the best strategy still is to hold your shares for a long period of time.

 

Looking back, have I not invested my extra cash in a mutual fund, I would have wasted all the money buying makeup and skincare. Yes, those can bring me a moment of happiness but, seeing my money grow in a mutual fund has a different effect.

 

If you have any money left from your 13th month pay or other bonus this 2017, try investing in a mutual fund of your choice. Put that money at work for a long period of time and then reap off the rewards after.




How To Start Investing in Mutual Funds

Investing in mutual fund is easy. Depending on the financial company you will entrust your investments with, you will may need to do/to present the following:

 

 
1. Visit the website of your chosen mutual fund asset management company.

 

 
2. On their website you can easily find the page for Mutual Fund and/or Investment Products. 

 

 
3. Read the differences of each mutual fund offerings. Select your fund based on your personal investment objectives, investment horizon and your risk profile. READ: Reader Question | Where Should I Invest My Money?

 

 
4. Download the needed forms. This will depend on your chosen mutual fund asset management company.

 

  • Prospectus which is required and filed with the Securities and Exchange Commission. This document provides details about an investment offering as well as facts that an investor need to make an investment decision.
  • Account Opening Form which is required to be filled up for your information and other personal reference.
  • Investment Risk Profiling Questionnaire which will know your investment risk profiles and match you with the right companies to invest with. 
 

 

5. Prepare your IDs. 
 

 

6. Have you initial investment ready. Initial investment for a Mutual Fund account ranges from 5,000pesos to 10,000pesos. 
 

 

7. Submit all your requirements. You may need to go to the nearest office or send through mail. Sun Life for example  introduces an online facility that allows you to add, transfer and redeem shares anytime, anywhere. On FAMI I opened my account by submitting all the forms and requirements via courier.

 

 
8. Wait for your proof of purchase and/or statement of account to arrive. 

 

 
9. Fund you account. 

 

Final Words from SavingsPinay

This post will be updated from time to time to give you the latest return of investment status of the best mutual funds in the Philippines. Mutual Fund is a good investment vehicle for those who are just starting out in the stock market. It is a good option for your retirement fund so better invest as early as tomorrow or better yet, now. Mutual Funds are by far the most popular investment vehicles for newbies. It is affordable, it is convenient and it is regulated. But investing in mutual funds have bad and ugly sides too. It is important to note that every investment has loopholes just as how every investment contains risks. 

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Clariza Glino

Izza of SavingsPinay promotes financial literacy for the young and young at heart by providing insights and tips on budgeting, saving, investing and online entrepreneurship. Aside from this blog she also writes at www.izzaglinofull.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at izza@savingspinay.ph