Top 10 Best Mutual Funds in the Philippines

How do I invest in Mutual Funds in the Philippines? And which mutual funds are the best ones to invest in?

Well, the word “best” may be relative and it’s honestly difficult to pinpoint the “best mutual fund” based on one criteria alone. But one of our main goals in PinoyMoneyTalk is to provide objective, practical, and useful information about investment opportunities, so what we’ll do is hopefully give you enough information to help you arrive at your own decision — rather force you our definition — as regards the best mutual funds that are worthy of your investment.

So in this article, we’ll explain to you:

what Mutual Funds are and why they may be a good investment for you;
things to consider before putting your money in a Mutual Fund;
a step-by-step guide on how to invest in Mutual Funds;
how to compute your earnings in Mutual Funds; and
performance ranking of Mutual Funds in the Philippines based on returns.

With this guide, we hope that you’ll be able to make an informed decision as to where to put your hard-earned money!

(If you want to skip to the list of the best performing mutual funds for the entire year 2019, head over to “Section 9. Best Mutual Funds in the Philippines” to view which funds had the best returns last year.)

How to invest in Philippine Mutual Funds

Content Guide

My Mutual Fund Investing Story

First, let me relay to you an interesting story I have regarding my experience making my very first mutual fund investment back in the early 2000s.

I started investing in mutual funds when I was 22 years old. I may be relatively young back then, but I was an Overseas Filipino Worker (OFW) and was able to save some money because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA promoting a big mutual fund company in the Philippines. (I won’t name which one, but let’s just say there’s the word “LIFE” in its name. Sunlife, Manulife, or Pru Life? Take a guess, LOL!).

Anyway, I got interested with the promise that it is an “investment” that can help me “retire rich”. Back then, and even until now, I love the idea of retiring early and retiring financially free. I do not plan on working for the rest of my life, so having an opportunity to help me grow my money while I was young made me decide to drop by the mutual fund company’s office on that same day.

I went to the reception and was told by the secretary to sit and wait for a mutual fund agent who will accommodate me. After a few minutes, a guy walked in, scouted the entire room then told the secretary (I was the only one there besides the secretary): “Nasaan yung kliyente? Wala namang investor dito…”

I stifled a laugh, unsure if I should be offended or amused but I got up, approached the guy, and introduced myself as a 22-year-old potential mutual fund investor. He blushingly apologized and we started talking about what mutual funds are how they can be a good investment opportunity to help me reach my financial goals.

What are Mutual Funds?

So what are Mutual Funds?

By definition, a Mutual Fund is an “investment fund that collectively pools money from individual and corporate investors, with the pooled money being managed by a professional fund manager who invests in stocks, bonds, money market instruments, or other securities with the goal of providing an acceptable level of return to contributing investors.”

Don’t be intimidated by that definition. Simply put, it is a pool of money collected from various investors with the collected money managed by a group of investment managers who trade and invest in assets with the hopes of making money for all investors.

In the Philippines, Mutual Funds are created as independent companies, which makes mutual fund investors the “owners” or “shareholders” of the fund. That’s one primary difference between a similar investment product called Unit Investment Trust Funds (UITF).

Mutual Funds vs. UITF: What’s the difference?

What are UITF?

How to Invest in UITF in the Philippines

Just like mutual funds, Unit Investment Trust Funds or UITF are also collective investment schemes where pooled funds are managed by an investment team that invests in a variety of investment securities.

UITF are typically offered by banks or trust corporations in the Philippines and are offered to investors as “investment products.” That’s one primary difference between these two investment outlets. Investors of UITF do not become owners or shareholders, unlike in mutual funds. We explain this and other points of differences below.

Offerer or Fund Manager. Mutual Funds are offered by investment companies independently registered with the Securities and Exchange Commission (SEC). Therefore, when you buy a share of mutual fund, you become a stockholder of the mutual fund and you acquire the rights of a regular stockholder, including right to vote and right to receive dividends, if distributed by the mutual fund. UITF, on the other hand, is a trust product of banks or trust corporations. When you buy UITF, you merely buy “units” of investment, not shares of a company. Therefore, you do not acquire shareholder rights in the bank. You do not get the right to vote, unlike in a mutual fund where you’re a shareholder.

Fund Manager. In mutual funds, money is entrusted to a group of full-time professional fund managers appointed by the investment company. In UITFs, money is typically managed by the Trust Group or Trust Department of the bank (or the Investment Management group in a Trust corporation). The competencies and certifications of Mutual Fund and UITF fund managers are usually the same, but in terms of professional affiliation, mutual fund managers are typically members of the Philippine Investment Funds Association (PIFA) while UITF investment managers are typically part of the Trust Officers Association of the Philippines (TOAP). It’s possible that fund managers are members of both, especially if their institution offers both mutual funds and UITF.

Price. The price of a MF share or a UITF unit is measured by its current net asset value. The Net Asset Value (NAV) is simply the difference between the values of the total assets of the fund less its total liabilities. This total NAV is divided by the number of MF shares or UITF units outstanding. In the case of mutual funds, the resulting number is is called NAVPS or Net Asset Value per Share, while in the case of UITFs, this is called NAVPU or Net Asset Value per Unit. Sample computations of NAVPU and NAVPS are explained in later section of this article.

Fees. Investments in mutual funds are charged sales loads, which may be in the form of entry or exit fees. Entry fees are upfront sales load or outright expenses charged even before a mutual fund account is opened. Exit fees, or redemption fees, are charged when shares are redeemed and converted to cash. UITFs do not have entry or exit fees, but are charged an annual management or trust fee which is a certain percentage of the invested amount, and may be deducted from the fund’s assets every month or every quarter.

Applicable Law. A specific law in the Philippines called the “Investment Company Act of the Philippines” (Republic Act No. 2629) governs mutual fund companies. UITF, on the other hand, are not governed by any specific law but since they are product offerings of banks or trust corporations, they are governed by rules and regulations of the Bangko Sentral ng Pilipinas (BSP). A UITF, although a bank product, is not a deposit product which means it is not covered by the Philippine Deposit Insurance Corporation (PDIC). Mutual Funds, because they are also not a deposit product, are similarly not covered by the PDIC.

Regulatory Body. Mutual funds are registered companies, therefore, they are regulated by the Securities and Exchange Commission (SEC) of the Philippines. UITFs, as mentioned earlier, are regulated by the Bangko Sentral ng Pilipinas (BSP).

Sales Agents. To be able to sell shares of mutual funds, the agent must be a Certified Investment Solicitor, a license awarded by the SEC to people who passed a licensure exam allowing them to sell mutual funds. UITFs, on the other hand, are offered by people who may or may not have the SEC license. These are usually marketed and offered to customers by staff in bank branches (in the case of banks) or marketing & sales employees (in the case of Trust corporations).

So which one is better: Mutual Fund or UITF? That depends on a lot of factors. Continue reading to find out key considerations that you should think through before you put your money in these investment funds.

3 Things to Consider Before Investing in Mutual Funds

Without a doubt, returns or profits earned by the fund is one of the most important criteria when considering which mutual fund to invest in. But trust us when we say that this should not be your one and only criteria. Other factors should be considered because these, too, can affect the long-term performance of your investment.

Here are three (3) things about mutual funds that you should assess before choosing which ones should have your money.

1. Long-Term Return or Performance

The fund performance, summarized by the rate of return or profit generated, is no doubt a very important consideration. But don’t get easily blinded by a fund’s outstanding performance in the short run. Take note: historical performance is not a guarantee of future returns.

You should focus instead on consistent and long-term performance, that is, preferably 3-year or 5-year returns of the fund, even longer. This is also the reason why we include the 1-year, 3-year, and 5-year returns of mutual funds in our fund rankings below (see Fund Rankings table at the latter part of this article).

You shouldn’t opt for returns that are “flash in the pan” — meaning, a winning streak for a period of time that cannot be replicated or repeated. We can’t tell you which specific rate of return would make a fund the best of the best, but choose one that consistently outperforms its benchmark return or its peers in its category.

Here’s our tip! In the case of equity mutual funds, opt for funds that consistently beat the performance of the Philippine Stock Exchange index (PSEi). For money market mutual funds, choose funds that beat the interest rates offered by Time Deposits in the Philippines with one-year maturity.

2. Investment Style: Active vs. Passive Investing

The performance of the mutual fund is affected by the investment philosophy adopted by the fund. The fund’s style could either be active or passive. Assess your investment objective and determine if an actively or passively managed fund suits you better.

Actively managed funds are mutual funds managed by investment managers who make trading decisions with the goal of outperforming or beating a benchmark index to achieve “alpha” returns.

Passively managed funds, meanwhile, are mutual funds managed by investment managers with the simple goal of tracking and duplicating the performance of an index. Examples of passively managed funds are “index funds” or “Exchange Traded Funds” — both of which are explained in detail in the succeeding section.

Here’s a table summarizing key differences between these two investment styles in fund management.

	Actively Managed Funds	Passively Managed Funds
Goal	Outperform the index and achieve "alpha" returns	Mimic the index and achieve similar returns
Strategy	"Beat the market"	"Set and forget"
Choice of Securities	May invest in securities outside the benchmark index that could produce higher returns	Limited to investing in securities that are included in the benchmark index
Fees	Typically charge higher fees as payment for expertise of the fund manager	Typically charge lower fees since fund manager merely adopts index-linked strategy

Which one is better? Well, this depends on your assessment of your investment goal and risk appetite.

If you’re able to take more risks and you’re willing to trust the fund’s investment manager to make decisions that could potentially generate you higher profits (but take note, this could also lead to a possibility of loss), opt for actively managed funds.

If, on the other hand, you prefer to achieve returns that are very similar to the index without significant deviations from the benchmark performance, then passively managed funds are the ones for you.

3. Investment Type

In the Philippines, there are generally four (4) types of asset classes in mutual funds (excluding “Feeder Funds”, and the decision which one to choose should depend on your investment horizon and risk appetite. We explain in detail each mutual fund type below. We also provide our suggested matching of investment fund based on your investment goal and personality to help you make an informed decision.

Types of Mutual Funds in the Philippines

I. Equity or Stock Funds

Equity or Stock funds primarily invest in the shares of publicly-listed corporations. The fund’s objective is typically capital appreciation or long-term growth through capital gains. Dividends earned from the shares are also an important source of income for the fund.

Equity funds carry relatively more risk compared to other assets but historically provide higher returns as well. Most peso-denominated equity funds invest in common stocks or preferred shares of companies whose shares are listed in the Philippine Stock Exchange. Some dollar-denominated funds, meanwhile, invest in stocks traded in foreign stock exchanges.

As mentioned earlier, equity funds can be actively managed or passively managed.

List of Equity Funds in the Philippines in 2020

Actively managed equity funds in the Philippines are as follows.

Equity Fund MF	Currency	Fund Manager
ALFM Growth Fund	PHP	BPI Investment Management Inc.
ATRAM Alpha Opportunity Fund	PHP	ATR Asset Management Inc.
ATRAM Asiaplus Equity Fund,Inc.	USD	ATR Asset Management Inc.
ATRAM Philippine Equity Opportunity Fund	PHP	ATR Asset Management Inc.
Climbs Share Capital Equity Investment Fund	PHP	CLIMBS Investment Management and Advisory Corp.
First Metro Consumer Fund on MSCI Philippines	PHP	First Metro Asset Management Inc.
First Metro Save And Learn Equity Fund	PHP	First Metro Asset Management Inc.
MBG Equity Investment Fund	PHP	MBG Equity Investment Fund, Inc.
Philam Strategic Growth Fund	PHP	Philam Asset Management, Inc
Philequity Alpha One Fund	PHP	Philequity Management, Inc.
Philequity Dividend Yield Fund	PHP	Philequity Management, Inc.
Philequity Fund	PHP	Philequity Management, Inc.
Philequity MSCI Philippine Index Fund	PHP	Philequity Management, Inc.
Soldivo Strategic Growth Fund	PHP	Rampver Financials
Sun Life Prosperity Philippine Equity Fund	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity World Voyager Fund	USD	Sun Life Asset Management Company, Inc.
United Fund	PHP	Cocolife Asset Management Company, Inc.

Meanwhile, passively managed funds in the Philippines come in the form of Index Funds or Exchange Traded Funds.

List of Index Funds in the Philippines in 2020

What are Index Funds? They are named such because they track and attempt to mimic the performance of a benchmark index. Most index funds in the Philippines track the Philippine Stock Exchange index (PSEi), so expect index funds to have returns that are close to the PSEi’s return.

Examples of PSE index funds in the Philippines are as follows.

PSEi Index Fund MF	Fund Manager
First Metro Save and Learn Philippine Index Fund	First Metro Asset Management Inc.
PAMI Equity Index Fund	Philam Asset Management, Inc
Philequity PSE Index Fund	Philequity Management, Inc.
Philippine Stock Index Fund	BPI Investment Management Inc.
Sun Life Prosperity Philippine Stock Index Fund	Sun Life Asset Management Company, Inc.

List of Exchange Traded Fund in the Philippines in 2020

An Exchange Traded Fund or ETF also tracks a benchmark index but, unlike Mutual Funds in the Philippines, ETF is traded and can be bought or sold any given day at the Philippine Stock Exchange. At present, there is only one ETF available in the Philippines.

ETF	Currency	Fund Manager
First Metro Philippine Equity Exchange Traded Fund	PHP	First Metro Asset Management Inc.

II. Bond Funds

Bond funds invest primarily in fixed-income securities issued by the government or large domestic corporations. Examples of fixed-income securities include government bonds (such as Treasury bills and RTB or Retail Treasury Bonds), corporate bonds, or LTNCD (Long Term Negotiable Certificate of Deposit). Because bulk of the fund’s investments are in securities with a fixed rate of return, bond funds are generally considered to be less risky versus equity funds.

List of Bond Funds in the Philippines in 2020

Bond Fund MF	Currency	Fund Manager
ALFM Dollar Bond Fund	USD	BPI Investment Management Inc.
ALFM Euro Bond Fund	EUR	BPI Investment Management Inc.
ALFM Peso Bond Fund	PHP	BPI Investment Management Inc.
ATRAM Corporate Bond Fund	PHP	ATR Asset Management Inc.
ATRAM Total Return Bond Fund	USD	ATR Asset Management Inc.
Cocolife Fixed Income Fund	PHP	Cocolife Asset Management Company, Inc.
Ekklesia Mutual Fund Inc.	PHP	BPI Investment Management Inc.
First Metro Save & Learn Dollar Bond Fund	USD	First Metro Asset Management Inc.
First Metro Save And Fixed Income Fund	PHP	First Metro Asset Management Inc.
Grepalife Dollar Bond Fund	USD	Grepalife Asset Management Corp.
Grepalife Fixed Income Fund	PHP	Grepalife Asset Management Corp.
PAMI Global Bond Fund	USD	Philam Asset Management, Inc
Philam Bond Fund	PHP	Philam Asset Management, Inc
Philam Dollar Bond Fund	USD	Philam Asset Management, Inc
Philequity Dollar Income Fund	USD	Philequity Management, Inc.
Philequity Peso Bond Fund	PHP	Philequity Management, Inc.
Soldivo Bond Fund	PHP	Rampver Financials
Sun Life of Canada Prosperity Bond Fund	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Abundance Fund	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity GS Fund	PHP	Sun Life Asset Management Company, Inc.

III. Balanced Funds

Balanced funds are a type of pooled funds invested in a mixture of equities and fixed-income securities, such as Bonds. The goal is to provide total return consisting of a high level of income consistent with preservation of capital and liquidity.

Balanced funds are ideal for investors who want the benefits of both stocks (capital appreciation) and fixed-income securities (preservation of capital).

List of Balanced Funds in the Philippines in 2020

Balanced Fund MF	Currency	Fund Manager
ATRAM Dynamic Allocation Fund	PHP	ATR Asset Management Inc.
ATRAM Philippine Balanced Fund	PHP	ATR Asset Management Inc.
Cocolife Dollar Fund Builder	USD	Cocolife Asset Management Company, Inc.
First Metro Save And Learn Balanced Fund	PHP	First Metro Asset Management Inc.
First Metro Save and Learn F.O.C.C.U.S. Dynamic Fund	PHP	First Metro Asset Management Inc.
Grepalife Balanced Fund	PHP	Grepalife Asset Management Corp.
NCM Mutual Fund	PHP	Banco de Oro Trust Group
PAMI Asia Balanced Fund	USD	Philam Asset Management, Inc
PAMI Horizon Fund	PHP	Philam Asset Management, Inc
Philam Fund	PHP	Philam Asset Management, Inc
Solidaritas Fund	PHP	BPI Investment Management Inc.
Sun Life of Canada Prosperity Balanced Fund	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Achiever Fund 2028	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Achiever Fund 2038	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Achiever Fund 2048	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Advantage Fund	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Wellspring Fund	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dynamic Fund	PHP	Sun Life Asset Management Company, Inc.

IV. Money Market Funds

Finally, money market funds provide current income to investors by placing the pooled funds in short-term securities with maturities of one year or less. Among the four types of investment funds, money market funds provide the least amount of risk.

Examples of investment assets that usually comprise the portfolio of a money market fund are short-term government securities, special deposit arrangements, short-term notes, and time deposits.

List of Money Market Funds in the Philippines in 2020

Money Market Fund MF	Currency	Fund Manager
ALFM Money Market Fund	PHP	BPI Investment Management Inc.
First Metro Save and Learn Money Market Fund	PHP	First Metro Asset Management Inc.
Philam Managed Income Fund	PHP	Philam Asset Management, Inc
Sun Life Prosperity Dollar Starter Fund	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Money Market Fund	PHP	Sun Life Asset Management Company, Inc.

V. Feeder Fund

At present, there is a special fund offered in the Philippines, the ALFM Global Multi-Asset Income Fund, which invests the pooled money in a “Target Fund” instead of using the pooled money to be invested directly in investment securities. As such, they are called “Feeder Funds” because they are “feeded into” a target fund.

List of Feeder Fund in the Philippines in 2020

Feeder Fund MF	Currency	Fund Manager
ALFM Global Multi-Asset Income Fund	USD	BPI Investment Management Inc.

How to Choose the Best Mutual Fund

The decision about the type of fund to invest in should depend on your investment objective, risk profile, and investment horizon.

For instance, if you’re looking for high returns (specifically, capital appreciation), you might want to invest in equity funds or balanced funds, provided that you are also willing to absorb potential losses (i.e., high tolerance for risk) and have no need for the invested capital in the short run (i.e., long-term investment horizon).

Equity or balanced funds are usually not advisable for an investor with a low tolerance for risk and with a short-term investment horizon. As risky investments, equity or balanced funds could fluctuate in prices and produce losses in the short run. The investor might decide to withdraw but, in the process, he or she could realize a loss on the investment. For these types of investors, a more conservative bond fund or money market fund might be more appropriate.

The following table summarizes the type of fund applicable to investors depending on their investment profile.

Mutual Fund options based on Investor Profile

Type of Fund	Income Objective	Risk Tolerance	Investment Period
Equity Fund	Capital Appreciation	High Risk	Long-term (At least 5 years)
Balanced Fund	Total Return	Medium Risk	Mid- to Long-term (3 to 5 years)
Bond Fund	Current Income	Medium Risk	Short- to Mid-term (1 to 3 years)
Money Market Fund	Capital Preservation	Low Risk	Short-term (1 year or less)

For example, an investor with an income objective of capital appreciation (capital growth) and with high risk tolerance (able to absorb potential losses) and with long-term investment horizon (at least 5 years) will benefit greatly by investing in an equity mutual fund.

Meanwhile, an investor whose income goal is merely to preserve capital and with relatively low risk tolerance (i.e., not willing to accept possibility of monetary loss) with a short-term investment horizon (a few months to one year) would find money market fund a more appropriate investment option.

How to Invest in Mutual Funds: Step-by-Step Guide

Just like my experience when I first invested in mutual funds back when I was 25 years old, opening a mutual fund account is actually easy. Just follow this simple 5-step guide which we compiled for you below.

Step 1: Choose a fund you want to invest in.

We provide below an alphabetical list of all currently available mutual funds in the country. Choose the fund/s that you like and which match your investment goal and risk appetite, as explained in the earlier section on “3 things to consider before investing in Mutual Funds.”

Complete List of Philippine Mutual Funds in 2020

Mutual Fund	Type	Currency	Fund Manager
ALFM Dollar Bond Fund	Bond	USD	BPI Investment Management Inc.
ALFM Euro Bond Fund	Bond	EUR	BPI Investment Management Inc.
ALFM Global Multi-Asset Income Fund	Feeder Fund	USD	BPI Investment Management Inc.
ALFM Growth Fund	Equity	PHP	BPI Investment Management Inc.
ALFM Money Market Fund	Money Market	PHP	BPI Investment Management Inc.
ALFM Peso Bond Fund	Bond	PHP	BPI Investment Management Inc.
ATRAM Alpha Opportunity Fund	Equity	PHP	ATR Asset Management Inc.
ATRAM Asiaplus Equity Fund,Inc.	Equity	USD	ATR Asset Management Inc.
ATRAM Corporate Bond Fund	Bond	PHP	ATR Asset Management Inc.
ATRAM Dynamic Allocation Fund	Balanced	PHP	ATR Asset Management Inc.
ATRAM Philippine Balanced Fund	Balanced	PHP	ATR Asset Management Inc.
ATRAM Philippine Equity Opportunity Fund	Equity	PHP	ATR Asset Management Inc.
ATRAM Total Return Bond Fund	Bond	USD	ATR Asset Management Inc.
Climbs Share Capital Equity Investment Fund	Equity	PHP	CLIMBS Investment Management and Advisory Corp.
Cocolife Dollar Fund Builder	Balanced	USD	Cocolife Asset Management Company, Inc.
Cocolife Fixed Income Fund	Bond	PHP	Cocolife Asset Management Company, Inc.
Ekklesia Mutual Fund Inc.	Bond	PHP	BPI Investment Management Inc.
First Metro Consumer Fund on MSCI Philippines	Equity	PHP	First Metro Asset Management Inc.
First Metro Philippine Equity Exchange Traded Fund	ETF	PHP	First Metro Asset Management Inc.
First Metro Save & Learn Dollar Bond Fund	Bond	USD	First Metro Asset Management Inc.
First Metro Save And Fixed Income Fund	Bond	PHP	First Metro Asset Management Inc.
First Metro Save And Learn Balanced Fund	Balanced	PHP	First Metro Asset Management Inc.
First Metro Save And Learn Equity Fund	Equity	PHP	First Metro Asset Management Inc.
First Metro Save and Learn F.O.C.C.U.S. Dynamic Fund	Balanced	PHP	First Metro Asset Management Inc.
First Metro Save and Learn Money Market Fund	Money Market	PHP	First Metro Asset Management Inc.
First Metro Save and Learn Philippine Index Fund	Equity (Index Fund)	PHP	First Metro Asset Management Inc.
Grepalife Balanced Fund	Balanced	PHP	Grepalife Asset Management Corp.
Grepalife Dollar Bond Fund	Bond	USD	Grepalife Asset Management Corp.
Grepalife Fixed Income Fund	Bond	PHP	Grepalife Asset Management Corp.
MBG Equity Investment Fund	Equity	PHP	MBG Equity Investment Fund, Inc.
NCM Mutual Fund	Balanced	PHP	Banco de Oro Trust Group
PAMI Asia Balanced Fund	Balanced	USD	Philam Asset Management, Inc
PAMI Equity Index Fund	Equity (Index Fund)	PHP	Philam Asset Management, Inc
PAMI Global Bond Fund	Bond	USD	Philam Asset Management, Inc
PAMI Horizon Fund	Balanced	PHP	Philam Asset Management, Inc
Philam Bond Fund	Bond	PHP	Philam Asset Management, Inc
Philam Dollar Bond Fund	Bond	USD	Philam Asset Management, Inc
Philam Fund	Balanced	PHP	Philam Asset Management, Inc
Philam Managed Income Fund	Money Market	PHP	Philam Asset Management, Inc
Philam Strategic Growth Fund	Equity	PHP	Philam Asset Management, Inc
Philequity Alpha One Fund	Equity	PHP	Philequity Management, Inc.
Philequity Dividend Yield Fund	Equity	PHP	Philequity Management, Inc.
Philequity Dollar Income Fund	Bond	USD	Philequity Management, Inc.
Philequity Fund	Equity	PHP	Philequity Management, Inc.
Philequity MSCI Philippine Index Fund	Equity	PHP	Philequity Management, Inc.
Philequity Peso Bond Fund	Bond	PHP	Philequity Management, Inc.
Philequity PSE Index Fund	Equity (Index Fund)	PHP	Philequity Management, Inc.
Philippine Stock Index Fund	Equity (Index Fund)	PHP	BPI Investment Management Inc.
Soldivo Bond Fund	Bond	PHP	Rampver Financials
Soldivo Strategic Growth Fund	Equity	PHP	Rampver Financials
Solidaritas Fund	Balanced	PHP	BPI Investment Management Inc.
Sun Life of Canada Prosperity Balanced Fund	Balanced	PHP	Sun Life Asset Management Company, Inc.
Sun Life of Canada Prosperity Bond Fund	Bond	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Achiever Fund 2028	Balanced	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Achiever Fund 2038	Balanced	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Achiever Fund 2048	Balanced	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Abundance Fund	Bond	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Advantage Fund	Balanced	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Starter Fund	Money Market	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dollar Wellspring Fund	Balanced	USD	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Dynamic Fund	Balanced	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity GS Fund	Bond	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Money Market Fund	Money Market	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Philippine Equity Fund	Equity	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity Philippine Stock Index Fund	Equity (Index Fund)	PHP	Sun Life Asset Management Company, Inc.
Sun Life Prosperity World Voyager Fund	Equity	USD	Sun Life Asset Management Company, Inc.
United Fund	Equity	PHP	Cocolife Asset Management Company, Inc.

Step 2: Find an authorized agent selling the fund.

You probably know this already, but you’ll need to get a mutual fund agent to assist you in opening an account. The agent is a requirement; you won’t be allowed to open an account unless you have an agent.

Fact: the sales load charged to your account, either the front-end sales load during account opening or the back-end or load upon withdrawing your investment, is actually a commission paid to your agent.

If you personally do not know any agent, you may visit the mutual fund company’s office or contact the company. An agent will be assigned to you.

At present, there are two companies that allow investors to directly invest in Mutual Funds online, without the need for an investor to look for an agent. These two companies are COL Financial, which operates COL Fund Source, and First Metro Securities, which operates Fundsmart.

The two platforms are basically the same. Investors may open an account and, through the investor’s online account with these companies, can choose to invest in a variety of mutual funds offered in the Philippines. In this case, COL Financial and First Metro Securities themselves are the authorized mutual fund agents.

Step 3: Fill out the application documents.

Prospective mutual fund investors will normally be asked to complete three forms prior to investing:

Personal Information Sheet or Application Form
Investor Profile Questionnaire or Investor Assessment Form; and
Order Ticket or Online Order Form

The forms may vary depending on the mutual fund company, but they are pretty much the same thing.

The Personal Information Sheet or Application Form requires you to complete your personal details. The Investor Profile or Investor Assessment Form, meanwhile, evaluates and identifies your risk tolerance and investment goal. Finally, the Order Ticket or Online Order Form contains your specific instruction on the type and number of mutual fund shares you want to purchase.

Step 4: Make the payment in authorized payment centers.

Make sure you transact with authorized representative of mutual fund companies! There have been instances in the past wherein a supposed agent did not remit the investment to the mutual fund company. Unfortunately, I had this exact experience with another mutual fund agent who was a relative of mine.

I opened a mutual fund account with my uncle as agent. During the initial years, I never had problems topping up my investment simply by giving him the money. He told me that it’s actually his responsibility to help me process my additional investments since he’s my agent. I agreed to the setup because it was also convenient for me since I never had to personally visit the mutual fund office. And then one day, when I checked my account, it was missing a few thousand pesos that I gave to my uncle as additional investment. He confessed that he took the money and never invested it in my account. Good thing that he repaid me after a few months, but I decided to find a new agent after that.

The lesson, therefore, is to make sure you transact only with legitimate representatives of the company or better if you make the payment yourself in the mutual fund company’s office or branch. You may also deposit your investment in local banks that already have partnerships with the mutual fund. Upon payment, make sure you get a copy of the payment receipt and the processed Order Ticket.

Step 5: Monitor your investment.

Ask your agent how you can regularly check the status of your investment. Some funds give you online access where you can track your portfolio, so open an online account to easily track your investment’s performance. Some funds merely provide NAVPS updates via email or postal mail, which means you’ll have to make your own manual computations regarding your earnings.

How to Earn Money in Mutual Funds

Investors make money when the mutual fund increases in value. This happens because a mutual fund can earn in two ways:

From the capital gain, or increase in value, of the securities held and owned by the fund; and
Through dividend or interest income received from the assets held by the fund.

Proceeds from these earnings, merely reduced by the fund’s operating charges and other expenses, are passed along as income to investors of the mutual fund. The value of each share of the mutual fund is called Net Asset Value per Share (NAVPS).

NAV is calculated daily based on the fund’s total asset value divided by the total number of outstanding shares of the fund. If the NAV is increasing, then that means mutual fund investors are making money from the fund. If the NAV is decreasing, then this means the fund is losing value and the investors are losing money.

Let’s see below how the NAVPS is actually computed.

How NAVPS is computed in Mutual Funds

If you’re still at a loss regarding how earnings in Mutual Funds are computed, don’t fret. It’s actually easy if you just follow our step-by-step guide so that you yourself can personally compute the gains (or losses) of your mutual fund investment.

Step 1: Determine the number of shares you own

You know this now: when you invest in mutual funds, you’re actually buying “shares” of the mutual fund company. Each share is priced using the NAVPS or the Net Asset Value per Share, a figure that changes every day since it represents the “market value” of all investments owned by the mutual fund company.

Let’s assume you wish to invest P100,000 in a Mutual Fund. You checked and saw that the mutual fund’s NAVPS price is currently P1.75.

Given this NAVPS value, if you invest P100,000 you will receive 57,142 shares of this mutual fund, computed as follows:

P100,000 divided by P1.75 = 57,142 shares

The total value, therefore, of your mutual fund investment that day is P99,998.50, computed as follows:

57,142 shares x P1.75 NAVPS = P99,998.50

Does this mean the entire P100,000 is not fully invested? You’re correct, and you actually will get a change of P1.50 from the company. (Some companies, though, will just give you a fraction of the shares valued at P1.50 so that they will no longer have to give you back the P1.50 change. We will not consider that, however, in this example.)

For simplicity purposes, we will also not consider any fees or sales loads charged by the fund. Do note, though, that most funds will charge a fee either upon investment (entry fee or front-end sales load) or when redeeming your mutual fund shares (exit fee or back-end sales load).

Step 2: Determine the current NAVPS

At any day, you can compute the value of your mutual fund investment. The only two things you need to know are:

Number of shares you own; and
NAVPS price on that day

Let’s assume that at the end of one year, the NAVPS of your mutual fund increased to P2.50.

To calculate the profit, here’s what you simply have to do:

Get the difference between the current NAVPS and the NAVPS when you originally bought the shares. Then multiply this figure with the total number of shares you own to get the amount of your profit.

Mathematically:

Current NAVPS = P2.50
Original NAVPS when you bought the shares = P1.75
Difference in NAVPS prices = P2.50 – P1.75 = P0.75
Number of Shares you Own = 57,142 (from Step 1 above)
Profit = Difference in NAVPS price x Number of Shares you Own
So your Total Profit = P0.75 x 57,142 = P42,856.50

This means your P100,000 investment has already produced you a profit of P42,856.50. Not bad!

Alternatively, you can just compare the current total fund value and the initial fund value. The “current total fund value” is the product of (i.e., multiply) the number of shares you own and the current NAVPS price. The “initial fund value,” meanwhile, is the product of (i.e., multiply) the number of shares you own and the original NAVPS price.

Mathematically:

Current fund value = 57,142 shares x P2.50 NAVPS = P142,855.00
Beginning fund value = 57,142 shares x P1.75 NAVPS = P99,998.50
Difference in fund values = Total Profit =P142,855.00 – P99,998.50 = P42,856.50

As you can see, this computation results in the same amount of profit we computed using the other formula above.

One important point to remember, though. This profit is still “paper profit” or “unrealized income.”

That’s because you have not redeemed the shares yet. Any day afterwards, the NAVPS could still change which means your fund value (and profit) will also change. And when that happens, whatever “paper profit” you have computed become irrelevant.

We’ll show this in the next example.

Step 3: Calculate actual profit at time of redemption

Let’s assume it’s now the 2nd year and you wanted to encash and redeem your shares.

Before we proceed, we’ll highlight again that the fund value and your profits at the end of Year 1 are now irrelevant. Yup, they are NOT important anymore at this point. Whatever “profit” you have previously gained was not “realized” since you did not redeem the shares.

Let’s assume that at the end of Year 2, the NAVPS price is P2.00. As in Step 2, we can compute the profit by comparing the current and original NAVPS:

Current NAVPS = P2.00
Original NAVPS = P1.75
Difference in NAVPS prices = P2.00 – P1.75 = P0.25
Number of Shares Owned = 57,142
Profit = P0.25 x 57,142 = P14,285.50

At the end of Year 2, your mutual fund investment has earned profits of P14,285.50.

If you redeemed all 57,142 shares, you will get P14,285.50 cash as profit.

The total money you would get from the mutual fund is this profit plus the original investment (P14,285.50 + P99,998.50), which totals P114,284.00.

The total cash proceeds, which you’ll receive upon redemption, can also be computed this way:

Current NAVPS = P2.00
Number of Shares Owned = 57,142
Total Fund Value = P2.00 x 57,142 = P114,284.00

Again, be reminded that this computation does not consider any fees charged by the fund. Your fund value may be reduced by any exit fees or back-end sales loads charged by the mutual fund.

Best Mutual Funds in the Philippines

We invest with the primary goal of making money, which is why the performance of a mutual fund, summarized by its rate of return, is an appealing metric to most investors. If your ultimate investment goal is to quickly grow money, choose funds that can provide you the highest possible returns.

We looked at the overall performance of all mutual funds in the Philippines during the entire year 2019 and ranked below the top 10 mutual funds with the highest returns from January to December 2019.

Ranking of Best Mutual Funds in the Philippines

*PinoyMoneyTalk’s Guide on How to Invest in Franchises, UITF, Mutual Funds, and ETF:

Top 10 Overall Best Mutual Funds in 2019

Rank	Mutual Fund / ETF	Type	Jan-Dec 2019 Return
1	Philam Bond Fund	Bond Fund	11.54%
2	Sun Life of Canada Prosperity Bond Fund	Bond Fund	11.18%
3	Sun Life Prosperity GS Fund	Bond Fund	10.47%
4	Soldivo Bond Fund	Bond Fund	8.16%
5	PAMI Horizon Fund	Balanced Fund	7.62%
6	Philequity Peso Bond Fund	Bond Fund	7.38%
7	First Metro Save and Learn Fixed Income Fund	Bond Fund	6.97%
8	Philam Fund	Balanced Fund	6.88%
9	NCM Mutual Fund of the Phils.	Balanced Fund	6.51%
10	Philam Managed Income Fund	Money Market Fund	6.29%

You might argue that some mutual funds are not comparable with each other since each fund has varying investment mandate. A money market fund that invests in securities that mature in one year or less, for example, does not compare well to an equity fund investing in shares of stocks of a publicly listed company. But if your primary goal is to quickly grow your money, you might want to place investment in a fund that can provide the highest return, regardless of asset class.

Interestingly enough, in 2019, equity funds seem to have taken a backseat in terms of returns. Bond funds and balanced funds are the top performers, generating as much as double-digit returns while stock funds merely settled in the single-digit, just like the PSEi’s full-year 2019 return of 4.68%.

In addition, even money market funds — which are typically mandated to invest in securities with maturities of 1 year or less — managed to outperform stock funds. This only goes to show that investing in equity funds don’t give an assurance of relatively higher returns year after year after year.

If you’re already set to invest in a particular type of mutual fund, say, bond fund or balanced fund, but are still unsure which specific fund to invest in, then you’ll surely find useful our full ranking below of mutual funds by asset class.

Here’s a listing of all funds, categorized by asset class, showing individual fund performance (measured by gain or loss), from the beginning of January 2019 until the end of December 2019.