5-Step Guide: How to invest in Mutual Fund companies in the Philippines
“How do I invest in mutual funds in the Philippines?”
This is a question we usually get from our readers. It’s actually easy, and we’ll give you a short and easy-to-follow 5-step investing guide below.
But before we begin, we encourage potential investors to first learn and understand what this investment opportunity is. We suggest you take time to read and browse through our comprehensive Guide to Investing in Philippine Mutual Funds here.
Now, assuming you have understood all risks and have decided to go ahead, here are the steps you’ll need to follow to begin investing in mutual funds in the Philippines.
Step 1: Choose a fund you want to invest in
We provide here a list of companies offering mutual funds and their historical returns and performance. Choose the fund/s you like.
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 with a mutual fund company.
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 during account opening or when you withdraw 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:
- the Personal Information Sheet or Application Form
- the Investor Profile Questionnaire or Investor Assessment Form; and
- the Order Ticket or Online Order Form
The forms may vary depending on the mutual fund company, but they are pretty much the same. 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.
Make sure you transact only with legitimate representatives of the company. Preferably make the payment 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 account to easily track the fund’s performance. Some funds merely provide NAVPS updates via email or postal mail, means you’ll have to make your own manual computations regarding your earnings. (Here’s a sample of How to compute your income in Mutual Funds.)
Want to learn more details about Mutual Funds? Here’s our complete guide: Investing in Mutual Funds: A Guide for Filipinos