How to Invest in Philippine Mutual Funds Online

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How to Invest in Philippine Mutual Funds Online

Investing in Philippine mutual funds has never been this easy with the advent of online platforms which allows you to invest in mutual funds directly right on your computer screen.

Unlike before where you’d normally go through an individual agent to buy mutual funds, two of the most popular online stock brokerage companies in the Philippines are now offering mutual fund too together with their primary stock brokerage business.

These two are COL Financial and First Metro Securities.

Why invest in Philippine Mutual Funds

A mutual fund is an investment company registered with the Securities and Exchange Commission (SEC), which pools money from many investors creating a big fund under a common objective. This fund is then invested in specific type of securities to achieve its stated objective. Economy of size makes this pooled fund as a whole “more powerful” than the initially isolated individual funds in achieving a common goal understanding the risks involved.

Investing in a Mutual Fund is an easy alternative way to invest in the Philippine stock market which requires little time and monitoring on your part.

Little time because you basically “give your money” as your investment and let the fund manager do the job of selecting where to invest it and subsequent monitoring. You can start with as low as 5k.

Another advantage of mutual fund over direct stock investing is the diversification it offers. If you’re buying stocks on your own, your 5k initial capital can only buy at most two stocks. But when you buy a mutual fund, you’re actually effectively buying a basket of stocks and other securities like government/corporate bonds. Diversification is one way investment strategy in managing the risk for an investment.

The only downside of mutual fund over stocks are the additional fees involved in mutual fund investing, such as management and front-end fees. Look at these costs as your “payment” for joining in the mutual fund and riding on the expertise of its fund managers.  The good thing about online mutual fund sellers is they are waiving (as of now) the normally charged front-end fees which means savings for you.

There’s also typically a minimum holding period for your investment, some with as short as 90-days. You can always cash out your investment earlier than this but you’ll be charged early redemption fee.

Other details about the mutual fund, such as its performance and portfolio mix can be easily found as part of the resources page of your online broker, like shown below.

How much you can earn

In terms of potential returns, mutual fund is ideal to be part of your long-term portfolio, typically with at least five years time horizon.

You can see below the historical performance of equity type mutual funds in different holding periods, 1 YR, 3 YR and 5 YR. It’s important to note though that just like in stocks investing, the returns of mutual funds are never guaranteed.

Mutual Fund Performance Table

How to buy Philippine mutual funds online

As I mentioned, you can buy mutual funds via online brokers COL Financial and First Metro Securities.

COL Fund Source

COL Financial offers mutual fund through its COL Fund Source.
You can choose from 20+ of mutual funds offered by the top 6 mutual fund companies in the Philippines  with ZERO front-end fees.

With COL Fund Source, you can:

  • Access 26 Mutual Funds offered by the country’s top 6 Mutual Fund Houses
  • Invest in Mutual Funds with only PHP 5,000 to start
  • Invest in Mutual Funds without paying for the Front-End Fees
  • Automate your Mutual Fund purchases for regular investing, and
  • Monitor your investments anytime and anywhere

If you already have a COL Financial account, you can readily buy your first mutual fund. To explore and start using COL Fund Source, log in your COL Financial Account and click on the Mutual Funds tab.

COL Fund Source

First Metro Sec

Another online broker offering mutual fund is First Metro Securities under the Metrobank Group. It’s practically the same as COL Fund Source, offering mutual funds from top six mutual fund houses and also has no front-end sales charges.

Mutual fund with First Metro Securities

If you already have an account in First Metro Sec, then you can also consider buying mutual funds online as part of your diversification.

As a final note, while mutual fund is an excellent choice for passive investors who simply want to have greater returns than what banks can offer, it’s important to remember the importance of goal setting and risk assessment in every investment you’ll take. Online brokers offering mutual funds normally have its risk assessment questionnaire that will help you decide which type of mutual fund is best for you.

Additionally, before you invest, ask yourself what purpose in the future your money is going to be for.  This way, it will be easier for you to manage your investment (and your emotions) knowing its original intended purpose. Many newbies fall to the trap of losing this mindset when they start seeing losses even if it’s not yet done within their investing time frame. As with stocks, you’d need to allow your mutual investments to grow over time to achieve optimal returns for your goals.

Hope this helped you in your search of where to invest your money.
If you’ve got more questions, you can send them to me through my contact page.

Have fun investing,

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2 thoughts on “How to Invest in Philippine Mutual Funds Online

  1. Jennifer Musallam

    Hi sir. I am a muslim and already started my stocks with Shari’ah approved ones (Halal companies). May i ask if there is specific mutual fund company that caters with halal stocks?

  2. Pingback: Four Simple Tips for Newbies in Philippine Stock Market – Smart Pinoy Investor – Investing and Personal Finance for Pinoys

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