Investing in Mutual Funds

I don't remember when and why I started to become curious about mutual funds, but what I do remember was that I saw it as a middle ground between the snooze worthy interests of a time deposit or a savings account, and the roller coaster ride that is trading in stocks.

I knew that the interest offered by my savings account was a joke, but I didn't know how to start investing in stocks and the idea of disturbing a broker to place my pitiful investment left me anxious (Broker: Whut?! You want me to invest this?! I don't get out of bed for less than Php100k sister!).

So enter mutual funds.

I did a little research and Sun Life appealed to me because (1) I was already aware of its life insurance products; (2) I wanted to work for Sun Life before because it had an Alabang office,* and the idea of taking a trike to work made me happy; and (3) I knew Teeyah worked there.

The fact that I only needed to shell out Php5,000 for my initial placement was also mighty attractive to me. Thus I opened a bond fund, shifted to balanced fund after a few months and then promptly forgot about it for the next year or so. Fail.

In fairness to me though, I was busy paying off my credit card bills and had no spare cash to drop in mutual funds. But when I finally managed to wipe out my credit card bills, I opened a whole life insurance with VUL with Sun Life and reactivated my sleeping balanced fund account.

I'm happy with the performance of my balanced fund (15% YTD growth), but it appears that I could have been happier if I plunked down my cash with FAMI-SALEF instead. Check out this table of mutual funds performance from Randell Tiongson:

It's sad that Sun Life didn't even rank in the stock and balanced funds. However, Randell Tiongson says that performance is not the only thing to consider when choosing a fund, to wit:

xxx When investing in a Mutual Funds, there are many things to consider other than performance. I’d pay close attention to fee structures as one company differs from another. Other concerns should be investment track record, experience of fund manager, shareholder servicing, among others. In my experience, after sales servicing is a big must and not all Mutual Fund providers give the same effort in servicing.
Be careful on just looking at yields. Aggressive fund managers will have better performance during a bullish market but will have also have performed worse during a down turn.

I have no plans of pulling out my Sun Life investments and intend to ride it out for the long haul, but in the meantime, I'll be setting up an account with FAMI-SALEF as well to take advantage of its consistently top-notch performance.

When it comes to mutual funds, the question isn't "What fund are you investing in?", rather, it's "Why aren't you investing in mutual funds?"

*Although I soon found out that the Alabang office was merely a branch and all the corporate staff report to the Makati, now Taguig, main office.


Lianne said…
Nice post about mutual funds. :) When I started investing, I actually had to choose between Sun Life and FAMI too! They're both great companies with a good track record so I feel pretty confident with them.
Jillsabs said…
Thanks!:) So which fund did you end up with, Sun Life or FAMI?
Lianne said…
I ended up with FAMI. I got Sun Life for my insurance. :)
I have my mutual funds in FAMI. In coming up with a decision on where to put my investment, I really find this site helpful:
Jillsabs said…
Thanks so much for the link! I've been saving my fund details in my email and then checking the yield by looking at the current NAV and doing some good old fashioned calculating:p is way better! Now I'm excited to start a fund with FAMI-SALEF just so that my portfolio will increase:p
Startup Mommy said…
Hi Jill i'm also looking at mutual funds as investment. I'd like to ask, did you get some sort of pass book or certificate or passbook from FAMI as proof of your deposit? Would you need to personally go to their office if ever you need to withdraw your funds? thanks a lot.
Jillsabs said…

FAMI will issue a confirmation receipt for every investment made and you'll need to present that confirmation receipt and a filled out redemption form to redeem your shares.

Here's a link to the redemption procedure:
Startup Mommy said…
thanks very much, jilL! i'm actually excited to invest in mutual funds.
Lyn Lyn said…
Hi Ate Jill! I also invested in FAMI. And when you have an online account with Metrobank and to its stock online brokerage, FirstMetroSec, pwde nyo pong ma-link ang FAMI account ninyo, pra you can monitor every MF deposit you made via online. :-) You can also do online transfer from your Metrobank SDA to your FAMI. :-)
Jillsabs said…
I'll check that out soon! Thanks for the tip :)
Anonymous said…
How much will be the initial investment that you think will be the best amount
Jillsabs said…
There's no best amount in my opinion because it really depends on how much you can afford to invest monthly.

In my opinion it's better to set aside a low amount like Php1,000 to invest monthly, than being overly ambitious and going for Php20,000/monthly when you can hardly afford it. If you peg an unreachable amount for yourself, then you'll probably lose interest in the long run.

As for the initial investment, the minimum is usually set by the fund company. The succeeding amounts then depend on how much you can afford.

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