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Investment 101 Mutual Fund Basics

Problem: Most people need some help with their BIG investment decisions. They simply dont have the time or investment expertise to do it alone in this area.

Solution: Professional money management for Middle Class Filipino

Financial Planning Workshop

Majority of Filipinos retire broke.Why????
They never have convenient time for these people to set aside money, so they never got started. People never plan to fail, they just simply fail to make a plan

Whats your plan to replace your income when you retire?

____Work after Retirement? ____ Dependent on Children? ____ SSS, GSIS, Company Retirement? ____ Bank Savings Accounts, Time Deposit, CDs? ____ Investments -Mutual Funds, Stocks, UITF, etc.? ____ Long Term Healthcare, Pension Plans, etc.? ____ Royalty Income? Do Business? Build Outlets? ____ All of the above? Active Income? Passive Income? Financial Planning is the process of meeting your life goals through the proper management of your finances. Create a definite plan for carrying out your desire, & BEGIN at once, whether you are READY OR NOT, to put this plan into ACTION!

Savings & Investments Options

1. Bank
Savings Deposits, ATM Account, Time Deposits, Certificates of Deposits, UITF

2. Mutual Funds
Bond Fund, Balanced Fund & Stocks/Equity Fund. *Currency Denominated: Dollar, Peso & Euro

3. Stock Market, Equities, Real State, Bonds, T Bills, Notes or (Government Securities) 4. Long-Term Healthcare, Pension Plans, Investment in Insurance

Where to Invest?
Answer: Depends on your Investment Goal
For short-term goals, invest in short-term instrument For long-term goals, invest in long-term instrument

Your Investment Goal Where to Invest

1 day to 11 months Save on short term instruments like ATM or Bank savings Account

1 year to 5 years
More than 5 years

Bond fund, Treasury bills, Bank Time Deposit & CDs

Stocks, equities, MF-balanced funds, long-term healthcare, pensions plans, investment in insurance, real estate, etc.

Rate of Return is dependent on the amount of risk you assume!

You need to give up liquidity to get higher return. Liquid and high return is not possible.
You cannot achieve your financial goals if you invest in short-term instruments for your long-term goals!

Rules of Investing
Rule # 1 If your investment goes into loanership investments(cash
values, savings accounts, time deposits, etc.), your return will probably be low (e.g. 4%).

Rule # 2 If your investment goes into ownership investments, your

return may be as high as 12% or possibly even more. There are no guarantees. If you want to maximize your return on investment, you have to accept some risk.





Rules of Investing
We believe that INVESTING is no longer a rich mans game its everyone reality! We move people from to take ownership in investment opportunities! But be careful when you get into the area of more sophisticated investment, you may need some advice and direction to make good investment choices. Also, there are basic rules you must consider. Unless you have extensive knowledge in the stock market, know how to analyze which are good and which are bad, or your temperament wouldnt allow you to lose if the stock market took a down turn, then you need professional investment management INVEST IN PROFESSIONAL MANAGEMENT For these reasons, I recommend an investment concept called MUTUAL FUNDS for Middle Class Filipino especially OFW.

What is Mutual Fund?

- Is the secret of the WEALTHY which is now AVAILABLE to us!! -Allows the OFW to have EQUAL INVESTMENT OPPORTUNITY with the wealthy!! -Is an investment company that pools money from investors with the same investment objectives. - Not covered by PDIC RA 3591 DEFINITION OF TERMS 1. Net Asset Value Per Share 2. Sales Load 3. Booking/Redemption 4. SOA 5. Stocks 6. Stock Market 7. Prospectus 8. PHISIX / PSEi 9. Government Securities 10. Commercial Papers - NAVPS ; basis for computations - Entry or Exit Fees - Crediting process - Statement of Account - smallest unit of ownership - organized venue where brokers meet to buy and sell shares. - Legal Document - Philippine Composite Index - Treasury Bills, Notes & Bonds; sovereign debt - debt instruments of corporations

What is Mutual Fund?

Mutual Funds Defined Although it may seem rather complicated, mutual funds can be defined in very simple terms. Simply put, a mutual fund is an investment company that puts together the resources of individual and institutional investors to accumulate a substantial asset base and then invest it in a diversified portfolio of security investments such as stocks and bonds for maximum gain. The professional fund manager may also decide to invest in some short term money market investments, other securities or assets, or a combination of some or all of these to achieve its goals. Legally speaking, the investors are the rightful owners of the mutual fund company. The shares they purchased represent how big or how small their ownership is. Their shares likewise determine how much income they will ultimately generate from their investments. So how do mutual funds generate income for its shareholders? Well, they do so in two ways. The first one is through the form of dividends and interests from its investments, and the other one is through capital gains (this happens when the value of the security increases). In any case, the mutual fund company will pass all net dividends, interests and profits to its shareholders in the form of distributions. Like all other investment options, mutual funds have their own unique pros and cons. On the positive side, mutual funds are managed by an experienced and capable fund manager who does all the heavy work for you from researching and selecting the most suitable investment options to monitoring your investments. All you need to do is sit down, relax, and hopefully watch your money grow. Your mutual fund manager will also ensure that your money is well protected from any unforeseen eventualities by spreading them across many different companies and sectors. As the saying goes never put all your eggs in one basket! Another attractive feature of mutual funds is their liquidity. Mutual funds are readily convertible to cash, whenever you may need it. Under existing laws, you can get your money within seven days of surrendering it but some companies can give you back your investments within the day! And the best part is that most mutual funds require minimal investment. Some require as low as P5,000.00 to get you started, so even the average Juan dela Cruz can profit from this rapidly growing industry.

What is Mutual Fund?

If given a choice, do you want to become a business partner with these BIG & SUCCESSFUL CORPORATIONS??


BUT HOW??? Thru Mutual Funds!

We are indirectly a business partner!

What is Mutual Fund?



Mutual Funds Structure

Mutual Fund Shareholders

Fund Board of Directors

Investment Adviser
200 195 Production Costs Unit Price Profits

Fund Administrator

Principal Distributor

Custodian Bank

External Auditor

Millions of Dolla rs

190 185 180 175 170



155 150 1990 1991 1992

Types of Mutual Funds

TYPE MONEY MARKET FUND BOND FUND BALANCED FUND STOCK / EQUITY FUND INVESTMENT OBJECTIVE COMPOSITION short-term fixedstability plus income minimal growth instruments fixed-income stability plus instruments reasonable growth medium to long stocks & term for moderate fixed-income investors shares of stocks; long-term "equity funds" capital growth AVERAGE EARNING 2% 6% 12%


Risk and Reward Spectrum

Investment Details
MUTUAL FUND CO. Phil. Equity Equity Fund 5K 1K 2yrs 3.5 1% 2yrs -1.5% INITIAL ADDL INV HOLDING PERIOD ENTRY FEE EXIT FEE

Bond Fund
FAMI Equity Balance Bond Philam Equity

5K 5K 5K 10K

1K 1K 1K 1K

6 months 6 months 6 months 6 months

2-0.5% 2-0.5% 2-0.5% 5.6-2.24%

1yrs -2%
1% 1% 1% 1.12%

Benefits of Mutual Funds

1. Diversification

2. Tax Exempt
3. Professional Fund Management

4. Affordability
5. Liquidity

6. Safety (Regulation and Disclosure)

7. Convenience

Money Cost Averaging

Know the Risk

Total Shares = 42.28

Total Shares = 85.25

Total Shares = 257.22


MUTUAL FUND MUTUAL FUND Tax-Exempt Not Guaranteed SEC Liquid Flexible Returns INSURANCE With Tax Guaranteed IC Not Liquid Fixed Tax-Exempt

UITF With Tax

Investment Company Common Shares

SEC With Full Disclosure Without Reserve Reqts Prospectus

Trust Dept Units of Participation

BSP Not Required With Reserve Reqts Not Required

Independent Custodian Bank Itself Holds Assets

Various Uses of Mutual Funds

Individuals: 1. Funding for Education 2. Funding for Retirement 3. Estate Planning / Wealth Transfer

Investment Programs
Monthly Investment 5 Yrs Saving 10 Yrs Saving (Pesos) Value on 20th Year Value on 20th Year 2K 5K 10K 507,775 1,273,438 2,560,380 830,748 2,090,750 4,197,825

20K 30K

5,141,259 7,739,601

8,417,776 12,677,686

Institutions: 1. Employee Retirement Funding 2. Employee Retention Program 3. Diversification of existing investment portfolio

Mutual Fund Providers

RAMPVER STRATEGIC ADVISORS (RSA) is a division of Rampver, Inc. that
promotes financial responsibility, security and focus to gain affluence. It is a financial intermediary engaged in risk management, money and asset management advisory, training and consulting and product and services trading.

Philequity Management, Inc.

Philequity Fund Inc. Philequity PSE Index Fund, Inc. Philequity Peso Bond Fund, Inc. Philequity Dollar Income Fund, Inc.

First Metro Asset Management Inc.

First metro Save and Learn Equity Fund First Metro Save and Learn Fixed Income Fund First Metro Save and Learn Money Market Fund

Philam Asset Management, Inc.

Philam Bond Fund Philam Dollar Bond Fund Philam Strategic Growth Fund Philam Fund, Inc. Philam Managed Income Fund AIG Global Bond Fund GSIS Mutual Fund

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