What is Mutual Funds?

A mutual fund is an investment company that collects or pools investors' contributions for the  purpose of investing it in different vehicles such as stocks, bonds, money market instrument, or combinations of the three.

When you invest, you becomes a shareholder or part-owner of the fund and receives a number of shares  depending on the NAVPS (Net Asset Value Per Share). The  NAVPS varies daily because of the market changes that affect the underlying securities in the mutual fund.

MUTUAL  FUNDS can be classified into Four Basic types:

1.  EQUITY FUNDS

> 75%-90% invested in stocks. Higher risk compared to other types of Mutual Funds.

> average annual return is 12%-20%

> for aggressive type of investors

> ideal for longterm goals (5years or more)

2. BOND FUNDS

> 100% in fixed-income securities. Medium risk, lower risk compared to other types of mutual funds.

> average annual return is 6%-10%.

> for conservative type of investors.

> ideal for longterm capital preservation (5years or more)

3. BALANCED FUNDS

> 50% in stocks, 50% in fixed-income securities. Medium risk, moderate risk compared to other types of mutual funds.

> average annual return is 10%-15%

> for balanced type of investors

> ideal for medium to longterm growth (3-5years or more)

4. MONEY MARKET FUNDS

> 100% in short term fixed-income securities. Medium risk, even lower risk compared to other mutual funds.

> average annual return is 1%-2%.

> ideal for very conservative type of investors

> for short term capital preservation (1-2 years)

NOTE: Upon purchasing your fund, front-end fees also applied or what we called SALES LOAD. The mutual fund company will likely charge you around 3% - 3.5%  for initial investment and so does every additional investment you make.

However, being an IMG member let you invest with ZERO SALES LOAD. That way, you can invest more!