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Best Mutual Funds in the Philippines for 2020 | An Update

Last Update February 20202020-Mutual-Funds-Philippines

 

Have you considered investing in any of the best mutual funds in the Philippines this 2020?

 

If yes, then this post may help you decide the best mutual fund in the Philippines to invest with.

 

Finding out the best mutual fund in the Philippines is hard.

 

To start with, the top performing mutual fund change every year.

 

You also need to understand that, just like any other investment, the risks are inevitable when it comes to investing in mutual funds.

 

Although mutual fund is a safer choice than investing in stocks on your own, there are still some cons you should be aware of.

 

 




 

First, you have zero control over your portfolio

Investing in Mutual Fund would mean no control over the stocks included in your portfolio.

 

You are basically investing in a pool of stocks, pre-selected through careful research by your Fund Manager.

 

For this reason you need to choose the best mutual fund in the Philippines in terms of overall performance.

 

You have to study how the fund manager chooses which stocks to include in your portfolio. And how these stock inclusions affects your monthly or yearly returns.

 

Second, fees and expenses

In order to maintain your mutual fund account, there are certain fees and expenses being deducted to your additional investment.

 

If you look at it in a macro basis, these fees are small compared to your entire investments. But, if you add all deductions and subtract it to your current returns you’ll notice how troubling the ratio can be.

 

I’ve been deducted of around Php 20 to Php 30 every time I make additional investments by my mutual fund provider. That Php Php 960 to Php 1440 in total could have been an additional 240 shares for me if I divide it to the latest First Metro Save and Learn Equity Fund Net Asset Value Per Share of Php 5.9.

 

All the best mutual fund in the Philippines have these different fees you could be paying without really even knowing it. Others don't bother to check these details, and lose out significantly because of it.

 

For this reason ask your relationship manager or fund manager on what fees could be involved in your investments.

 

Lastly, lower risk may mean lower gains

Diversification is the primary advantage of investing in mutual funds.

 

Your Php 5000 investment could buy you shares from different stocks. In direct stock investing, your Php 5000 investment could only buy you 100 shares of Puregold. But, returns of your investment in mutual fund is slower compared to stocks.

 

I’ve been investing in an equity mutual fund for five years now, and my return of investment is still below 10% at the moment.

 

Now that I also have a direct stock investment, I realized how harder it can be to feel the returns when it comes to mutual fund. But, since I am reserving my mutual fund for retirement I don’t really care that much. All I know is the earnings I get is way better than parking my money on a usual savings account.

 

In a nutshell, investing in the best mutual funds in the Philippines will not guarantee you great returns in a short span of time.

 

Invest now, invest regularly and invest long-term – these three phrases are the secret words in retiring rich when it comes to mutual fund.

 

But the question is – Which is the Best Mutual Fund in the Philippines to Invest in 2020?

 

This post will give you the rank of the country's top mutual funds based on return of investment from past year.

 

I hope you will enjoy today's post!

 

Related:

7 Advantages of Mutual Fund

Understanding Managed Funds as an Investment Vehicle in the Philippines

Personal Equity and Retirement Fund (P.E.R.A.) in the Philippines

 

What is a mutual fund?

 




 

Mutual fund is a kind of investment in the Philippines wherein your investments are pooled together with the others, professionally managed and invested in specific types of securities.

 

Visualize it this way:

 

You invest in a specific type of mutual fund. Your money as well as the other investors are pooled together by the mutual fund company.

 

Your mutual fund company will act as the fund manager who the money in stocks, mutual funds and other equities.

 

To put simply, investing in mutual funds is like an indirect investment in the stock market. It works like a normal savings account where you can top up your investment for as low as 1k but the ROI is way higher since it is invested in stocks.

 

Read next – My First Six Months in the Philippine Stock Market

Why you Should Invest in Mutual Fund?

1. Low Initial Investment

Starting a mutual fund account will only cost 5,000pesos which is a very fair amount whether you are working in a minimum wage or above minimum. All you have to do is start saving that said initial investment and for additional investment you can just give as low as 1,000 pesos a month!!!

 

2. Diversification

When you open your mutual fund account, all the money you invest will be diversified to different corporations intelligently picked by experts. 

 

3. Convenience and Cost Efficiency

In mutual fund you are free of stress in buying or selling or any other key terms and what about in the stock market. The fund manager/company where you opened your account will do everything for you. All you have to do is give additional investment every month. This will save you time, effort and additional money for transportation too.

 

4. Principle of Compounding

If you are starting your research about financial management then you have already heard of the term compounding. Compounding is the best friend of your investment. The more time your money is in the stock market the higher it will gain interest. Even if you stop investing after five years as long as your money is the mutual fund account it will still gain interest and will still make you a millionaire. This principle is present in every mutual fund accounts.

 

5. No more Tax

Now this is the true reason why mutual fund is advantageous. There is no tax applicable for this one. All your investment will be with you without any tax deduction. What you see in your paper assets will be the same when you put it to cash.

 

6. Regulated by SEC

It is actually a good thing to have a back up in every investment that you make. Fortunately, investing in mutual fund is regulated by the Security and Exchange Commission so you will have no worries that your investment will be put to waste. Just be sure to invest in true and regulated mutual fund firms.

 

7. Liquid Statement

Liquidity is easier in mutual fund because the company will really let you see what is happening to your investment. The breakdown of everything is present that gives you an edge over other investments. There is also easy access to information in mutual fund because they are just a call or an email away and they send information to your email address in real time.

 

Read next – 13 Things I Do To Improve My Finances

 

 

What are the Different Types of Mutual Funds?

 

The best mutual funds in the Philippines are categorized into four types:

 

 




 

1. Equity Funds

2. Bond Funds

3. Money Market Funds

4. Balanced Funds

 

Just like the latest reader question I answered, the type of mutual fund mentioned above are further characterized based on Composition (where it invests), Horizon (how long you should invest to see the ROI), Objective (why are you investing) and Risk Type (what type of investor are you).

 

The table below will help you decide which type of Best Mutual Funds in the Philippines is right for you.

types-of-mutual-fund

Another mutual fund type you should know are Index Funds. I created a detailed guide on Index Funds in this post – Investing in Index Fund for Beginners.

 

Is Mutual Fund for You?

To simply know whether a mutual fund is the right investment vehicle for you. Ponder upon the following:

 

It is for you if you have no trust issues

If you have issues entrusting your hard earned money to others then a mutual fund might not satisfy your investment cravings.

 

Mutual Fund works like a savings account that you need to fund.

 

Then a professional fund manager will put your money in the market and make it earn for you.

 

It is for you if you are for long-term investment

Mutual Fund doesn’t make you an instant millionaire.

 

You need to wait for your money to accumulate wealth in a slow but steady manner. For example, a capital of 25,000pesos invested in a Money Market Fund can be 2-3 million in 20-25 years from now. (This depends on what type of mutual fund you invested).

 

If you are willing to wait then mutual fund is for you

 

It is for you if you are a beginner

Mutual Funds are one of the easiest ways to own shares/stock. You won’t be bombarded with hard financial terms.

 

You don’t need to worry about deciding what stocks to buy or to sell because a trusted fund manager will do it for you.

 

SIDE STORY. I invested in an equity mutual fund at 19 and started investing in the direct stock market at 22 (this year) So far both investment vehicles are performing good.

 

Now that I’ve covered all the basics about investing in mutual funds, this list of the best mutual funds in the Philippines 2020 will be updated from time to time to give you a definitive comparison.

 

Please take note that the Net Asset Value Per Share (NAVPS) used in the following table is as of December 26, 2019.

Equity Fund

 

Name of Mutual Fund
Year-To-Date ROI 1-Year ROI
5-Year ROI10-Year ROI
United Fund, Inc.4.86%5.07%2.65%4.57%
Sun Life Prosperity Philippine Equity Fund, Inc.4.21%4.48%0.99%8.71%
Philam Strategic Growth Fund, Inc.3.93%4.26%-0.01%5.36%
Philequity Fund, Inc.3.87%4.10%0.66%11.33%
Philequity Dividend Yield Fund, Inc.3.02%3.22%0.70%Not Available
First Metro Save and Learn Equity Fund,Inc.1.36%1.92%-0.59%9.79%
ALFM Growth Fund, Inc 0.33%0.62%-0.43%7.83%
Climbs Share Capital Equity Investment Corporation0.21%1.20%Not AvailableNot Available
Soldivo Strategic Growth Fund, Inc. -0.60%-0.33%-1.68%Not Available
ATRAM Alpha Opportunity Fund, Inc.-4.33%-2.68%-3.36%Not Available
ATRAM Philippine Equity Opportunity Fund, Inc.-5.31%-4.94%-3.17%7.29%
MBG Equity Investment Fund, Inc. -10.98%-12.80%Not AvailableNot Available
Philippine Stock Exchange Index5.04%5.27%1.90%Not Available

 

Balanced Fund

 

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI10-Year ROI
PAMI Horizon Fund, Inc.7.62%7.65%3.50%0.50%6.74%
Philam Fund, Inc.6.88%7.06%3.39%0.42%7.12%
NCM Mutual Fund of the Phils., Inc6.62%6.70%3.97%1.30%Not Available
Sun Life Prosperity Dynamic Fund, Inc.6.18%6.28%3.95%-0.12%Not Available
Sun Life of Canada Prosperity Balanced Fund, Inc.6.11%6.36%4.44%0.82%6.82%
First Metro Save and Learn Balanced Fund Inc.3.67%4.11%3.95%-0.99%8.08%
Solidaritas Fund, Inc.3.18%3.24%2.98%1.14%Not Available
Grepalife Balanced Fund Corporation1.92%2.04%Not AvailableNot AvailableNot Available
ATRAM Philippine Balanced Fund, Inc.-1.02%-0.58%0.28%0-1.26%6.71%
ATRAM Dynamic Allocation Fund, Inc.-5.11%-5.04%-1.39%-3.95%5.15%
First Metro Save and Learn F.O.C.C.U.S. Dynamic Fund, Inc.Not AvailableNot AvailableNot AvailableNot AvailableNot Available

 

Bond Fund

 

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI10-Year ROI
Philam Bond Fund, Inc.11.54%11.54%2.85%1.77%4.12%
Sun Life of Canada Prosperity Bond Fund, Inc.11.18%11.35%4.90%2.67%4.09%
Sun Life Prosperity GS Fund, Inc.10.63%10.63%4.45%2.21%3.62%
Soldivo Bond Fund8.01%8.01%1.52%0.11%Not Available
Philequity Peso Bond Fund, Inc.7.38%7.75%2.99%1.42%4.78%
First Metro Save and Learn Fixed Income Fund, Inc.6.97%6.81%2.39%1.58%6.03%
Cocolife Fixed Income Fund, Inc.4.64%4.88%5.21%5.21%6.33%
Ekklesia Mutual Fund, Inc.4.44%4.35%2.46%1.96%4.19%
ALFM Peso Bond Fund, Inc.4.18%4.21%2.83%2.33%3.95%
Grepalife Fixed Income Fund Corp.2.69%2.80%0.99%-0.13%2.08%
ATRAM Corporate Bond Fund, Inc.2.27%2.32%0.00%0.00%2.35%

 

Money Market Fund

 

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI
Philam Managed Income Fund, Inc.6.29%6.35%3.04%
1.71%
ALFM Money Market Fund, Inc. 4.05%4.11%2.86%2.18%
Sun Life Prosperity Money Market Fund3.68%3.74%2.88%2.34%
First Metro Save and Learn Money Market Fund3.29%Not AvailableNot AvailableNot Available

 

Index Fund

 

Name of Mutual FundYear-To-Date ROI1-Year ROI3-Year ROI5-Year ROI
First Metro Equity Exchange Traded Fund5.96%6.18%7.07%
2.88%
Philequity PSE Index Fund Inc.5.72%5.93%6.43%1.95%
Philippine Stock Index Fund Corp.5.63%5.85%6.34%1.90%
Sun Life Prosperity Philippine Stock Index Fund, Inc.5.25%5.46%6.07%Not Available
PAMI Equity Index Fund Inc.4.58%4.79%5.79%Not Available
First Metro Consumer Fund Inc.3.95%4.21%Not AvailableNot Available
First Metro Save and Learn Philippine Index Fund, Inc.2.39%3.07%0.06%-3.49%
Philequity MSCI Philippine Index Fund, Inc.-1.25%Not AvailableNot AvailableNot Available

 

1. Based on www.pifa.com.ph

2. ROI means Return of Investment

3. Not Available means the mutual fund hasn’t reached yet a YTD, 1-Year, 3-Year, 5-Year or 10-Year mark for an ROI to be computed.

 

Here are some observations worth mentioning:

1. The best mutual fund in the Philippines can change in a matter of months/s

 

It will be hard to predict the ranking of mutual fund companies because the stock market itself is a big bubble.

 

The top spot is harder to maintain because different fund managers use different strategies when it comes to investing.

 

Choosing your mutual fund provider based on past performance can be tricky for there’s no assurance that the fund will perform the same in the next couple of months or years to come.

 

Past performance can be really tricky. It is okay to choose your mutual fund provider based on past performance, BUT remember that there is no guarantee that your provider will perform the same or better forever.

 

2. The returns can be your deciding factor too

If you look at the ranking the Year-To-Date Returns as well as 1-Year Returns of every mutual fund in the Philippines are tightly close to each other.

 

However, 5-Year and 10-Year Return has a big difference.

 

If you want to invest your money and see returns in a short period of time, you can choose the best mutual fund based on Year-To-Date or 1-Year Returns.

 

But, if you are in for long-term investing, choose the best mutual fund in terms of 10-Year returns.

 

How can you adapt this when it comes to choosing where to invest in 2020?

 

If you have a goal to park your money in a vehicle that could give the best returns in less than a year, go for United Fund, Inc., PAMI Horizon Fund, Inc., Philam Bond Fund, Inc., Philam Managed Income Fund or First Metro Exchange Traded Fund, Inc.

 

But, if you are opening a mutual fund account as part of your long-term plan or retirement, I suggest going with First Metro Save and Learn Equity Fund, Inc. or Philequity Fund, Inc., both with the highest 10-year return among the list.

 

3. Mutual Fund is just another investment vehicle available

You should realize that a mutual fund is just another vehicle for investment like stock market, Unit Investment Trust Fund (UITF), Personal Equity Retirement Account (PERA), time deposit and even bitcoin.

 

Each investment vehicle has its own advantages and disadvantages.

 

It is important for you to know this so you can ponder upon which investment vehicle is right for you. Please research too about other investment vehicles that may answer your financial goals.

 

The key here is to not put all your eggs in one basket. If you have the means to diversify in other investment vehicles, please do so.

 

I, for example, continutes to diversify my investments by researching of new vehicles available. I do Philippine stock market AND in online farming or crowdfunding.

 

4. The best strategy (still) is to invest long term

Because of how volatile or unstable the stock market can be, the best strategy is still to hold your shares for a long period of time.

 

Looking back, have I not invested my extra cash in a mutual fund, I would have wasted all the money buying makeup and skincare.

 

Yes, those can bring me a moment of happiness but, seeing my money grow in a mutual fund has a different effect.

 

If you have any money left from your 13th month pay or other bonus last year, try investing in a mutual fund of your choice.

 

Put that money at work for a long period of time and then reap the rewards after.

Mutual-Fund-Performance-Report-2020

 




 

How To Start Investing in Mutual Funds

Investing in mutual funds is easy.

 

Depending on the financial company you will entrust your investments with, you may need to do/to present the following:

 

1. Visit the website of your chosen mutual fund asset management company.

2. On their website you can easily find the page for Mutual Fund and/or Investment Products.

3. Read the differences of each mutual fund offerings. Select your fund based on your personal investment objectives, investment horizon and your risk profile.

READ: Reader Question | Where Should I Invest My Money?

4. Download the needed forms. This will depend on your chosen mutual fund asset management company.

Prospectus which is required and filed with the Securities and Exchange Commission. This document provides details about an investment offering as well as facts that an investor needs to make an investment decision.

Account Opening Form which is required to be filled up for your information and other personal reference.

Investment Risk Profiling Questionnaire which will know your investment risk profiles and match you with the right companies to invest with.

 

5. Prepare a photocopy of your valid ID.

 

6. Have you initial investment ready. Initial investment for a Mutual Fund account ranges from 5,000pesos to 10,000pesos.

 

7. Submit all your requirements. You may need to go to the nearest office or send through mail. Sun Life for example introduces an online facility that allows you to add, transfer and redeem shares anytime, anywhere. On First MetroAsset I opened my account by submitting all the forms and requirements via Metrobank branch. 

 

8. Wait for your proof of purchase and/or statement of account to arrive.

 

9. Fund your account.

 

Final Words from SavingsPinay

This post will be updated from time to time to give you the latest return of investment status of the best mutual funds in the Philippines.

 

Mutual Fund is a good investment vehicle for those who are just starting out in the stock market. It is a good option for your retirement fund so better invest as early as tomorrow or better yet, now.

 

Mutual Funds are by far the most popular investment vehicles for newbies. It is affordable, it is convenient and it is regulated. But investing in mutual funds has bad and ugly sides too. It is important to note that every investment has loopholes just as how every investment contains risks.

Clariza Glino

Izza of SavingsPinay helps Filipinos bridge the financial literacy gap one content at a time by providing insights and tips on budgeting, saving, investing, side hustle and growing your net worth. Aside from this blog she also writes at www.izzaglinofull.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her at izza@savingspinay.ph

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