investment 101 - mutual fund basic

7/29/2019 Investment 101 - Mutual Fund Basic

1/22

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 inthis area.

Solution:

Professional money management for

Middle Class Filipino


2/22

Financial Planning Workshop

Majority of Filipinos retire broke.Why????

They never have convenient time for these people to set aside money, so they nevergot 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!


3/22

Savings & Investments Options

1. BankSavings Deposits, ATM Account, Time Deposits, Certificates of Deposits, UITF

2. Mutual FundsBond 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


4/22

Where to Invest?

Answer: Depends on your Investment Goal

For short-term goals, invest in short-term instrumentFor 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 Bond fund, Treasury bills, Bank Time Deposit & CDs

More than 5 years 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!


5/22

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, yourreturn may be as high as 12% or possibly even more. There are no

guarantees. If you want to maximize your return on investment, you haveto accept some risk.

YOU

BANKS FINANCIAL

INDUSTRY

YOU


6/22

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 managementINVEST IN PROFESSIONAL MANAGEMENT

For these reasons, I recommend an investment concept called MUTUAL FUNDS

for Middle Class Filipino especially OFW.


7/22

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 sameinvestment objectives.

- Not covered by PDIC RA 3591

DEFINITION OF TERMS

1. Net Asset Value Per Share - NAVPS ; basis for computations

2. Sales Load - Entry or Exit Fees

3. Booking/Redemption - Crediting process

4. SOA - Statement of Account

5. Stocks - smallest unit of ownership

6. Stock Market - organized venue where brokers meet to buy and

sell shares.7. Prospectus - Legal Document

8. PHISIX / PSEi - Philippine Composite Index

9. Government Securities - Treasury Bills, Notes & Bonds; sovereign debt

10. Commercial Papers - debt instruments of corporations


8/22


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.


9/22


If given a choice, do you want to

become a business partner with theseBIG & SUCCESSFUL CORPORATIONS??

WHY NOT!

BUT HOW???

Thru Mutual Funds!

We are indirectly a

business partner!


10/22


STOCK

MARKET

NAVPS


11/22

Mutual Funds Structure

200

195

190

185

180

175

170

165

160

155

150

Mi lli ons

ofDol lars

199219911990

Production Costs

Unit Price

Profits

Mutual Fund

Shareholders

Custodian

BankPrincipalDistributorInvestmentAdviser ExternalAuditor

Fund Board

of Directors

Fund

Administrator


12/22

Types of Mutual Funds

TYPE INVESTMENTCOMPOSITION OBJECTIVE AVERAGEEARNING

MONEY MARKET

FUNDshort-term fixed-

income

instrumentsstability plus

minimal growth 2%BOND FUND fixed-income

instruments stability plusreasonable growth 6%BALANCED

FUND stocks &fixed-income medium to long -term for moderateinvestors 12%

STOCK / EQUITY

FUND shares of stocks;"equity funds" long-termcapital growth 18%


13/22

Risk and Reward Spectrum


14/22

Investment Details

MUTUAL

FUND CO.

INITIAL ADDL INV HOLDING

PERIOD

ENTRY FEE EXIT FEE

Phil. Equity

Equity Fund 5K 1K 2yrs 3.5 1% 2yrs -1.5%

Bond Fund 10K 5K 2yrs 1-0.25% 1yrs -2%FAMI

Equity 5K 1K 6 months 2-0.5% 1%

Balance 5K 1K 6 months 2-0.5% 1%

Bond 5K 1K 6 months 2-0.5% 1%

Philam

Equity 10K 1K 6 months 5.6-2.24% 1.12%


15/22

Benefits of Mutual Funds

1. Diversification

2. Tax Exempt

3. Professional Fund Management

4. Affordability

5. Liquidity

6. Safety (Regulation and Disclosure)

7. Convenience


16/22

Money Cost Averaging


17/22

Know the Risk

Total Shares = 42.28 Total Shares = 85.25 Total Shares = 257.22


18/22


19/22

Comparisons

MUTUAL FUND INSURANCETax-Exempt With Tax

Not Guaranteed

Guaranteed

SEC ICLiquid Not Liquid

Flexible Returns Fixed

MUTUAL FUND UITFTax-Exempt With Tax

Investment Company Trust DeptCommon Shares Units of Participation

SEC BSPIndependent Custodian Bank Itself Holds Assets

With Full Disclosure Not RequiredWithout Reserve Reqts With Reserve Reqts

Prospectus Not Required


20/22

Various Uses of Mutual Funds

Individuals:

1. Funding for Education

2. Funding for Retirement3. Estate Planning / Wealth Transfer

Monthly Investment

(Pesos)

5 Yrs Saving -

Value on 20th

Year

10 Yrs Saving -

Value on 20th

Year2K 507,775 830,7485K 1,273,438 2,090,750

10K 2,560,380 4,197,82520K 5,141,259 8,417,77630K 7,739,601 12,677,686

Institutions:

1. Employee Retirement Funding

2. Employee Retention Program

3. Diversification of existing investment portfolio

Investment Programs


21/22

RAMPVER STRATEGIC ADVISORS (RSA) is a division of Rampver, Inc. thatpromotes 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

Mutual Fund Providers

h


22/22

INVESTMENT 201

MUTUAL FUND APPLICATION

Whats Next

ATTEND

investment 101 - mutual fund basic

Documents