How to Pick the Best Mutual Fund

by Gily Tenorio on October 30, 2010

in Mutual Funds


Mutual fund investing is getting popular in the Philippines recently because many Filipinos now are learning financial education. We can see it in many trainings and seminars that are being conducted around the country involving financial education, business ideas, self-motivation and many more.

I have been investing in mutual funds only this year and I begun to learn many sides of investing in mutual funds. Actually, some of the financial gurus and advisers recommend to invest some part of your money in mutual funds because it is professionally managed by experienced investors in stocks, bonds and commodities.

Compared to investing in stocks directly by yourself, investing in mutual funds has less risk of losing money because the money you put in mutual funds are managed by professional investors. If you invest directly in stocks, you may have limited knowledge about the stocks you will buy and you don’t know what price you should buy it or sell.

One common problem of newbie investor is choosing the best mutual fund in the market. It is also my problem when I started to buy mutual fund last January of this year. I don’t have relatives or friends that I can ask on how to pick the best mutual fund since no one of them have the experience in investing in mutual funds.

However, before I bought my mutual funds, I make it sure that I thoroughly understand what I am dealing with since it is my money involved. I learned different types of mutual funds that you can buy in the Philippines. In my research and study, I learned how the procedures and benefits of investing in mutual funds.

How to Choose the Best Mutual Fund

Some of the pointers you need to know in choosing the best mutual fund are the following. This list is some of the criteria I’m looking for the best mutual fund.

1. History of Good Performance

You can learn the performance of mutual funds in the Philippines by visiting ICAP website. It is the association of all mutual fund companies in the Philippines.

2. Managed by Experienced Fund Managers

In the mutual fund prospectus which you can download from their website, you will know who are the fund managers and their competencies in managing the money of your fund.

3. No or Low Sales Load and Redemption Fee

Every time you buy or invest in mutual funds, you will be charge a sales load normally 0.5 to 2% of the money you will invest. However, some mutual fund companies waived this fee so it will be free to buy mutual funds. Most of the companies do not charge redemption fee after six months period.

4. Ease of Adding Funds

For me this is very important since I am working abroad. Every time I want to buy or add my mutual fund investment, I just can do it online using my Metrobank Direct Access. In the bills payment, I can buy more shares by selecting my mutual fund just like paying utility bills.

5. Good Support and Customer Service

A customer-oriented company is quick in responding to its clients request and queries, they are accommodating and helpful to their needs.

Choosing the best mutual funds suited for you is not easy thing to do. You need a sufficient information to decide where to invest your money. In order to pick the best mutual funds available in your location, you can consider my suggestions above. It can help you decide which funds to choose from.

Comments on this entry are closed.

elleica March 10, 2011 at 09:48


I have been reading thru your site and I find it very informative. I am considering investing in mutual funds and hopefully investing in the stock market in the future when I am more knowledgeable and experienced.

Just one question though. Is there an article here about how mutual funds really work? I mean you buy/invest in mutual funds for (example) P5k initial investment then P1k monthly investment (as I read in one of your comments). Apart from that do you pay anything else monthly? Like the sales load or redemption fee - is that like a service fee charged by the mutual fund company? And then how does your investment get back to you? Do they deposit it back to your account?

I’m sorry if my questions sound foolish. I have basically zero knowledge in financial education but I want to learn more so I can make my money work better for me. I am actually very grateful for your site because I am learning so much.


Gil March 10, 2011 at 10:56

When you buy MF, there’s a 1-2% sales load every time you buy. In case of FAMI, after 6 months elapsed since you bougth MF, there will be NO redemption fee. The management fee is already reflected on the prevailing net asset value per share (NAVPS) so basically no monthly fee. If you want to redeem MF, you need to fill up a form and send it to MF company, and then they will deposit the money in your designated bank account you put in the MF application. See more about MF here:

LR January 30, 2012 at 05:12

Where can you get info when its a good time to add to your existing Mutual Fund (when its low and much cheaper) or also when its the right time to invest in a new one? Tnx.

learnfe February 5, 2012 at 12:35


It’s very hard to know when is the best time to buy, the strategy I’m doing is buying when the stocks are down so I know the share/NAVPS of MF will be also lower than before.

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