What is a Mutual Fund? ~ Mutual Fund Philippines

A mutual fund is a pool of money professionally managed and invested in specific types of securities. The manager of a mutual fund is guided by strict regulations. However, he monitors the value of investments very closely so that he can maximize the earnings of the fund, while operating within the fund’s investment objective and guidelines. A good investment manager should outperform the usual alternative investments available mostly to big investors.

By buying shares of the mutual fund company of his choice, an investor adds his investment to the rest of the fund which managed as one pool, regardless of the size of the investments and the number of investors, both individuals and institutions.

A mutual fund is an easy and efficient way for an investor to have his money managed by a professional investment manager in a diversified and optimized manner.

The values of all the investments made by the mutual fund change daily depending on movements in interest rates (for fixed-income securities) and stock market prices (for equities). Whether or not the fund manager sells these securities that day.

The Net Asset Value is computed by deducting all the costs and liabilities incurred by the mutual fund company from the total assets. The Net Asset Value per Share (NAVPS) is the price of a mutual fund share. It is the price at which a mutual fund share is bought or sold to investors. The NAVPS is computed daily and published in leading newspapers.

Here are some resources that will help you further your understanding about Mutual Funds: