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30.11.07

Asus Eee - My Christmas Wishlist

Here's my christmas wishlist for 2007, a 7" mini pc "ASUS Eee". Currently selling at less than 600 SGD (less than 18K Php) and availabale in 4GB HD . You can use it to keep track of your online shares and forex investments. Lightweight, Cheaper, plus all the basic features you need in a laptop. An ofw Investor's Gadget.


Easy to Learn, Easy to Work, Easy to Play

Share photos of your travels without waiting till you get home. Shop the world wide web without attaching any lines or wires. Learn through the latest technology without a technical manual. Play, relax, and entertain on the go with shock-proof design. Connect with friends and family with just a few clicks.

Mobility & Reliability
• At 7" and weighing only 0.92kg, you can take the Eee PC anywhere.
• Bumps and shocks are no longer issues. With a dependable solid-state disk, you get unparalleled shock-protection and reliability.
• Power-efficient design provides longer operating time when on the go.


Ease & Technology
• With a rapid start-up time, the Eee PC is always ready to get into action.
• No technical manual required with the specially designed, user-friendly and intuitive graphic interface.

Work & Connectivity
• You’re always connected with built-in WiFi 802.11 b/g that automatically detects and connects to the Internet at any hotspot.
• The Eee PC includes the documents and the e-mails software, and a suite of other productivity software to help keep you on track.
• Upload photos and videos and share them instantly on Flickr or YouTube without waiting till you get home.

Media & Entertainment
• Enjoy music and videos with extensive support for a wide range of digital multimedia. • Log on to Skype or other network, and you can connect with friends anywhere, anytime. • Clear up wire clutter with the built-in card reader, camera, speakers, and microphone.

source: www.asus.com

some reviews here:

www.laptopmag.com

www.notebookreview.com

28.11.07

Risk Appetite

For a lot of investors, investing can be a pretty simple activity. It involves keeping oneself updated through numerous magazines, newspapers and news channels about the latest, most touted investment opportunities. The next step is obvious -- invest in these opportunities to the hilt in the hope of making some easy money. And if everything goes right, investors would have made a neat packet all because they were quick to seize upon these great investment opportunities.

We are sure the 'investment process' we have outlined will strike a chord with many an investor. We are not saying this is how all investors are investing, but it is a disturbingly familiar sight. As more and more newspapers, news channels, magazines, personal finance initiatives get launched, media hype around these so-called investment opportunities builds up even more rapidly, which in turn feeds investor interest. This escalates to a point where investors believe that since everyone is investing in the 'hot' investment opportunity, prudence demands that they adopt the same course of action, because not doing so will entail a great opportunity loss.

We could write an entire note on how this whole rigmarole is a prefect recipe for disaster and that investors should take the media hype with a bagful of salt. Over here we wish to highlight something critical that is overlooked by all three parties - the service provider that launches the investment opportunity, media that cannot seem to hype enough about it and the investor who is led to believe that it's the best thing to happen to him in a long time. And that small detail that is overlooked is the risk of investing in the 'hot opportunity'.

But how does the investor go about assessing his risk appetite? If an investor can afford to lose significant amount of money on his principal before it can generate a return, then his risk appetite is high. Put bluntly, risk is the amount of money that the investor can afford to lose, in the interim, in his quest for a certain return on his investment. If an investor can afford to lose only a moderate amount of money, then his risk appetite is on the lower side.

Our grouse with the media hype over a particular investment opportunity and investor enthusiasm for the same, is that rarely, if ever, is the risk of investing in the opportunity highlighted. It's always about how rewarding the opportunity can prove to be and never about how much the investor can stand to lose (i.e. risk) if the opportunity does not quite blossom like it's meant to. In other words, the investor gets half-baked, incomplete information. As a matter of fact, in the absence of information related to risk, information isn't just incomplete, it's downright misleading.

In our view, any discussion on an investment avenue is incomplete unless it underlines the risk along with the (probable) return on it. To that end, investors must pay as much attention to the risk of investing in an asset as the return on it. While it is difficult to quantify your appetite for risk, there are ways through which you can get a fairly good idea about how much risk you can take on in your quest for a return. We have highlighted some of the key points to keep in mind while evaluating your own risk appetite:

1) Risk can be loosely defined as the money you can afford to lose in the interim period until you achieve the return you have in mind. If you can afford to see significant erosion in your investments (say upto 50 per cent of investments) in order to achieve the target return then that makes you a high risk investor. If you are the type, who can tolerate a dip in your investments only upto a certain level (say upto 10 per cent), then you are low risk investor. While the fall in the investment value (10 per cent and 50 per cent) is only indicative, we are sure you get the drift.

2) Your choice of investments must flow from your risk. If you can take a 50 per cent drop in your investments then high risk investments like technology stocks/funds or aggressively managed funds like mid cap funds could suit your appetite. If you cannot tolerate too much volatility, then you must opt for lower risk investments like balanced funds (which invest about 65 per cent of assets in equities) for instance. The idea is to make your risk appetite and not the investment opportunity, as the reference point. Most investment disasters are fashioned when investors use the investment as a reference point and then try to mould their risk appetite accordingly.

3) The risk associated with an investment has a lot to do with the investment timing. One reason why a lot of investors burn their fingers (and portfolios) with the hot investment opportunities is not because the opportunity was a dud or because the media reported it all wrong; it's mainly because by the time they invested in the opportunity, it had already run its course and had peaked. In other words, it was a bubble waiting to burst. And since all good things must come to an end, the investment opportunity soon embarks on its (sharp) decline hurting investors who came in towards the end, the most. These investors either lose a lot of money or make so little of it that it's not worth the effort (and hype).
So the next time you hear/read of the next big opportunity in the media, ask yourself a simple question -- is it possible that since this hot opportunity is yesterday's news it has already run up more than it should and if I enter in it today I may either lose money or make very little money? A lot of investors, who if they had asked themselves this question, would not have been hurt in the hot investment opportunities of yore like technology/media stocks, mid caps, real estate and gold to cite a few.

4) Another strange aspect of risk is that it decreases with time. Certain market-linked investments like equities appear very risky prima facie. While this risk is clear and present, it's important to recognise that this risk is amplified over the short-term (less than 3 years). Over the long-term, the risk of investing in equities reduces. As a prominent fund manager observed equities are the riskiest asset over the short-term and the safest asset over the long-term. That is why where equities are concerned it pays to have a really long-term investment horizon.

5) Contrary to popular expert opinion, risk appetite for equities is not '100 minus the investor's age'. So if an investor is 30 years old, it does not necessarily imply that he must have 70 per cent of assets in equities (according to the 'formula' it does). Apart from the fact that this is skewed asset allocation, the investor may just not have the risk appetite for a 70 per cent equity allocation. He could be one of those investors who cannot tolerate more than a 10 per cent drop in his investments, in which case a 70 per cent equity investment is a clear invitation to disaster. On the same lines a 60-Yr old investor may have considerable appetite for equities and may want to invest more than the 40 per cent that the formula permits him.


6) The above point does not mean that there is absolutely no link between risk appetite and age. While it may not be true in every case, investor appetite for risk does decline with an increase in age. This is because


a) as investors age, they really can't tolerate sharp dips in their investments; it upsets them and makes them nervous. And


b) at an advanced age, investors are usually most concerned about planning for retirement. Since equities can be volatile over the short-term it is advisable to shift a majority of assets from equity to debt, as the investor approaches retirement age.


This article has been sourced from the July 2007 issue of Money Simplified -- The definitive guide to Financial Planning.

23.11.07

Gusto Mo Bang Yumaman ? (Video Part 2)

21.11.07

Gusto Mo Bang Yumaman? (Video part 1)

If you have 10Million Pesos, what would you do? Let's all watch the video and learn.

14.11.07

Philhealth OWP (Overseas Workers Program)

Nakaseguro pati kalusugan ng iyong pamilya…

Kasama rin sa iyong PhilHealth coverage ang mga sumusunod:

Legal na asawa (hindi miyembro ng PhilHealth)
Mg a anak na mababa sa 21 taon gulang, walang asawa at hindi nagtatrabaho. Kasama ang illegitimate, legitimated, adopted o step children. Mga anak na 21
taon na o pataas ngunit may kapansanan (pisikal o sa pag-iisip) o congenital illness ay kasama rin.
Mga magulang 60 taon gulang o pataas na hindi miyembro ng PhilHealth. Kasama ang step parents (kung patay na ang tunay na magulang) at adoptive parents (kung may adoption papers).

Mga benepisyo sa ilalim ng OWP ng PhilHealth

Out-patient Care
Libreng check-up at routine laboratory exams and medicines na hindi lalagpas sa P500/pamilya kada isang taon sa mga accredited OPD clinics. (sa Pilipinas lamang)
Reimbursement sa day surgeries, kasama pati chemotherapy, radiotherapy at dialysis sa mga accredited free-standing dialysis clinics at ospital.

owp benefits table


Special Benefit Packages
Maternity Care Package – P4,500 para sa bawat unang dalawang normal deliveries sa mga accredited lying-in clinics at hospitals
TB-DOTS (Directly Observed Treatment Shortcourse) Package – P4,000 para sa gamutan ng pulmonary at extra pulmonary tuberculosis sa mga accredited TB-DOTS Centers. (sa Pilipinas lamang)
SARS Package na aabot sa P50,000.
Avian Influenza / Influenza Pandemic o Bird Flu na aabot sa P50,000

In-patient Care
Ang mga sumusunod ay ang iyong benepisyo sa bawat single period of confinement o serye ng confinements sa Pilipinas at abroad sanhi ng iisang sakit sa loob ng 90 araw.

Mga dapat tandaan sa pagkamit ng benepisyo

Local confinement
a.
Upang makamit kaagad ang benepisyo ng PhilHealth
bago lumabas ng ospital,isumite sa PhilHealth Section
ng ospital ang mga sumusunod:

Original PhilHealth Claim Form 1

Valid Medicare Eligibility Certificate (MEC) o Enhanced
Member Data Record (MDR), PhilHealth Premium
Payment Receipt (i.e. E-receipt, PhilHealth Official
Receipt, MI-5)

kopya ng dokumentong magpapatunay sa relasyon ng
legal na dependent sa miyembro (kung wala pa ito sa
Enhanced MDR)


b. Kung binayaran ng buo ang ospital (no PhilHealth deductions), isumite ang mga sumusunod sa Tanggapan ng PhilHealth sa loob ng 60 araw pagkalabas ng ospital upang makamit ang karampatang PhilHealth benefits:

Original PhilHealth Claim Form 1 na napunan ng
miyembro o ng kamag-anak ng miyembro

Original PhilHealth Claim Form 2

Original PhilHealth Claim Form 3 (para lamang sa
na confine sa level 1 hospital (primary) o naospital na
hindi lalagpas ng 24 oras.

Valid Medicare Eligibility Certificate (MEC) o Enhanced
Member Data Record (MDR), PhilHealth Premium
Payment Receipt (i.e. E-receipt, PhilHealth Official
Receipt, MI-5)

Original Official Receipt (OR); o kaya Waiver na galing
sa ospital na nagpapatunay na walang naibawas na
PhilHealth benefits sa kabuuang babayaran.

Hospital Operative Record (kung may ginawang surgical
procedure)

Note: Maaaring pirmahan ng tinalagang kinatawan ng miyembro ang PhilHealth Claim Form 1(mahihingi sa ospital, PhilHealth Office at maaaring mada-download sa Forms page kung ang member ay nasa abroad.

Confinement abroad
Isumite ang mga sumusunod sa Tanggapan ng PhilHealth
o sa Consular Office sa abroad sa loob ng 180 araw
pagkaraang lumabas ng ospital upang makamit ang
karampatang benepisyo:
Original PhilHealth Claim Form 1
Valid Medicare Eligibility Certificate (MEC) o Enhanced
Member Data Record (MDR), PhilHealth Premium
Payment Receipt (i.e. E-receipt, PhilHealth Official
Receipt, MI-5)
kopya ng dokumentong magpapatunay sa relasyon ng
legal na dependent sa miyembro (kung wala pa ito sa
Enhanced MDR)
Official Receipt ng binayarang bill sa ospital at duktor
Statement of account (may kaukulang singil para sa
kwarto, gamot, X-ray at iba pang laboratory examinations,
operating room at bayad sa duktor).
Medical Certificate mula sa attending physician kung
saan nakasaad ang final diagnosis, petsa ng
pagkakaospital at mga iba pang serbisyong natanggap.

Note: Nakasalin dapat sa English ang mga dokumentong nakasulat sa ibang wika.

12.11.07

Philhealth Claim Requirements for Hospitalization Abroad & Contact Detail

This email was forwarded to me by my colleague, and i decided to post it as it is useful info for fellow OFW- Overseas Filipino Workers like me.

Please be advised that Hospitalization done abroad is covered by PHILHEALTH. All you have to do is to submit the following documents for your claim:

1. Properly accomplished Claim Form 1 (available at Philhealth Office Manila)

2. Original Official Receipts

3. Medical Report

4. Operative Record/Technique if with Operation

5. Anesthesia Record

6. Copy of Member's Data Record (Philhealth)

7. Copy of Marriage Certificate (if wife/husband is claiming on behalf of OFW)

8. Statement of Account with Breakdown of Charges

Notes:

* All documents in foreign language must be translated in English.
* Filing period is 180 days from the date of discharge from the hospital.

For further information you may visit Philhealth website at www.philhealth. gov.ph or call Philhealth hot line telephone number 6373754/6379999 local 1122/1124. or Cell No. 09189635396

Contact Person

Ms. Elizabeth S. Fernandez, M.D.

Manager, Overseas Workers Program

Email: phic-owp@philhealth .gov.ph

Cell No. +63 9189635396

Or Ms. Tin-Tin

11.11.07

Personal Finance Advice from Mr. Colayco

10.11.07

Pag-IBIG Overseas Program

The Pag-IBIG Overseas Program (POP) is a voluntary savings program which aims to provide Filipino overseas contract workers ,immigrants and naturalized citizens the opportunity to save for their future and the chance to avail of a housing loan of as much as P 2,000,000.00

MEMBERSHIP

Coverage:

Membership under the Pag-IBIG Overseas Program (POP) shall be open to all Overseas Filipino Workers (OFWs) with valid visas or employment contracts. Likewise, it shall be open to Filipino immigrants and to Filipinos naturalized in other countries.

Contribution Rate:

The POP member shall contribute monthly an amount equivalent to US $5. Should a POP member decide to apply for a housing loan and which to avail of a higher loanable amount, he would be required to upgrade his membership contribution as follows:

CONTRIBUTION RATE PESO EQUIVALENTLOAN ENTITLEMENT
US $5
Up to P250,000
US$ equivalent at point of availment
P300Over P250,000-P375,000
400Over P375,000- P500,000
600Over P500,000 - P750,000
800Over P750,000 - P1,000,000
1000Over P1,000,000- P1,250,000
1,200Over P1,250,000-P1,500,000
1,400Over P1,500,000-P1,750,000
1,600Over P1,750,000-P2,000,000
The upgraded membership contribution shall be incorporated as part of the housing loan monthly amortization

Dividend Rate:

Variable dividends from surplus earnings of the Fund shall be distributed annually to all POP members, to be credited to their Total Accumulated Values (TAV).

Membership Term/Maturity:

The accumulated savings under the program may only be withdrawn at the end of five (5), ten (10), fifteen (15), or twenty (20) years at the option of the member upon membership registration. Withdrawal of contributions shall be in Philippine peso. Contributions in foreign denomination shall be converted to Philippine peso based on the prevailing US dollar exchange rate as of payment date.

LOAN AVAILMENT

POP members may avail themselves of the housing loan benefit, subject to the provisions of the existing Consolidated Guidelines of the Pag-IBIG Housing Loan Program, through their immediate family members with the execution of a Special Power of Attorney (SPA), duly certified by the Philippine embassy or consulate in the country of their workplace. They can also avail of the Multi-Purpose Loan (MPL), subject to the existing guidelines of the MPL Program


WHERE CAN MEMBERS FILE THEIR APPLICATION FOR MEMBERSHIP, WITHDRAWAL OF SAVINGS, REMIT OR PAY THEIR MONTHLY SAVINGS?

Pag-IBIG Overseas Program Office
POP Overseas Offices
Accredited Overseas Marketing Representatives
Metro Manila and Provincial Offices
Accredited Collecting Banks/Remittance Companies

WHAT DOCUMENTS TO SUBMIT TO APPLY FOR REFUND OF SAVINGS?

-Original copy of POP Passbook
-Application for Provident Benefit
-Special Power of Attorney ( if applicable)

HOW LONG IS THE PROCESSING PERIOD?

Three (3) working days

WHERE CAN I PAY?

Remittance of Contributions may be made through our accredited collecting banks:

Europe
PNB London (Savings Acct. No. 0725-219601-401)
ABC UK (UKD 2000097)

Asia Pacific
PNB HK (Savings Acct. No. 0730-475270-501)

United States of America
Oceanic Bank (Savings Acct. No. 3700143)
PNB New York (Savings Acct. No 1713)
ABC Guam (Savings Acct. No. 5000-00355-4)

Middle East
BPI - Atrium (Savings Acct. No. 3124-0221-09) Speed cash
ABC Head Office (Savings Acct. No. 1002-071759)

Canada
Bank of Nova Scotia (Savings Acct. No. 2164-10)

Remittance may also be made to any of the following banks:

RCBC (Savings Acct. No. 8000-08787-5)
PNB Makati Ave. (Savings Acct. No. 265706641-1)
LBP (Savings Acct. No. 2204-008496)
PCIB (Savings Acct. 5463-00176-8)

source: www.pagibigfund.gov.ph

Related online discussion @ Pinoy Money Talk

Applying for a Housing Loan in Pag-ibig/SSS

Pag-Ibig cuts housing loan rates


What is Forex Trading?

An overview of the Forex market


The Forex market is a non-stop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

The main enticements of currency dealing to private investors and attractions for short-term Forex trading are:

  • 24-hour trading, 5 days a week with non-stop access to global Forex dealers.
  • An enormous liquid market making it easy to trade most currencies.
  • Volatile markets offering profit opportunities.
  • Standard instruments for controlling risk exposure.
  • The ability to profit in rising or falling markets.
  • Leveraged trading with low margin requirements.
  • Many options for zero commission trading.

Forex Trading


The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Aug 26th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.

When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling. If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit. An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.

However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.

source: http://au.biz.yahoo.com/forex-education/what-is-forex-trading.html

9.11.07

Personal Finance Videos

8.11.07

WHAT ARE STOCKS? SECURITIES?

Stocks are shares of ownership in a corporation. When you become a stockholder or shareholder of a company, you become part-owner of that company. Securities, on the other hand, are proof of one's ownership or indebtedness in a company. Examples of securities are treasury bills and commercial papers, which are considered as short-term and are traded in the money market; and stocks and bonds, which are long-term and traded in the capital market. Securities are easily bought and sold in the stock market. read more....

Mutual Fund Tip: Go for consistency

Did your mutual fund holdings give you a 40 percent return last year? How about 50 percent or 60 percent? Big deal, some retail Filipino investors now say, having gone through the rough ride in the equities market in recent weeks.

Those who put their money in the country’s growing mutual fund industry have discovered that fantastic returns in short bursts are not nearly as important as consistency. Consistent returns may not be phenomenal, but they allow investors to count on a fund in both good and rough times. read more

7.11.07

Advantages in Investing in a Mutual Fund

Advantages in Investing in a Mutual Fund



Mutual funds provide a combination of benefits to investors which cannot be matched by other investment instruments. These advantages are as follows:


Professional Management

One of the main attractions of mutual funds is that it affords its investors, particularly the small ones, the services of full-time professional managers whose job is to analyze the various investment products available in the market and select those that would give the best possible returns to the fund and its shareholders.


Low Capital Requirement

Direct investments usually require substantial capital. The minimum investment amounts for Treasury Bills and commercial paper, for instance, range from Php100,000 to Php1 million depending on the bank or investment house you are dealing with. This also holds true for stocks because while an investor may be able to buy one “lot” (shares are sold in board lots of 10 to 1 million shares depending on the price at which these shares are traded) for as low as Php1,000 to Php5,000, he may not find a stockbroker who will service his account because they prefer to deal with high net worth individuals (rich people in layman's terms) or at least with people who have substantially more than just Php5,000.00 to invest. In contrast, most mutual funds in the Philippines require a minimum initial investment amount of only Php5,000.00 and minimum additional investments of Php1,000.00.


Diversification

There is a saying that goes, “Do not put all your eggs in one basket.” This adage is especially true in the world of investments which is full of uncertainties. There is no such thing as a “sure” thing. An important investment principle that requires holding several securities to reduce the risks associated with investing in individual securities is called diversification. When people invest in a mutual fund, they achieve instant diversification because the fund is usually invested in a wide array of securities.


Liquidity

Liquidity is the ability to readily convert investments into cash. Other investment products require investors to find a buyer so that he can liquidate his investment. That is not the case with mutual fund shares because the fund itself stands ready to buy back these shares at the prevailing Net Asset Value Per Share. While the law provides that redemption proceeds must be given within seven (7) banking days from the date of the redemption request, most funds are able to pay the redemption proceeds within a day. Mutual funds are, therefore, considered very liquid investments.


Safety

Safety is a very important consideration for most investors. Sometimes even more important than potential returns (well… on second thought, maybe not). Nevertheless, mutual funds are highly regulated by the Securities and Exchange Commission under the Investment Company Act and its implementing rules. They are prohibited from investing in particular investment products and engaging in certain transactions (this is discussed in greater detail in a latter section). They also have to submit regular reports to the SEC as well as to their shareholders. As mentioned earlier, all of the fund's assets must be held by a custodian bank for a safekeeping.

Potential Higher Returns

Because a mutual fund is managed as a single portfolio, it is able to take advantage of certain economies of scale. For instance, with its millions under management, it can negotiate for lower stockbrokerage fees or command higher interest rates on fixed-income investments. In the end, however, it is still the investment adviser who really makes the big difference between making direct investments and investing in mutual funds because very few individual investors can match the experience and skill of full-time professional fund managers.


Convenience

In other countries, mutual funds can be purchased directly from a funds or through a broker, financial planner, bank or insurance agent, by mail, over the phone and increasingly over the internet. The popularity of mutual funds in the Philippines is fast catching up. It may be a matter of time for this level of convenience to be a reality in the country. Funds also offer a variety of other services, including monthly or quarterly account statements, tax information, and 24-hour phone and computer access to fund and account information.


source: www.icap.com.ph

Why Invest in a Mutual Fund?

Interest rates can be volatile and passive short-term investing can erode investment values due to inflation. On the other hand, the stock market has historically outperformed both short and long-term bank deposit rates. Unfortunately, not so many people are familiar with active financial management and effective diversification. Through mutual funds, even investors with limited resources can participate in combinations of these high-yielding investment instruments without the headache of personally selecting and monitoring a portfolio. Mutual funds are ideal vehicles for growing money over time. It can be used as a savings medium for retirement, education for a child, or building up a long-term cash fund for some specific future financial objective. While largely thought of as a retail financial product, mutual funds are also ideal instruments to augment the yields generated by organizational funds and enhance their level of diversification. Mutual funds have been popular investments for pension and trust programs, other employee benefit funding objectives, and institutional asset-liability matching.

source : www.icap.com.ph

What is a Mutual Fund ?

A Mutual Fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base. The assets are then entrusted to a full time professional fund manager who develops and maintains a diversified portfolio of security investments. People who buy shares of a mutual fund are its owners or shareholders. Their purchases provide the money for a mutual fund to buy securities such as stocks and bonds. A mutual can make money from its securities investments in two ways: a security can pay dividends and interest to the fund, or a security can rise in value. The fund passes any dividends, interest or profits on the sale of its portfolio securities, less fund expenses, to shareholders in the form of distributions.

Different Funds, Different Features


In the Philippines , there are currently four basic types of mutual funds---stock (also called equity), balanced, bond and money market funds. Bond funds invest primarily in bonds such as treasury notes issued by the Philippine government and commercial papers issued by reputable companies in the Philippines . Having a full basket of only fixed-income securities, bond funds provide capital preservation while maintaining a conservative stance in terms of asset allocation. Like bond funds, money market funds also have a conservative stance since they have a full basket of fixed income funds. The main difference lies in the term of investments of money market fund investments, which is one year or less. Equity funds invest primarily in shares of stock issued by Philippine corporations. The dominance of stock issues within the portfolio positions the fund to attain a more aggressive rate of growth. Balanced funds invest in both shares of stocks and bonds, thereby accessing the growth potential of stocks tempered with the presence of secure fixed-income instruments. Professional fund managers create value for shareholders by providing superior yields within controlled risk exposures. Certainly, expective in both security selection and asset allocation go a long way in ensuring better long-term rewards for mutual fund investors.

At present, there are a total of 22 mutual funds in the country. Six (6) of these are bond funds, five (5) are equity funds, while the remaining ten (10) are balanced funds while one is a money market fund.

source: http://www.icap.com.ph