What mutual fund types of investments should you invest in?
There are several types of mutual funds under FAMI management, that cater to different financial goals and risk appetites. To decide what type of mutual fund you should invest in, you have to first decide what you will use the money for, and when you might need to use it, and how much risk you are willing to take.
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Remember this: all investments of any kind – whether real estate, insurance, pre-need, mutual funds, or even time deposits or government securities — have some kind of risk. In some cases, there is a chance that you may not get the kind of returns that you were hoping for. In other cases, there is a chance that you may not even get some or all of your original investment back. However, the chances of these kinds of things happening depend on several factors.
You can be conservative or ambitious in your investments, depending on whether you have a small or large “appetite” for risk. Usually, the higher the risk, the higher is the expected return on investment; this kind is attractive to ambitious and aggressive investors. Or, stated the other way, if you are conservative and you don’t want too much risk, then you shouldn’t expect a very large return. How aggressive or conservative your investment should be depending on what your financial goals and timing are.
If you are a conservative investor, you don’t want to take too much risk. The most prudent choice will be the Save and Learn Fixed-Income Fund (SALFIF).
However, if you have ambitious financial goals, but you have plenty of time to wait, you may choose either of the two types:
1. the Save and Learn Balanced Fund (SALBF) — if you have between 2 to 5 years before needing the funds; or
2. the Save and Learn Equity Fund (SALEF) — if you will not need the funds for at least 5 years.
SAVE & LEARN MUTUAL FUNDS
As of June, 2009, FAMI manages four mutual funds:
SAVE & LEARN EQUITY FUND (SALEF) – This is an actively managed portfolio of selected stocks with strong balance sheets and attractive valuations. Its goal is to provide growth through long-term capital appreciation. It is an ideal investment for investors seeking high growth with high risk. For more details, download the SALEF PROSPECTUS.
First Metro Save & Learn Equity Fund is an open-end investment company, which was incorporated on May 27, 2005 and subsequently registered under R.A. 2629 on September 6, 2005. It is principally engaged in the sale of its shares of stock and in the investment of the proceeds from these sales into a portfolio of quality, high grade equity securities. The Fund’s main objective is to provide small investors with the opportunity to access the capital markets and enable them to reap satisfactory returns on their investments through prudent selection of equity securities, and the professional management and supervision of the Fund.
Capitalization and Ownership
The Fund’s authorized capital stock is ONE BILLION (1,000,000,000) common shares with a par value of Php1.00 per share. Seven Hundred Fifty Million (750,000,000) shares of which represent the recent increase in the authorized capital stock and the same are being registered with the Securities and Exchange Commission.
SAVE & LEARN FIXED INCOME FUND (SALFIF) – A mutual fund invested in a well-managed portfolio of selected high grade fixed income generating instruments, such as bonds, commercial papers, and other money market instruments. Its goal is to provide as high a level of income as is consistent with preservation of capital and liquity. This is best suited for those who desire low to moderate income growth with low risk. For more details, download the SALFIF PROSPECTUS.
First Metro Save & Learn Fixed-Income Fund is an open-end investment company, which was incorporated on June 3, 2005 and subsequently registered under R.A. 2629 on September 6, 2005. It is principally engaged in the sale of its shares of stock and in the investment of the proceeds from these sales into a portfolio of quality fixed-income instruments. The Fund’s main objective is to provide small investors with the opportunity to access the capital markets and enable them to reap modest but satisfactory returns on their investments through the prudent selection of securities, and the professional management and supervision of the Fund.
Capitalization and Ownership
The Fund’s authorized capital is TWO HUNDRED MILLION PESOS (Php200,000,000.00), composed of Two Hundred Million (200,000,000) unclassified common shares with a par value of Php1.00 per share.
SAVE & LEARN BALANCED FUND (SALBF) - A mutual fund invested in a mix of fixed-income securities and stocks. Its goal is to provide total return consisting of as high a level of current income as is consistent with preservation of capital, liquidity and long-term capital appreciation. It is ideal for those who desire moderate growth and willing to assume moderate-to- high risk. For more details, download the SALBAF PROSPECTUS.
First Metro Save and Learn Balanced Fund, Inc. is an open-end investment company, which was incorporated on 29 January, 2007. It is principally engaged in the sale of its shares of stock and in the investment of the proceeds from these sales into a portfolio of quality, high grade equity securities and fixed income instruments. The Fund’s investment objective is classified as moderate. One of the bjectives of the Fund is to provide small investors with the opportunity to access the capital markets and enable them to reap satisfactory returns on their investments through prudent selection of equity and fixed income securities, and the professional management and supervision of the Fund.
Capitalization and Ownership
The Fund’s authorized capital is ONE HUNDRED MILLION PESOS (Php100,000,000.00), composed of One Hundred Million (100,000,000) unclassified common shares with a par value of Php1.00 per share.
SAVE & LEARN MONEY MARKET FUND (SALMF) – A mutual fund classified as low risk. Its goal isto provide good return through current income by investing in fixed income instruments and securities with short term investment period such as government securities, time deposits, short-term deposit agreements, among others. For more details, download the SALMF PROSPECTUS.
First Metro Save & Learn Money Market Fund, Inc. is an open-end investment company incorporated on November 4, 2008 with SEC Registration No. CS200817356. It is principally engaged in the sale of its shares of stock and in the investment of the proceeds from these sales into a portfolio of short-term (less than one year) fixed income securities and instruments. The Fund’s investment objective is classified as low risk. While the Fund aims to provide good returns, various risk factors (Please see discussions on “Risk Factors”) can affect the market value of the assets of the Fund and cause the Fund’s net asset value to vary.
Capitalization and Ownership
The Fund’s authorized capital is TWENTY MILLION PESOS (Php20,000,000.00), composed of Two Hundred Million (200,000,000) unclassified common shares with a par value of Php0.10 per share.
While the Fund aims to provide total returns consisting of current income and capital appreciation, various risk factors (such as stock market risk, interest rate risk, credit risk, inflation risk, manager risk) can affect the market value of the assets of the Fund and cause the Fund’s net asset value to vary.
To manage stock market risk, the stocks included in the portfolio will be cautiously selected based on their soundness and long-term profitability. Diversification of the stockholdings (not only in terms of the number of stocks but also in the different sectors and industries) of the portfolio will be also done to reduce this risk.
On interest rate and inflation risks, the Fund manager will diversify in terms of the type of fixed income securities and time horizons of the said securities.
To manage default risk, SEC-registered and investment grade fixed-income securities will be selected.
On management risk, the issuer’s board of directors will see to it that all investment policies and restrictions mentioned in this prospectus are strictly followed. The board will meet more often to continually monitor the investment manager’s performance in this area.
To minimize losses, an investor should undertake his or her own research and study on the trading of securities before commencing any trading activity. He/she may request information on the securities and issuer thereof from the Commission which are available to the public.
And an investor should seek professional advice if he or she is uncertain of, or has not understood any aspect of the securities to invest in or the nature of risk involved in trading of securities especially those high risk securities.
Source: First Metro Asset Management Inc.