Interesting Facts on Mutual Fund in the Philippines – Frequently Asked Questions

Last night, I attended a seminar meeting in one of the online stock trading accounts that I have. And interestingly, they also have mutual funds offering. What caught my eye is the Frequently Asked Questions on Mutual Fund in the Philippines that they have on their primer. It’s very educational so I thought a lot of you will benefit from these Interesting Facts on Mutual Funds in the Philippines.

Q: Can I lose money in mutual fund?

A: Yes, depending on market conditions. The fund manager’s job is ultimately to minimize risk and losses for the shareholder.

Q: How much interest do I get as an Investor?

A: Mutual funds do not give fixed returns. Returns are based on the difference between your buying price and the current net asset value per share (NAVPS). Market conditions play a major role in determining the annual returns of mutual funds.

Q: What happens to my investment if I die?

A: Your shares in the mutual fund will form part of your estate and will be distributed to your heirs (usually surviving spouse and children) accordingly. There are tax issues involved in this regard

– This is one of the disadvantage of having fully invested but do not have any life protection (insurance). In life insurance, it’s tax free unlike this one, you have to pay the estate tax first before the funds are released.

Here’s one of my favorite feature of mutual funds.

Q: Are mutual fund gains taxable?

A: NO. Mutual fund gains are exempted from taxes based on the Comprehensive Tax Reform Program (CTRP). This was done to promote long-term savings in the country.

– One great advantage of mutual fund vs. time deposits and stocks investments. TAX FREE.

Q: How long is the maturity period?

A: Mutual funds do not have maturity periods which means that the shareholders can actually sell their shares in any banking day. Furthermore, mutual funds are required by law to buy back the shares from the shareholders and to release the proceeds of any sale within seven (7) banking days.

– These may not be on familiar grounds as we’ve talked about physical gold investments.

Checking back on the stocks seminar that I attended – they showed a chart or more like a graph of Gold and Commodities. Based on the chart, it has a more steady upward trend so it kinda make me curious how does one buy gold? Until I got this gold IRA where it shows the historical figures of gold.

And guess what, even pension plans are now invested in gold in this gold 401k. Altho these facts are not applicable here in the Philippines but only in the US and other countries. Maybe after reading this entry, some will be able to think of offering the same product here in the Phils.

Another interesting fact about this 401k gold is that it can be transferred or rolled over gain so that the earnings will then be part of the principal. Given the chance, I’d also like to invest in gold investments so then whenever any of my clients will ask, I can easily and proudly say that ‘ Yes, I got accounts with them’. Cool isn’t it?

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Garry Zaldy de Castro is an advocate, Financial Advisor, Certified Investment Solicitor (Mutual Fund Representative), blogger, IT practitioner, husband to Aileen and a dad to Jacob and JohnD. He started Financial Planning Philippines in 2008 just to share his financial learning to friends, relatives and anyone who wishes to be financially independent.

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