Types of Mutual Fund

• 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.
• 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 growthpotential 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.