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Published November 16, 2018

Are you interested in growing your hard-earned money through investing in mutual funds? In this article let’s tackle how it works, how you can make money and 5 easy steps to invest in mutual funds Philippines.

What is a Mutual Fund?

To start, let us first define what mutual funds are. It is a company where it pools funds from different investors. The funds inside the mutual fund company are then managed by professional fund managers where they will be the one who will invest your money in diversified portfolio (such as investing it in the stock market and/or corporate & government bonds).

Defining it simply: 

“It is vehicle where an ordinary person is able to invest money where the wealthy people are also investing.”

Investing in Mutual Funds in the Philippines

Think of it this way..

..if you put your money in the bank, have you ever asked yourself:

“Where does the bank put our money?”

Surely, it is not only stored in the vault!

It is reinvested in the form of credit (bank loans) or invested in financial instruments like the stock market or mutual funds.


You are earning less than 1% interest per year (money sleeping in the banks), but they are re-investing your money earning more than 10% through credit or investments.

No wonder the rich gets richer and the poor poorer, because they know where to put their money. That’s why I am a personal finance advocate because in the information age it is no longer an excuse NOT to know the secret of the wealthy.

How does mutual funds work?

1. Mutual fund is about ownership

When you invest in mutual funds, you own shares in proportion to your investments. When the mutual fund companies earn due to their investments, you receive proportionate share of any earnings on the investments of the funds.

So if the MF company earns 12%, you also earn 12%. (Unlike the banks who just give you 1% interest) So yes, you are a part-owner.

By the way, I am NOT against banks. It’s just they also have their own different purpose (more on this on another article).

2. Mutual fund is about accumulation of shares

Have you heard the word “shareholder”?

Yes. It’s because when you invest in mutual funds, you will receive number of shares directly related with the invested amount.


A mutual fund having a price per share of P1.00.

Then if you have P100,000 you can buy 100,000 shares of the mutual funds.

  • Just like buying rice, the price is per kilo.
  • For gasoline, the price is per liter.
  • And for mutual funds, the price is per share.

3. Mutual fund is about investing for the long-term.

And lastly, investing in mutual funds should be long-term. As the longer you stay invested, the higher the growth in value your investments will be.


Philequity Fund, Inc. (one of the top mutual funds Philippines)

The price per share last November 23, 2010 is: 19.8651 pesos per share
As of Oct. 26, 2018: 35.3262 pesos per share

If you invested P100,000 years ago:

Your P100K would now be P177,830.324.

That’s 77.83% growth in 8 years.
Or 15.57% per year growth!

How powerful is that!?

5 Easy Steps in Investing in Mutual Funds Philippines

So now, how does one start investing in the mutual funds Philippines? In my online course: Mutual Funds Mastery, we will go deep with each step. For now, here are 5 easy steps to get started:

Step 1: Know yourself

The first question you need to answer before investing in mutual funds is:

“What are your financial goals?” 

What’s the reason why you want to invest in mutual funds?

  • Is it for retirement?
  • Kid’s college education?
  • Pension?
  • Dream car?
  • Vacation?

After knowing your goals, how long do you need the money? Is it long-term? Short-term?

Knowing these details is important because we don’t just blindly invest in mutual funds. We need to match the right mutual fund type to our financial goals.

Step 2: Choose your Fund

Thus, the next step should be to choose the appropriate type. There are many types of mutual funds and here are the three common ones:

  1. Equity Fund
  2. Balanced Fund
  3. Bond Fund

Each type of fund has a different mix of portfolio. Majority of the funds in Equity Funds are invested in stocks, while majority of the funds in Bond Fund are invested in corporate bonds and government securities.

These types of funds cater to high-risk investors (Equity), moderate-risk investors (Balanced Fund) and low-risk investors (Bond Funds).

That’s why it is important to know yourself first, and then match the right type of mutual funds depending on your needs.

Step 3: Fill up forms and Submit

Once you are able to choose the right type of mutual funds for your needs, you then need to fill out the necessary forms.

Each type and company has different requirements. You just need to look over their respective websites and download their required forms. But here are the most common forms needed specifically in mutual funds Philippines:

  1. Customer Information Sheet (basic details)
  2. Investor Risk Profile Questionnaire (this will determine if you are a high, moderate or low-risk investor)
  3. Foreign Account Tax Compliance Act (FATCA) Form (For US residents tax requirement)
  4. Signature Cards
  5. Attach two photo-bearing valid IDs (at least 1 government issued IDs) with three specimen signatures for verification.

After filling out the necessary forms, you will then need to submit original copies to authorized receiving personnel and offices.

Step 4: Fund your Account

Once your account is verified, you can then fund your account. Or if you are confident that all your requirements are complete, you can directly deposit your investment amount and submit your proof of payment together with your filled-out forms and requirements.

To fund your account, each mutual fund has their own bank account details and you can directly deposit it through over-the-counter or through funds transfer. You can also fund by writing a check to the designated mutual funds account.

Warning: Make sure you deposit your funds or write a check directly to the mutual funds company. Never deposit your account to a person (whether friend or a so-called financial adviser) to avoid unnecessary investment scams. 

Step 5: Top-up Investment

Once all the steps above are completed and verified, you will receive a confirmation notice of investment. This is important as to know whether all documents and investments are acknowledge before you start adding funds in your investment accounts.

Once you receive a confirmation notice, you can now start adding or topping up your mutual funds investment. There are two common ways to do it:

  • Manual Investing
  • Automatic Investing

Manual investing means you add on demand while automatic investing you can schedule all your investment transactions ahead of time. This can be done through online banking or pre-scheduled check payments.

And that’s it!

That’s how you can specifically invest in mutual funds Philippines and start letting your money work for you.

Other articles you might also like:

PS: Do you want an in-depth and complete mutual funds investing training? Then discover how you can retire early, travel the world (for fun NOT for work) and spend quality time with your family before reaching age 60 by letting your money work for you through Mutual Funds Philippines –>

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