FREQUENTLY ASKED QUESTIONS ON MUTUAL FUNDS

Usual questions asked when I discuss mutual funds to beginners.

Q: Can I lose money in Mutual Fund?
A: Yes, depending on market conditions. However, the fund manager’s job is to minimize risk and losses for the shareholders.

Q: How much interest do I get as an investor?
A: Mutual funds do not give fixed and guaranteed returns. Returns are based on the difference of your buying price and current net asset value per share (NAVPS). Market conditions play a major role  in determining the annual returns of mutual funds.

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.

Q: Are there any charges if I invest in mutual funds?
A: Charges in mutual funds vary from company to company. In Sun Life, you can actually choose from 2 charging methods, Front End or Back End, whichever is applicable to you.

Front End charging – your total investment will be deducted by 2% upon deposit. The remaining amount will be the basis of your investment. The advantage of this option is then whenever you plan to withdraw, there will be no more exit fees.

Front End (A)
Sales Load Rate (Excluding VAT)
PESO FUNDS
Less than P100k 2.00%
P100k to less than P1M 1.50%
P1M to less than P5M 1.00%
P5M and up 0.50%
DOLLAR FUNDS
Less than $2k 2.00%
$2k to less than $20k 1.50%
$20k to less than $100k 1.00%
$100k and up 0.50%

Back End charging – your total investment will be deposited and invested as is, no charges. However, the charges are determined depending on the length of investment.

Back-End (B)
Redemption on BACK-END Load Rate(Excluding VAT
1st year 5.0%
2nd year 4.0%
3rd year 3.0%
4th year 2.0%
5th year 1.0%
Beyond 5 years None

 

Q: Can I open a Joint Account like in banks?
A: Yes, Joint Accounts are allowed also in Mutual Funds.

In case you have more questions, feel free to comment below or send your questions in our Contact Us page.

Garry De Castro

Garry De Castro is a personal finance advocate, Financial Advisor, Certified Investment Solicitor (Mutual Fund Representative), investor, stock market trader, blogger, and IT practitioner. He started sharing and writing financial articles 2008 just to share his financial learnings to friends, relatives and anyone who wishes to be financially independent.

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