What are the different kinds of mutual funds?
Depending on the investment objectives, professional managers buy, hold and sell assets in equities, fixed-interest instruments like bonds, and money-market deposits. In the Philippines, mutual funds fall under the following: a) Equity fund. This fund is largely placed in stock market and has wide fluctuations. Nonetheless, in the long run, say, 5-10 years, equity funds tend to perform better than fixed income funds. b) Index fund. This fund consists of several stocks in the same proportion as that of the index the fund tracks (e.g., PSE Composite index), and has less risk than the equity fund. c) Balanced fund. This makes investment in a balanced portfolio of stocks and fixed income securities. It both has the earning power of stocks and the stability and income of bonds. d) Bond fund. This describes a type of investment company that primarily invests in long-term bonds and other types of debt securities. Earnings do not fluctuate as much as the other types of funds. e) Money market f
