A Guide To Fami Mutual Funds Investment

First Metro Asset Management, Inc. (FAMI) is a trusted and top-performing mutual fund in the Philippines. FAMI offers a range of mutual fund products catering to different client risk appetites and investment goals. With FAMI, you can start investing with as little as Php 5000.

A mutual fund is a pool of money that is professionally managed and invested in specific types of securities. Investing in mutual funds means entrusting your money to a Fund Manager who will make trading decisions on your behalf. This investment vehicle is ideal for beginners and busy investors as it does not require a large sum of money and is suitable for those who don't have the time to manage their own investments.

FAMI offers various mutual fund products, including the Save and Learn F.O.C.C.U.S. Dynamic Fund, the First Metro Exchange-Traded Fund, and the Save and Learn Philippine Index Fund, among others. These funds cater to different investor needs, whether you are looking for maximum growth in the long run or are comfortable with short-term volatilities.

If you're thinking about investing in FAMI mutual funds, it's important to do your research and understand the different funds available, their risks, and your investment goals.

Investment goals

When it comes to investing in FAMI mutual funds, it's important to consider your investment goals. These goals can be short-term, such as saving for travel, home renovation, or buying a car, or long-term, such as retirement planning and paying off debts. Setting clear and specific investment goals is crucial for making informed investment decisions and choosing the right mutual fund to help you achieve your financial objectives.

At First Metro Asset Management, Inc. (FAMI), we understand that everyone's investment goals are unique. That's why we offer a diverse range of mutual fund products to cater to different investor profiles. We can help you select the most appropriate investment option based on your risk appetite and time horizon.

If you're an investor with a low tolerance for risk, perhaps someone who is nearing retirement or already retired, we recommend considering our Save and Learn Money Market Fund or the Save and Learn Fixed Income Fund. These funds offer stable capital preservation and steady growth with minimal risk, making them suitable for those seeking more conservative investment options.

On the other hand, if you're an aggressive investor with a high-risk appetite and a long investment horizon, our Save and Learn Equity Fund or the First Metro Exchange-Traded Fund may align better with your investment goals. These funds are designed for those aiming for early retirement, wealth accumulation, or securing their child's education.

Additionally, FAMI offers the Save and Learn Balanced Fund, which provides a combination of shares of stocks and debt instruments, making it a suitable option for those seeking both capital appreciation and stable income.

No matter what your investment goals are, FAMI has a mutual fund that can help you achieve them. Our team of fund managers is dedicated to helping you attain your financial aspirations and providing you with the security and freedom you need for the future.

Risk tolerance

There are three categories of risk tolerance: conservative, moderate, and aggressive. Investors who are conservative are only willing to accept a small amount of risk in their investment portfolios and therefore opt for highly liquid and short-term mutual funds that offer steady growth with minimal risk.

Moderate investors have a medium level of risk tolerance. They are comfortable accepting a slightly higher degree of risk in exchange for potentially higher returns compared to conservative investors.

Aggressive investors are open to more risk and are unbothered by sudden changes in the fund's performance. They are willing to take on more risk for the potential of maximum long-term returns.

It is important to note that your risk tolerance may change over time as your age, income, and financial goals evolve. Generally, younger investors can take on more risk due to their longer investment horizon, while older investors tend to have lower risk tolerance as they have more financial responsibilities and needs.

When investing in FAMI mutual funds, it is crucial to assess your risk appetite and choose funds that align with your tolerance for risk. FAMI offers a range of mutual fund products catering to different risk tolerances and investment goals, ensuring that investors can make informed choices based on their financial situations and preferences.

Investment horizon

When considering investing in FAMI mutual funds, it is important to determine your investment horizon, which refers to the length of time you are willing to stay invested. This is a crucial factor in choosing the right mutual fund for your financial goals.

Young people are generally considered to have longer investment horizons, as they have more years to keep their money invested and benefit from compound interest. Those with a longer time frame for their investments are often more comfortable taking on higher-risk investments, as they can weather market volatility and focus on long-term gains. On the other hand, investors with short-term horizons tend to avoid riskier investments to avoid incurring losses, even if it means sacrificing potentially higher returns.

When determining your investment horizon, ask yourself how long you are prepared to have your money invested. Are you thinking in terms of one year, five years, or even 10 years? This will help guide your decision-making process when selecting a FAMI mutual fund that aligns with your financial goals and risk tolerance.

FAMI offers a range of mutual fund options catering to different investment horizons. For those with a shorter investment horizon, the Save and Learn Money Market Fund offers a steady and stable option with a focus on short-term debt instruments. Meanwhile, for investors with a longer horizon, the Save and Learn Equity Fund provides an opportunity to build wealth over time, and the Save and Learn Fixed Income Fund offers stable capital preservation.

It is important to carefully consider your investment horizon and choose FAMI mutual funds that match your timeline and financial objectives. This will ensure that your investments are well-aligned with your short-term and long-term goals, helping you make more informed and strategic financial decisions.

Types of mutual funds

There are several types of mutual funds, each with its own investment focus and strategy. Here are the four main types:

• Money Market Funds: These funds invest in short-term debt instruments and cash equivalents, such as U.S. Treasury bills and certificates of deposit (CDs). They are considered low-risk investments, and the returns are typically higher than those of a regular savings account. Money market funds are often used as a temporary holding place for cash that will be invested elsewhere in the future or set aside as an emergency fund.
• Bond Funds: This type of fund invests in long-term debt instruments, such as government or corporate bonds. Bond funds typically aim for higher returns than money market funds, but this also comes with higher risks. The returns on bond funds can vary significantly depending on the specific types of bonds they invest in and the changing interest rates.
• Stock/Equity Funds: Stock funds, as the name suggests, invest primarily in corporate stocks. There are various types of stock funds, including growth funds, which focus on stocks with high financial gains potential, and income funds, which invest in stocks that pay regular dividends. Stock funds can also be categorized by the size of the companies they invest in, such as small-, mid-, or large-cap companies.
• Index Funds: These funds aim to replicate the performance of a specific market index, such as the S&P 500. Index funds use a passive investment strategy, meaning they aim to mirror the holdings and performance of a particular index. This type of fund offers a low-cost, tax-efficient way to invest and typically has lower fees than actively managed funds.

In addition to these four main types, there are also other varieties of mutual funds, such as:

• Balanced Funds: These funds invest in a combination of stocks, bonds, and other securities to achieve a balanced portfolio.
• Target-Date Funds: These funds automatically adjust their asset allocation over time, becoming more conservative as the target date, usually retirement, approaches.
• Sector and Theme Funds: These funds focus on specific sectors or themes, such as technology or healthcare, and invest in companies within those areas.
• Socially Responsible or Ethical Funds: These funds only invest in companies and sectors that meet certain criteria, such as environmental or social responsibility.

Advantages of mutual funds

Mutual funds are a great way to invest your money, offering a wide range of benefits for investors. Here are some of the key advantages of investing in mutual funds:

Professional Management

Mutual funds are professionally managed, allowing investors to leverage the expertise of fund managers who make investment decisions on their behalf. These fund managers have extensive knowledge and research the market conditions, individual companies, and specific securities to maximise the growth of the fund. This is especially beneficial for beginners and busy investors who may not have the time or expertise to manage their own investments.

Diversification

Mutual funds provide access to a wide variety of investments, allowing investors to diversify their portfolios without having to select individual stocks or bonds. By investing in a range of asset classes, industries, and sectors, mutual funds reduce the risk of loss and maximise the potential for returns.

Low Minimum Investments and Liquidity

Mutual funds typically have low minimum investment requirements, allowing investors to start with a small amount of money and invest regularly. They are also highly liquid, meaning investors can withdraw their money at any time with minimal fees, providing flexibility and accessibility.

Convenience

Investing in mutual funds is relatively simple and convenient. They can be purchased directly through investment firms, financial advisors, or retirement accounts, and often through payroll deductions. Mutual funds are also easy to understand, with a straightforward process for buying and selling.

Potential for Higher Returns

Mutual funds can provide the opportunity for higher returns compared to typical savings accounts. They can also take advantage of economies of scale, negotiating lower fees and commanding higher interest rates, ultimately benefiting the investors.

These advantages make mutual funds a popular choice for investors, especially those seeking a long-term investment strategy to achieve their financial goals.

Frequently asked questions