Here in the Philippines, there are very few and historically, have consistently beaten the local market (and therefore, the that benchmark on it).

I often read that one should stay away from since 75% of the time, actively managed funds do not beat the market so you’re better off buying an index (with fewer costs). The situation is different here though, like I mentioned.

Given that scenario, am I justified in putting my in since it helps me keep diversified and they consistently beat our local market (some MFs beat it by a large margin)?

Is this reasonable thinking? :?

 

  • Stock Trading Warrior 5:03 pm on April 18, 2010

    Hi Ava-

    Yes, it sounds like a good plan. The thing many people forget is that you can still buy and sell shares of mutual funds. If a fund is not performing for you and there’s one that you think will do better given your time frame, then sell it and replace it with the new one. You can easily watch MF’s performance quarterly.

    I do think it’s true that mutual fund performance is lacking even though the theory of diversifying is sound. I also know that many people sort of ignore mutual fund portfolios because they think the fund managers are handling the risk. A person is still responsible for their money.

    It also sounds like you have a good amount of knowledge and can do very well by just being involved and aware of what the funds are doing for you.

    Best of luck!

  • doofuss 5:03 pm on April 18, 2010

    Yes. I think it’s a good idea. Try to find a No-Load fund (You pay no commissions when you invest in it or when you sell it) And try to find ones that invest in high quality growth stocks or value stocks. Investigate before you invest. It’s a great way to diversify.
    Invest as much as you can each month. It’s called "Dollar averaging" Also, be patient, and be disciplined.
    I would expect that you can find some of these in the Vanguard family of funds, or in the T.Rowe Price family. There are many others as well. You can find them online or in the Reference Dept at your local library in Morningstar. All of these should be available in the Philippines.
    I wish you the best.

  • zygote222 5:03 pm on April 18, 2010

    It would be helpful to know which mutual funds you are referring to. Your knowledge of the Philippine stock market is undoubtedly superior to mine, so I hesitate to question your statement that actively managed mutual funds "have consistently beaten the local market". Still, looking at the funds listed in the following link, there seems to be some question about how consistent this superior performance really is. I see that the Philequity PSE Index Fund has the best five year return of any of the funds listed, although some of the alternatives have managed to beat it over shorter time periods.

    So, unless you know of additional Philippine stock mutual funds with even better records, I would say that your choices are quite similar to investments elsewhere. You could pick an index fund that seems to be about as good as the alternatives, or try an actively managed fund with a good long term performance, hoping to outperform the market, but knowing that you may very well underperform in the next five or ten years.

  • samantha griffin 5:03 pm on April 18, 2010

    I know an investment piece you might be interested to invest in, particularly in Boracay Island, the best tourist beach destination in the Philippines.

    The investment piece in the island bares the following proposal summarized into three:

    1. Own a Crown Regency Hotel room in Boracay;
    2. Earn millions through your invested room; and
    3. Enjoy a total of 52-free room night stays in any Crown Regency Hotel in the Philippines and around the world in more than 2,000 hotels and resorts affiliate around the world.

    If you have further questions and clarifications, please don’t hesitate to mail me at: apriljoy.fuentetriangle@gmail.com / esperonapriljoy@yahoo.com