Mutual Funds

The Basic idea of a Mutual Fund is to have a group of professionals working to handle your investments. These Fund Managers are to combine together their customers money and use it to invest into Stocks which are too expensive for normal people. And they are able to monitor the Stocks full time and make purchases or sales during trade days.

Mutual funds are useful to those who are too busy to monitor stock progresses during the day or week, those who lack funds to purchase high valued stocks directly, those who are not savvy in choosing which stocks to buy and those who aren’t able to control their gambling habits in stocks.

Another group of people who gets Mutual Funds are those who would like to use this vehicle as a means of Retirement planning.

Types of Fund

In general there are 2 types of Fund. High risk funds and Low risk funds.

High risk funds are invested into Equities and stocks. They offer higher opportunities of gain but susceptible to fluctuations of Equity markets.

Low risk ones, invest heavier into bonds. This can be company bonds or government bonds. The risk will be lower and the gains will not be as high. But it offers comfort to those who intend to use this Fund for retirement purpose.

Choosing a Fund Manager/Company

When choosing a Fund company or manager, it is always wise to ask around. Find out from friends or family members if they have any experiences with Fund managers past performances, any recommended ones. Beware of companies who engages part-time agents, promising high commission and rewards for selling their Funds to others. My concern is this. When the Fund manager has made money from my money which is invested, they will be using the gains to take care of those part-time agents. So can I say that the profit from investment, which is high, has to be now declared lower because the cost of rewarding the agents has to be absorbed somewhere? Therefore look for a Fund Manager who hires full-time staff, who trains them and has every intention of making their company a long term one.

If possible also choose a Fund that allows you to pay a certain percentage for entry fee (ranging from 2% - 4%) upon purchasing of units. Subsequently when you sell your Units later, you won’t have to pay any duty fee anymore. You can identify this sort of Funds when you see that the Buy/Sell price is the same. This is helpful when you use Funds for retirement planning.

Some Fund managers also allows you to switch between Low risk funds to High risk funds, vice versa, without having to pay for entry fee or the Buy/Sell differences.

I would like to recommend that you check out this Fund Manager ( I have been investing with them for 10 years now with proven record and have attain Awards for 3 consequtive years for their Avenue TacticalEXTRA fund. Some of the criterias of Fund Managers that I have suggested is based on my experiences with Avenue.

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