Stock Market, Mutual Funds and Exchange-Traded Funds 101: Common Strategies

​At first, they will ask why you're doing it. Later they'll ask how you did it.

If you don't sacrifice for what you want, what you want becomes the sacrifice.

What is a Mutual Fund?

• Affordable investment
• Pooled fund
• Invested in a basket of securities
• Professional-managed
• Instant diversification

What Are The Types of Mutual Funds? 

• Equity Funds
• Equity Index Funds
• Bond Funds
• Balanced Funds
• Money Market Funds

Like riding a luxury bus​

Affordable, Convenient, Professionally-managed

Limitations
​

• Priced only once a day
• Trade is executed only once a day
• Subject to a minimum holding period

​​​How Do Mutual Funds Work?

Easiest Way To Invest In Exchange-Traded Funds

What is an Exchange-Traded Funds (ETFs)?

A type of pooled fund investment security that operates much like a mutual fund that can be traded in a stock exchange.​ According to Investopedia, it is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, ETF trades like a common stock on a stock exchange.​

Combines The Best Of Two Worlds
​

• Mutual Fund
• Listed Stock​

ETFs versus Mutual Funds

Mutual Fund

• Priced only once a day
• Trade is executed only once a day
• Subject to a minimum holding period

Exchange-Traded Fund

• Priced continuously
• Intraday trading
• No minimum holding period

First And Only ETF In The Country.

• Managed by First Metro Asset Management
• Listed in the Philippine Stock Exchange
• Managed to mirror the performance of the PSE Index

Easy On The Pocket

Gain instant access to 30 blue-chip companies in the Philippines with less than Php 1,300.​

Easy To Understand

Simply managed to mimic the performance of the Philippine Stock Exchange Index.​

No Surprises

• No surprises in the companies it holds
• No surprises in the strategy
• No surprises in the performance

Easy To Trade

• Trade using any stock broker
• Trade as many times as you want during the day
• No minimum holding period
• Trade anytime, anywhere using any device
• Minimum investment amount is the price of price of 1 board lot or 10 shares

​Lowest Management Fee Among Peso Equity Mutual Funds

Among Best Performing Peso Equity Fund In The Last 3 Years

Common Strategies

Buy And Hold

​Invest a large lump sum then hold for a long period.

Pros

• Easy to implement
• Fewer headaches

Cons

• Long-term commitment
• Uncertainty about the future
• Not everyone has a large lump sum to invest now

Peso-Cost Averaging Strategy

Buy the same value at regular intervals regardless of market condition.​

Pros

• Build wealth slowly over time with small amounts

Cons

• It won't make you a lot of money quickly

Market Timing Strategy

Buy low, sell high by predicting the movement of the market.​

Pros

• Make money quickly if you can accurately predict the direction of the market

Cons

• Need to learn technical analysis​

Value Investing Strategy

Buy ETF if market is undervalued and sell at a profit.​

Pros

• Based on solid research

Cons

• Cheap market can get cheaper in a down trending market
• Valuation is subjective

Cash Equitization
​
Avoid risk of underperformance due to cash drag by staying invested in the market through the ETF.​

Core-Satellite Strategy

Combine the benefits of active and passive portfolio management.​