Yesterday, I posted a blog on the best performing mutual funds in the last 3 years. The performance of the funds in the last 3 years had been stellar because of the good performance of the markets.

Mutual funds, like any other pooled fund are not guaranteed and would most likely reflect how the markets are performing. Due to the credit crisis of 2008, the markets took a heavy beating in the years 2008 and 2009 before seeing some recovery. If you invested in mutual funds (or UITF, VUL) in those years and pulled out your money, you would have lost a significant amount of your investment. However, had you kept your money in the funds, you would have recovered the losses and actually still see good yields.

Again, let me reiterate that yields are not your only criteria when choosing an investment as I mentioned in my blog yesterday. But, it would be good to see how the funds are doing and how they fare against each other right?

There are dozens of Mutual Funds available in the country and it can be confusing to chose from them. It’s a good thing that the Philippine Investment Funds Association (PIFA) lists the performances of their member companies.

Mutual Funds are great investment instruments for people who are looking for better returns. Mutual funds are long term instruments and are marked to market funds so volatility is to be expected when investing in the said funds. Further, Mutual Funds are not guaranteed. However, performance of the Mutual Funds are expected to outperform inflation rates in the long run, or at least in theory.

I’ve compiled the performances of the top 5 Mutual Funds using their 3 year return parameters. When investing in a Mutual Funds, there are many things to consider other than performance. I’d pay close attention to fee structures as one company differs from another. Other concerns should be investment track record, experience of fund manager, shareholder servicing, among others. In my experience, after sales servicing is a big must and not all Mutual Fund providers give the same effort in servicing.

Be careful on just looking at yields. Aggressive fund managers will have better performance during a bullish market but will have also have performed worse during a down turn.

Investing in a Mutual Fund is a good idea for long-term investors as one can benefit from professional fund management & diversification. Minimum investment amounts for Mutual Funds are also a big plus as most funds only require P5,000 minimum placements.

The Securities & Exchange Commission (SEC) is the government regulatory body that oversees Mutual Fund Companies.

Returns are Compounded Annual Growth Rates (CAGR), those are annual returns.