How much do you need to Invest in Mutual Fund?

One major factor that deters people from investing is that it appears expensive.

Understandably, no one wishes to waste their hard earned money.

But, is mutual fund investment really costly?

How much do you need to start?

What are the fees involved when investing in mutual funds?

Let’s find out.


The Initial Investment

Contrary to what you may think, investing in mutual funds isn’t really that costly.

In fact, all you need is five thousand (Php 5,000).

That’s the most common starting requirement for mutual fund investments.


Of course, the higher your investment, the higher the possibility of returns. And better if you keep it as a long-term investment, which is at least 5 years.

Once you’ve opened your account and made your initial investment, you can then provide additional amounts as low as Php 1,000.

Now, since there are different companies providing mutual funds, it’ll be best to inquire directly regarding the fees and charges associated with the investment.


Fees and Charges

There are different fees involved in a mutual fund:

  • Entry Fees

These fees are paid once the fund is purchased. The calculation for entry fees will depend on the company – it’s usually based on the type of fund you’ve invested in plus the amount of investment.

  • Exit Fees

These are paid upon fund withdrawal or redemption; they can also be charged if you choose to sell your shares. Usually, exit fees are no longer charged for long-term investments, particularly 5 years or more.

  • Management Fees

These are paid to the fund companies for monitoring and managing your account. Your funds are pooled, hence handed over to a professional fund manager for safekeeping and handling. These are often included in the fund’s NAVPS (Net Asset Value Per Share).


Please bear in mind that these fees are often dependent on the company. A fund with low fees can still perform well. The calculation shouldn’t be dependent on the performance of the fund.


Profits and Losses

The amount of profit (and hopefully, not loss) that you’re receiving will usually depend on:

  • the amount of money you’ve invested
  • the length of your investment (account opening date to fund redemption date)
  • the NAVPS (Net Asset Value Per Share)

The higher the amount of investment and the longer the investment is kept, the higher your potential profit would be.

In fact, that’s one of the basic things you should be informed of as early as account opening – that mutual funds should be a long-term investment.


Bottom line

If you’re concerned about how much money to shell out, then knowing all about the initial investments, fees, charges and profits and loss will greatly help.

Don’t be scared to go for it; who knows, this might have been the sign you were waiting for to succeed.


Those aforementioned details are what you need to start your mutual fund account.

For just Php 5,000, you could have taken your first step to financial freedom.

Go and invest in mutual funds today!

Remember, the best time to invest was YESTERDAY. The next best time is TODAY.

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