My first mutual fund investment is Sun Life Equity Fund. I bought it in November 2012 and until today, the absolute return value is 23%. It’s a good return for a newbie investor like me. And if you’re here looking for the best fund to invest in, Sun Life is a good choice but you have to study and read carefully before making that decision.
The first thing you should consider is the fee. Sun Life has two types of fees and you have the option to choose which type you prefer: Front-end and back-end.
1. Front-end fee is charged upon making the investment which is equivalent to 5% of the total amount of investment. However, you are free anytime to withdraw your investment without any additional fees. The withdrawal amount would only base on the prevailing navpu for the day. Personally, I think 5% is an exorbitant fee and there are many other funds that charge less or not charge at all.
2. Back-end fee is charged upon withdrawal of investment. If withdrawal is made within the first year, 5% shall be charged, 4% if within second year, 3% if within third year, 2% if within fourth year, and 1% if within fifth year. No fee shall be charged after the fifth year anniversary of the investment. Back-end fee is more reasonable than front-end in the sense that you have the option not to be charged a fee but only if you are willing to wait for five years.
I chose back-end fee when I invested back in 2012 and that was because my intention is to keep my fund over the long-term. The money that I put in is my disposable income which means that even in cases of emergency like hospitalization and calamities, I don’t intend to withdraw my investment.
My objective of keeping the fund beyond five years has so far proven effective. Absolute return of 23% is considered high in this era of low-interest rates. Banks can only offer a little more than one percent of interest per annum and taking inflation into consideration, and you are bound to lose while keeping your money in the bank. Inflation per year is between three to six percent.
Now, if your circumstances are different from mine, you should consider looking for other funds available in the market. With so many funds available now for the retail or small investor like us, you should be able to find the appropriate one.
In terms of convenience, Sun Life has an online platform called SunLink Online where you can monitor your investment. You only need to register through their website and you’re good to go. Sun Life has also partnered with COL Financial and peso-denominated funds are available online through COL Fund Source.
Recently, Auto-Invest Program was launched. The program is meant to form a habit of investing by deducting a specific amount every month and allocated to peso-denominated funds of Sun Life. But for now, only BDO clients can participate in this program.