Unit Investment Trust Funds (uitf)

[golfer697]

Sadly, I think the problem is that there are some bank frontliners who are not too knowledgable regarding the product or find the internal procedure of processing the transaction tedious so they "discourage" clients from investing in UITFs. Normally, it is the marketing officers who are trained to sell the product correctly; even some branch managers are not very knowledgable about the product. Which in itself is a pity since their actions tend to reflect on the bank itself. Like in the case of julz2006, the action of the BDO personnel will create a bad impression on BDO for him.

 

If you are not satisfied with the bank person you are dealing with ( usually the frontliner), request that you talk to an officer about the product. They should be able to address all your inquiries and concerns. Also, do your own research by checking out the website of the bank.

 

 

I agree with lene. I deal with the marketing officers!!! Aside from being knowledgeable, they know how to treat you right!!!

[golfer697]

yup, this happend to me dati. the lady was aggresively telling me to invest invest invest in the AXA dollar uitf, since i have a metrobank dollar account naman daw, that it doesn't earn me that much in interest and the usual bullshit they tell you. napa-oo naman ako since maganda yung babae.

 

bad trip hindi maganda yung investment ko, tsk tsk tsk

 

 

Hehehe...Correct!!! Buti n lang hindi maganda yung nagaalok sa akin kaya hindi ako umoo!!!

[golfer697]

buti nga natapos na din eh! withdraw na ako kaagad.

 

sana sa kanya ako nag-withdrawal pero fr na yun! :mtc:

 

 

He he and hindi yan applicable in this topic!!

[Guest lene]

guys, what do you think of the ltncd offered by bpi? kausap ko kasi yung manager ng bpi kanina sa f. castillo malapit sa office namin and he was offering it to me. nasa 6% ata ang interest per quarter and other things. sabi ko padalhan nya ako ng literature para mapag-aralan ng mabuti.

 

looks like the same banana if you ask me.

 

this is a bit late since i think the offer period ended last week but personally, even if the rate looks pretty good at the moment, i wouldn't buy this product. it is tax-exempt to the investor if you hold on for the whole term of 5 years and 1 month. however, i don't think the low rates are sustainable within the 5 year period and sooner or later, the market rates will go up,maybe even higher than the 6.125% net. if the client sells it back within the period, he gets hit with the tax plus he gets hit with the loss on principal, should market rates be higher than his ltncd coupon rate. in short, for him not to lose, he is stuck with the paper for the whole term. as dr. pepper said earlier, BPI would really have to push the product since they competed head-on with the SDA.

 

having said that, i heard the reception was very good. offer size was supposedly 2 billion with a greenshoe option but bpi alone sold more than that, not including the volume standard chartered sold. goes to show that a reputable bank will never have problems selling a product to a public that trusts its name.

[golfer697]

kumuha nga ako minimum placement pero parang nag-aalala ako ngayon kasi baka tumaas ang interest rate ng mga banks pero mukhang hindi naman ganun kataas. sana nga pala nag-invest na lang ako sa stocks!!!!

 

 

Yes... 6.125% too low & 5 years 1 month too long!!

[jerzz]

Is Small Denominated Treasury Bond or SDT-Bond just like a time deposit? It has an interest of 13.625% per annum.

 

Any comments about SDT Bonds

[golfer697]

Is Small Denominated Treasury Bond or SDT-Bond just like a time deposit? It has an interest of 13.625% per annum.

 

Any comments about SDT Bonds

 

 

Are SDT Bonds the same as RTBs or Retail Treasury Bonds? 13.625% per annum is gross of the 20% tax ba?? Which banks are offering this please?? Sounds interesting. Thanks.

[jerzz]

Are SDT Bonds the same as RTBs or Retail Treasury Bonds? 13.625% per annum is gross of the 20% tax ba?? Which banks are offering this please?? Sounds interesting. Thanks.

 

I just read it at the Philippine Stock Exchange Website. www.pse.com.ph

 

Lets help each other

[golfer697]

I just read it at the Philippine Stock Exchange Website. www.pse.com.ph

 

Lets help each other

 

 

Visited the PSE site & clicked on everything but couldn't find anything about SDT Bonds.

[jerzz]

Visited the PSE site & clicked on everything but couldn't find anything about SDT Bonds.

 

found it at FAQ here it is anyway

 

Q. What are SDT- Bonds?

A. Small Denominated Treasury Bonds or SDT-Bonds are long term debt securities issued by the Bureau of Treasury of the Republic of the Philippines. The bond is an evidence of indebtedness of the Republic of the Philippines to the owner of the SDT-Bonds.

 

Q. How are SDT-Bonds different from an ordinary corporate bond? From an ordinary Saving account?

A. SDT-bonds differ from corporate bonds in terms of risk profile of the Issuer. SDT-Bonds have the full backing of the Republic of the Philippines, making it risk-free. On the other hand, corporate bonds entail higher risk that the Issuer may default on its obligations depending upon its stability. Further, compared to an ordinary savings account, SDT-Bonds are by far superior in terms of interest earnings.

 

Q. Why should I invest in SDT-Bonds?

A. SDT-Bonds are direct and unconditional obligations of the Republic of the Philippines to the holder. This makes the bond a prime collateral should the bondholder need to borrow money from a bank. Further, SDT-Bonds has a fixed coupon rate of 13.625% per annum, paid quarterly. This is among the highest yield that an investor can get from fixed-income securities.

 

Q. How do I get my interest earnings from bonds?

A. The interest earned from the investment will be credited to the bondholders account quarterly.

 

Q. What would be my proof of ownership if I invest in SDT-Bonds?

A. The SDT-Bonds will be registered in the Bureau of the Treasury’s (BTr) Registry of Scripless Securities. Since the transfer of securities shall be done electronically, confirmation slips shall be issued in lieu of the bond certificates as evidence of ownership.

 

Q. If I want to cash-in on my investments in the SDT-Bonds, do I have to wait for the maturity date?

A. An investor need not wait for the maturity date of the bond to recover his investments. Since the bonds shall be listed and traded on the Philippine Stock Exchange, he may sell the bond on the Exchange prior to maturity date.

 

Q. How do I start investing in SDT-Bonds? What is the minimum amount of investment?

A. Just like an ordinary savings account, an investor has to open an account and present valid identification with a broker before he can actively trade SDT-Bonds on the Exchange. An investor would need at least the minimum amount of investment which is Php 5,000.00.

 

Q. How is the SDT-Bond quoted on the PSE?

A. The price of the SDT-Bonds will be quoted as a percentage of its face value up to the sixth decimal place. For example, a bond with a face value of Php 5,000 is quoted at 99.000001. The market value of the bond is Php 4,950.00005 (5,000 x 0.99000001)

 

Q. What are the factors that could affect SDT-Bond prices?

A. The most important determinant of bond prices is the level of prevailing interest rate. As a general rule, the price of a bond tend to increase if prevailing interest rates fall and tend to decline as the interest rate increase. Other factors which could affect bond prices thru the level of interest rates are business cycle, inflation rate and flow of funds.

 

Q. Are all member-brokers allowed to trade SDT-Bonds?

A. Not all brokers can trade SDT-Bonds. As of 30 April 2003, there are at least 24 brokers accredited and allowed to trade SDT-Bonds, these are:

 

Abacus Securities Corporation

DBP-Daiwa Sec. SB Cap. Markets Phils., Inc

G. D. Tan and Company, Inc.

JSG Securities, Inc.

RCBC Securities, Inc

Wellex Global Equities, Inc.

BA Securities, Inc

F. Yap Securities, Inc

ICG Securities, Inc

Lucky Securities, Inc

Solar Securities, Inc

Worldsec International Sec. (Phils.), Inc.

I. Ackerman & Company, Inc.

A & A Securities, Inc.

Triton Securities Corporation

First Integrated Capital Securities, Inc.

Goldstar Securities, Inc.

Tansengco & Company, Inc.

Angping & Associates Securities, Inc.

Astra Securities Corporation

Globalinks Securities & Stocks, Inc.

Regina Capital Development Corporation

S.J. Roxas & Company, Inc.

Deutsche Regis Partners, Inc.

 

 

Q. How long is the settlement period for SDT-Bonds?

A. Unlike stocks which are settled three days after the transaction date (T+3), trade on the SDT-Bonds shall be settled on the same day (T+0) when the trade is transacted.

[Dr_PepPeR]

Small Denominated Treasury Bonds more commonly referred to as SDTs or SDTBs are government securities that usually match the tenor of Treasury Bills i.e. 91, 182 and 365 days but yield half a point lower than the lowest rate of the last T-Bill auction. These can only be accessed by small investors when the Bureau of Treasury opens this facility to retail clients. What you may be looking at is an FAQ in the PSE website that was created when SDTs were offered. As far as I know there are no SDTs being offered currently with a rate of 13.625% p.a., otherwise you would see a huge chunk of funds going there, but they are all going to the Special Deposit Account with BSP. Hope this helps.

[golfer697]

Oh okay thanks! Didn't see that though when I pressed the FAQ section. Don't know any of the brokers named though. Guess will just pass this one. Thanks a lot for the info though!!

 

 

found it at FAQ here it is anyway

 

Q. What are SDT- Bonds?

A. Small Denominated Treasury Bonds or SDT-Bonds are long term debt securities issued by the Bureau of Treasury of the Republic of the Philippines. The bond is an evidence of indebtedness of the Republic of the Philippines to the owner of the SDT-Bonds.

 

Q. How are SDT-Bonds different from an ordinary corporate bond? From an ordinary Saving account?

A. SDT-bonds differ from corporate bonds in terms of risk profile of the Issuer. SDT-Bonds have the full backing of the Republic of the Philippines, making it risk-free. On the other hand, corporate bonds entail higher risk that the Issuer may default on its obligations depending upon its stability. Further, compared to an ordinary savings account, SDT-Bonds are by far superior in terms of interest earnings.

 

Q. Why should I invest in SDT-Bonds?

A. SDT-Bonds are direct and unconditional obligations of the Republic of the Philippines to the holder. This makes the bond a prime collateral should the bondholder need to borrow money from a bank. Further, SDT-Bonds has a fixed coupon rate of 13.625% per annum, paid quarterly. This is among the highest yield that an investor can get from fixed-income securities.

 

Q. How do I get my interest earnings from bonds?

A. The interest earned from the investment will be credited to the bondholders account quarterly.

 

Q. What would be my proof of ownership if I invest in SDT-Bonds?

A. The SDT-Bonds will be registered in the Bureau of the Treasury’s (BTr) Registry of Scripless Securities. Since the transfer of securities shall be done electronically, confirmation slips shall be issued in lieu of the bond certificates as evidence of ownership.

 

Q. If I want to cash-in on my investments in the SDT-Bonds, do I have to wait for the maturity date?

A. An investor need not wait for the maturity date of the bond to recover his investments. Since the bonds shall be listed and traded on the Philippine Stock Exchange, he may sell the bond on the Exchange prior to maturity date.

 

Q. How do I start investing in SDT-Bonds? What is the minimum amount of investment?

A. Just like an ordinary savings account, an investor has to open an account and present valid identification with a broker before he can actively trade SDT-Bonds on the Exchange. An investor would need at least the minimum amount of investment which is Php 5,000.00.

 

Q. How is the SDT-Bond quoted on the PSE?

A. The price of the SDT-Bonds will be quoted as a percentage of its face value up to the sixth decimal place. For example, a bond with a face value of Php 5,000 is quoted at 99.000001. The market value of the bond is Php 4,950.00005 (5,000 x 0.99000001)

 

Q. What are the factors that could affect SDT-Bond prices?

A. The most important determinant of bond prices is the level of prevailing interest rate. As a general rule, the price of a bond tend to increase if prevailing interest rates fall and tend to decline as the interest rate increase. Other factors which could affect bond prices thru the level of interest rates are business cycle, inflation rate and flow of funds.

 

Q. Are all member-brokers allowed to trade SDT-Bonds?

A. Not all brokers can trade SDT-Bonds. As of 30 April 2003, there are at least 24 brokers accredited and allowed to trade SDT-Bonds, these are:

 

Abacus Securities Corporation

DBP-Daiwa Sec. SB Cap. Markets Phils., Inc

G. D. Tan and Company, Inc.

JSG Securities, Inc.

RCBC Securities, Inc

Wellex Global Equities, Inc.

BA Securities, Inc

F. Yap Securities, Inc

ICG Securities, Inc

Lucky Securities, Inc

Solar Securities, Inc

Worldsec International Sec. (Phils.), Inc.

I. Ackerman & Company, Inc.

A & A Securities, Inc.

Triton Securities Corporation

First Integrated Capital Securities, Inc.

Goldstar Securities, Inc.

Tansengco & Company, Inc.

Angping & Associates Securities, Inc.

Astra Securities Corporation

Globalinks Securities & Stocks, Inc.

Regina Capital Development Corporation

S.J. Roxas & Company, Inc.

Deutsche Regis Partners, Inc.

Q. How long is the settlement period for SDT-Bonds?

A. Unlike stocks which are settled three days after the transaction date (T+3), trade on the SDT-Bonds shall be settled on the same day (T+0) when the trade is transacted.

[golfer697]

Small Denominated Treasury Bonds more commonly referred to as SDTs or SDTBs are government securities that usually match the tenor of Treasury Bills i.e. 91, 182 and 365 days but yield half a point lower than the lowest rate of the last T-Bill auction. These can only be accessed by small investors when the Bureau of Treasury opens this facility to retail clients. What you may be looking at is an FAQ in the PSE website that was created when SDTs were offered. As far as I know there are no SDTs being offered currently with a rate of 13.625% p.a., otherwise you would see a huge chunk of funds going there, but they are all going to the Special Deposit Account with BSP. Hope this helps.

 

 

Half a point lower than the lowest rate of the last TBill auction will be tooooo low!!! Not worth it!! Thanks a lot Dr. Pep!

[spadon]

Answering my own question posted earlier on REITs, I just learned an enabling law is required and awaits Congressional approval. Guess this will take a while til the canvassing is done, winners proclaimed and new elects sworn in.

[teasoy216]

under present economic climate dapat conservative ang investment porfolio mo!

[tombone]

There alot of new's that the market is going to fall , any investment should be study and always on a look out for the market movement .

[Dr_PepPeR]

The local elections has proved to be a non-event in terms of investment inpact and everything seems to be going sideways. The Bangko Sentral is still continuing to mop up excess liquidity to control inflation and we should see the Special Deposit Account facility for trust accounts to extend up to second half of 2007. Peso is still performing well against the dollar and rates are still low. The problem is where to source investment outlets if the BSP decides to lower the rates on the SDA which is still a short-term outlet for most of the peso denominated UITFs.

[golfer697]

There alot of new's that the market is going to fall , any investment should be study and always on a look out for the market movement .

 

 

Hmmm..., if you're talking about the stock market, this will affect balanced funds which are only now beginning to provide decent returns!!! What's your take on this Dr. Pepper?? Should we unload now?? The problem is as you said, there are no alternative investments in sight! Peso & Dollar uitfs have gone down & are coasting sideways!! Must we be contented with 6-7% returns?? Thanks.

[VentureMaker]

maybe we should load up on funds composed of shares of stock.

[Dr_PepPeR]

Hmmm..., if you're talking about the stock market, this will affect balanced funds which are only now beginning to provide decent returns!!! What's your take on this Dr. Pepper?? Should we unload now?? The problem is as you said, there are no alternative investments in sight! Peso & Dollar uitfs have gone down & are coasting sideways!! Must we be contented with 6-7% returns?? Thanks.

 

For the moment, for fixed income outlets those figures aren't bad. If you still have units in balanced or equity funds, that will still probably be the best performers yet. If not, you can put some but not all of your investibles there since it looks like interest rates will go up due to inflationary pressures. Go short in the meantime till you can see where the rates are heading. If only I had the money to go into SDAs.

[wek1012]

ok b mag uitf now? i now have enough money to invest. plano ko dis week mginvest. i have already checked the differnt funds and have a short list of possible funds i might get into.

[Dr_PepPeR]

ok b mag uitf now? i now have enough money to invest. plano ko dis week mginvest. i have already checked the differnt funds and have a short list of possible funds i might get into.

 

Actually anytime is a good time to invest in a UITF provided you have your investment priorities straight. If you think long term, as in a year or more, then you can't go wrong with a UITF balanced, equity or bond fund since it will generally give you better returns than Government Securities or Time Deposits. If you had the funds, such as about P500K, I would suggest looking for a bank that offers an SDA, since a 6 month placement in this still gives a gross rate of 8% p.a. and then you net out the 20% withholding tax, the trust fees or treasury spread to get your net return.

[golfer697]

For the moment, for fixed income outlets those figures aren't bad. If you still have units in balanced or equity funds, that will still probably be the best performers yet. If not, you can put some but not all of your investibles there since it looks like interest rates will go up due to inflationary pressures. Go short in the meantime till you can see where the rates are heading. If only I had the money to go into SDAs.

 

 

Yes still have balanced funds & they are performing above 20% now after the February crash. But it keeps me edgy cause they fluctuate a lot & are very volatile!!! I heard that the SDAs are hard to go into since most of the time they are completely booked! If interest rates will go up, this should affect the stock market negatively & eventually the balanced & equity funds, correct? So in this case do you foresee the peso & dollar UITFs giving more return than the current 6-7%? However in the event of an interest rate increase in the USA, experience tells us that these UITFs will be affected negatively again!!! SIGH, Investing was never this hard!!! Nowadays every little movement in the world markets affect us!!!

[golfer697]

For the moment, for fixed income outlets those figures aren't bad. If you still have units in balanced or equity funds, that will still probably be the best performers yet. If not, you can put some but not all of your investibles there since it looks like interest rates will go up due to inflationary pressures. Go short in the meantime till you can see where the rates are heading. If only I had the money to go into SDAs.

 

 

Oooops, forgot to thank you for your reply & valued opinion!!! Thanks a lot Dr. Pepper!!!!!

[wek1012]

Actually anytime is a good time to invest in a UITF provided you have your investment priorities straight. If you think long term, as in a year or more, then you can't go wrong with a UITF balanced, equity or bond fund since it will generally give you better returns than Government Securities or Time Deposits. If you had the funds, such as about P500K, I would suggest looking for a bank that offers an SDA, since a 6 month placement in this still gives a gross rate of 8% p.a. and then you net out the 20% withholding tax, the trust fees or treasury spread to get your net return.

 

thnaks, dr. pepper. i'm looking into long term for my investment horizon. wala p ako 500k, nas afirst job palang ako d p nga regular. sabihin ko nlng s mom ko about the sda.