Unit Investment Trust Funds (uitf)

[wek1012]

panu ng pala ung 8% per annum for SDA. so if its only six months, 4% gross lng?

[Dr_PepPeR]

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!!!

 

That's why investing is done by the stomach! Well, again, UITFs are really for long termers. If you look at it everyday then that is the same thing as following your stock investment on a day to day basis. If you are not comfortable with volatility, check it out weekly or quarterly, but always with a long term investment horizon in mind. I really don't see any improvement on the current per annum return on fixed income UITFs but I still think this is a lot better than any other fixed income instrument except the SDA, and that is a short term instrument. But let me go out on a limb here:

 

NAVPUS ON FIXED INCOME PESOS WILL GO DOWN NEXT WEEK!

 

I think its a good time to subscribe, you will be able to go in on the downside. Market should go crazy again next week. Let's see.....

[Dr_PepPeR]

panu ng pala ung 8% per annum for SDA. so if its only six months, 4% gross lng?

 

The convention is really to quote on a per annum basis, in that way it is easier to compare apples to apples. But you are correct, on an absolute rate basis, it is really 4% for half a year.

[quietpower]

hope this is not too late.

but if you have the cash to get into the SDA and have not as of now...

it'll be tough to get in.

most of the EKBs and KBs that sell SDA via trust have all reached their tier 1 quotas.

and if they do intend to sell off tier 2, it'll be 2% lower na.

[Dr_PepPeR]

hope this is not too late.

but if you have the cash to get into the SDA and have not as of now...

it'll be tough to get in.

most of the EKBs and KBs that sell SDA via trust have all reached their tier 1 quotas.

and if they do intend to sell off tier 2, it'll be 2% lower na.

 

Try the savings/thrift banks with trust departments. They were still within Tier 1 as of last week.

[golfer697]

That's why investing is done by the stomach! Well, again, UITFs are really for long termers. If you look at it everyday then that is the same thing as following your stock investment on a day to day basis. If you are not comfortable with volatility, check it out weekly or quarterly, but always with a long term investment horizon in mind. I really don't see any improvement on the current per annum return on fixed income UITFs but I still think this is a lot better than any other fixed income instrument except the SDA, and that is a short term instrument. But let me go out on a limb here:

 

NAVPUS ON FIXED INCOME PESOS WILL GO DOWN NEXT WEEK!

 

I think its a good time to subscribe, you will be able to go in on the downside. Market should go crazy again next week. Let's see.....

 

 

Hay, Dr. Pepper, just read this now after checking my navpus!!! Peso went down a little but its been steadily going down na for the past 6 months!! The Dollar was what went down tremendously!! Went back to the April navpu levels!!

 

Is this a reaction to the New Zealand rate increase & to the realization that the Fed won't cut rates anytime soon?? As of now the bond rates in the USA are still up!! Does that mean the UITFs won't recover until the bond rates in the USA settles back to normal??

 

One must really have the stomach for investing! I just check my UITFs on a weekly basis. Although I understand it is ideally a long term investment & I have kept my funds in currently on a medium term, I just feel comfortable knowing what is happening to them. And this will allow me to react before it is too late. As my father said, it is not wise to go after high earnings if you risk losing your principal!! And sad to say, I have not always followed my father's advise!!

 

Thanks a lot to the good job you're doing in keeping us abreast with the markets Dr. Pepper!!!

[Dr_PepPeR]

Hay, Dr. Pepper, just read this now after checking my navpus!!! Peso went down a little but its been steadily going down na for the past 6 months!! The Dollar was what went down tremendously!! Went back to the April navpu levels!!

 

Is this a reaction to the New Zealand rate increase & to the realization that the Fed won't cut rates anytime soon?? As of now the bond rates in the USA are still up!! Does that mean the UITFs won't recover until the bond rates in the USA settles back to normal??

 

One must really have the stomach for investing! I just check my UITFs on a weekly basis. Although I understand it is ideally a long term investment & I have kept my funds in currently on a medium term, I just feel comfortable knowing what is happening to them. And this will allow me to react before it is too late. As my father said, it is not wise to go after high earnings if you risk losing your principal!! And sad to say, I have not always followed my father's advise!!

 

Thanks a lot to the good job you're doing in keeping us abreast with the markets Dr. Pepper!!!

 

Most of the US$ UITFs are invested in ROPs, except of course for the Asian Bond Funds. The NAVPUs are then really dependent on US Treasuries, since US Treasuries are preferred over ROPs. So I have a feeling you are right, that the US$ UITFs can't expect a significant return soon. The Peso UITFs haven't bottomed out yet. There will be a slight correction when the RTBs mature this month, but I predict Peso NAVPUs will significantly go down over the next few weeks.

[golfer697]

Most of the US$ UITFs are invested in ROPs, except of course for the Asian Bond Funds. The NAVPUs are then really dependent on US Treasuries, since US Treasuries are preferred over ROPs. So I have a feeling you are right, that the US$ UITFs can't expect a significant return soon. The Peso UITFs haven't bottomed out yet. There will be a slight correction when the RTBs mature this month, but I predict Peso NAVPUs will significantly go down over the next few weeks.

 

 

Ouuccchhh!!! You're right!! My $ UITF navpus are just reqistering 1+% today!! And you're predicting Peso navpus to go down pa!!! I've been thinking to divert some of my investments into blue chip stocks na lang!! These low interest returns won't do for me!!! Thanks, Dr. Pepper!!

[Dr_PepPeR]

Ouuccchhh!!! You're right!! My $ UITF navpus are just reqistering 1+% today!! And you're predicting Peso navpus to go down pa!!! I've been thinking to divert some of my investments into blue chip stocks na lang!! These low interest returns won't do for me!!! Thanks, Dr. Pepper!!

 

BSP SDAs are still the hot investment outlets right now if you're into fixed income instruments. For more than a month, it is still being offered at 8% per annum gross for 6 months.

[CodenameV]

I agree that bond based UITF's are very volatile right now. I liquidated my peso based bond fund 2 weeks ago and my $ based bond fund last week. Shifted them to a $ money market fund.

[paysek]

Hi I'm newbie here. After reading your post, I got interested to invest in UITF peso balanced fund.

My question is which local bank gives better rate based on 2nd quarter performance. Pls specify roughtly the rate

of each bank. Thanks in advance....

[wek1012]

may upcoming correction b para s equity?

[Dr_PepPeR]

Hi I'm newbie here. After reading your post, I got interested to invest in UITF peso balanced fund.

My question is which local bank gives better rate based on 2nd quarter performance. Pls specify roughtly the rate

of each bank. Thanks in advance....

 

You might have to look at the NAVPU charts. I only see YTD ROI as an 'apples to apples' comparison. You can try looking at your target bank's website as they usually have their UITF data there, or you could call their trust department (retail group) and just do a survey.

[anarkista]

Hi I'm newbie here. After reading your post, I got interested to invest in UITF peso balanced fund.

My question is which local bank gives better rate based on 2nd quarter performance. Pls specify roughtly the rate

of each bank. Thanks in advance....

 

you may also try visiting www.uitf.com.ph. i don't know how accurate their data are but i found them useful when i started out with UITFs. they have consolidated infos on the NAVPUs and history of banks offering UITFs.

[paysek]

ok.. noted with thanksok.. noted with thanks

[RealEstateMan]

So are you a Registered Financial Planner or a Licensed Stock Broker?

 

 

 

hello everyone!

 

It's interesting to find this thread in MTC. Anyway, I am an Investment professional in one of the reputable trust institutions and a Finance professor in one of the top universities here in the country. I suggest that we get to organize something similar to Entrepreneur's "Networking Night" where people interested in investing can get together and learn more about investing and managing their personal finances.

 

What do you guys think? Those willing to participate in organizing please express your intentions through this thread or perhaps open an new thread. I am volunteering my services by providing "CONTENT" for the seminar... this will include guest speakers.

[valjean]

Dr. Pepper,

 

Can you give an assessment of the future of UITF navpu's taking into consideration the BSP's recent moves on the interest rate? I noticed UITF (bond based) suddenly spiked a couple of days ago. Is this uptick sustainable?

 

Salamat po.

[Dr_PepPeR]

Dr. Pepper,

 

Can you give an assessment of the future of UITF navpu's taking into consideration the BSP's recent moves on the interest rate? I noticed UITF (bond based) suddenly spiked a couple of days ago. Is this uptick sustainable?

 

Salamat po.

 

I believe it is. With the recent lowering of the SDA rates, it seems the intent of the BSP is to keep interest rates down, so the UITFs which have long term FXTNs or bonds will benefit from the increase in the market value of those instruments. Loans, while encouraged by the BSP, has not really been availed by the commercial sector even if rates are lower now. So not much choices really on where to put your pesos. I'd say the best bet is on equity or balanced UITFs now, which I think will still outperform the fixed income UITFs.

[bikerider]

I believe it is. With the recent lowering of the SDA rates, it seems the intent of the BSP is to keep interest rates down, so the UITFs which have long term FXTNs or bonds will benefit from the increase in the market value of those instruments. Loans, while encouraged by the BSP, has not really been availed by the commercial sector even if rates are lower now. So not much choices really on where to put your pesos. I'd say the best bet is on equity or balanced UITFs now, which I think will still outperform the fixed income UITFs.

 

I totally agree. However, what do you think is the outlook on local stocks? As it is now, we are experiencing record highs, how long will this continue?

[Dr_PepPeR]

I totally agree. However, what do you think is the outlook on local stocks? As it is now, we are experiencing record highs, how long will this continue?

 

Local stocks, even now, will still be a good place to go for the next new months. Fixed income rates are neutral, inflation is benign, loan rates are down, nowhere to go. IPOs will be very attractive.

[valjean]

Thanks a lot for your words of wisdom Dr Pepper.

[Dr_PepPeR]

Thanks a lot for your words of wisdom Dr Pepper.

 

A bit of a caveat here. I am neither a financial analyst or economics expert so you may take what I post here with a grain of salt. I can only vouch for what I post about UITFs operations and regulations. I do wish the experts would chime in and post their opinions here, thanks.

[freeman]

UITFS just dived last friday, even lower than the rates 2 months ago? will it recover soon, slide more or what?

[Dr_PepPeR]

UITFS just dived last friday, even lower than the rates 2 months ago? will it recover soon, slide more or what?

 

Are you referring to fixed income UITFs? I think it will go sideways in the meantime but if interest rates are still low, then they should start creeping up soon. The best performers are still the balanced and equity UITFs. There isn't a whole lot of confidence yet in UITFs but if you take a look at the RTBs, while the three-year tenor is doing alright, the same can't be said for the five-year tenor. Looks like the tendency of the investors is still short-term, and the SDA rates are still competitive enough.

[G.I.]

Doc Pep,

 

Are all banks OFFER NAVPU different than their current market value? Why is this so. Please enlighthen.

 

I have tried two banks (equity funds) and their OFFER NAVPU is way higher by 2% than their current NAVPU. So in effect you are charged an additional 2%.

 

Regards