Unit Investment Trust Funds (uitf)

[scooby91]

To Dr_P and the other Masters in this thread...

 

As a newbie investor, wat instruments do u recommend a novice investor go into, given current state of Pinas market.

From wat i understand, the stock market still has some momentum (some steam left). Can we expect it to be bullish for at elast the next 6 mos.? I also looked at most of the local equity mutual funds, and almost all are in the all time highs..

 

thanks in advance

[Dr_PepPeR]

To Dr_P and the other Masters in this thread...

 

As a newbie investor, wat instruments do u recommend a novice investor go into, given current state of Pinas market.

From wat i understand, the stock market still has some momentum (some steam left). Can we expect it to be bullish for at elast the next 6 mos.? I also looked at most of the local equity mutual funds, and almost all are in the all time highs..

 

thanks in advance

 

Of course, I would recommend UITFs, either fixed income or balanced funds. From current indications, I expect the NAVPUs to keep going up at least until the local elections. The usual caveat emptor blah blah blah. :hypocritesmiley:

Edited February 5, 2007 by Dr_PepPeR

[golfer697]

Having a hard time posting here. The page is not loading properly. Well anyway, how come the peso uitfs have been trending down, while the dollar uitfs suffered a dramatic downturn?? Lost 2% the other day! ROPs have corrected too! Any news???? Thanks1

[Dr_PepPeR]

Having a hard time posting here. The page is not loading properly. Well anyway, how come the peso uitfs have been trending down, while the dollar uitfs suffered a dramatic downturn?? Lost 2% the other day! ROPs have corrected too! Any news???? Thanks1

 

When you say trending down it means that the NAVPU rates should be going down over some time. I haven't seen this yet. Which particular peso UITFs are you referring to? The US dollar UITFs are influenced to a large extent by US Treasuries. If the US Treasuries almost match ROP rates, then this would bring down the demand for US$ ROPs and subsequently bring down the prices, causing the NAVPU of US$ UITFs to drop. You haven't lost the 2% unless you redeem it.

[tonyp]

Having a hard time posting here. The page is not loading properly. Well anyway, how come the peso uitfs have been trending down, while the dollar uitfs suffered a dramatic downturn?? Lost 2% the other day! ROPs have corrected too! Any news???? Thanks1

 

Agree with Dr. Pepper. The 2% loss may be due to the early termination. Always take note of the maturity period and the penalty rate to get out before its holding period.

 

The uptrend of the NAV's are not consistently going up. There are declines on a temporary basis but eventually goes up. Still okay so far.

[madness]

The uptrend of the NAV's are not consistently going up. There are declines on a temporary basis but eventually goes up. Still okay so far.

 

 

Im a previous forex trader and we have a program to get the previous hourly, daily and monthly changes. does BDO or our stock market have a similar program which monitors this? I currently have an investment in BDO fix income fund and balance fund but Im actually having difficulty in making decisions because I do not have the previous data.

[Dr_PepPeR]

The uptrend of the NAV's are not consistently going up. There are declines on a temporary basis but eventually goes up. Still okay so far.

Im a previous forex trader and we have a program to get the previous hourly, daily and monthly changes. does BDO or our stock market have a similar program which monitors this? I currently have an investment in BDO fix income fund and balance fund but Im actually having difficulty in making decisions because I do not have the previous data.

 

NAVPUs are computed on a a daily basis so just get the historical NAVPUs from BDO.

[golfer697]

When you say trending down it means that the NAVPU rates should be going down over some time. I haven't seen this yet. Which particular peso UITFs are you referring to? The US dollar UITFs are influenced to a large extent by US Treasuries. If the US Treasuries almost match ROP rates, then this would bring down the demand for US$ ROPs and subsequently bring down the prices, causing the NAVPU of US$ UITFs to drop. You haven't lost the 2% unless you redeem it.

 

 

Thanks Guys for the replies!! I was referring to MetroBank's UITF Peso Peak Earner and their Dollar Philippine bond Fund!! Considering the navpus since last December, they have considerably gone down from highs of 21% for the peso down to 14%! And for the Dollar from 18% to 12%, however, there was a sudden 2 day drop of 2% which had me worried. Dollars are recovering but peso is still trading sideways! I understand that this is a paper loss but if you wait too long before redeeming and the navpus continually go down then your realized loss might be greater!! I got burned in the May drop last year so I am more cautious now! I am charting my navpus and I realized that if I hadn't pulled out and took my losses and re-entered in july I would have been making only 10% on my investment now instead of the average 14%. Banco de Oro has become more cautious and their navpus are averaging constantly 13-14% so I moved to Metro cause they give better returns. Okay, Dr. Pepper, I remember watching on Bloomberg that dollar bonds indeed moved up! So that must explain the drop in dollar navpus! Another thing is if I am not realizing the proper returns in my investments, then might as well put the money into business! This would mean less golf though!!

[Pinoymale]

I am planning to invest in BDO UITFs as my initial foray into investing. I'm thinking of investing in one of the funds with a minimum of P10,000. On average, how many months should I wait before redeeming my investments and actually realize profits? I also plan to invest a part of my monthly salary into buying more units.

[Dr_PepPeR]

I am planning to invest in BDO UITFs as my initial foray into investing. I'm thinking of investing in one of the funds with a minimum of P10,000. On average, how many months should I wait before redeeming my investments and actually realize profits? I also plan to invest a part of my monthly salary into buying more units.

 

In general, most of the fixed income UITFs have investment horizons of over one year. Just check to see what are the investment objectives. This is to give the investment manager the time to make sure that you will get a reasonable return on your investment over your investment horizon. If you feel you need to get your profit, just redeem your units, subtract the income and use the principal to get more units. Of course the NAVPU may be higher this time but at least you realized your profit.

[anarkista]

Hi, Dr. Pepper,

 

My friend and I are planning to make another UITF with BPI. I remembered you saying Chinese New Year usually makes some corrections (downtrend?) in the NAVPU. May I know how long usually would it take the fund o recover (i.e., be "normal" again)?

[taz31]

yes, NAVPU for BDO balanced fund was really high yesterday at 2,365.7982. I invested 10,000 2 weeks ago and NAVPU then was 2,280.25. My "unrealized" profit for my 2 week investment is 375 pesos. That's 3.75% in just 2 wks. Panalo! but that's all in paper as of now, so i'll let it stay there until before election season.

 

^baka may correction in the coming days/weeks kasi sobrang taas na ng NAVPU these past few days, so better wait for that bago kayo mag-invest.

[rdy1437]

I'm planning to invest on either UITF or Mutual funds(probably equity funds). So i did some research. What i've notice is that banks will make an offer/sell a share with this amount and then when you redeem it they will also make an offer/buy a share which eventually bit less than what the current NAVS.

 

Example, let say Equity funds of Bank 1

 

Bid Offer Current NAVS

2/14/2007 2.00 6.00 4.00

 

When you buy, the bank put an extra 2 pesos but when you sell they deduct an extra 2 pesos from the current NAVS. Is this similar also to mutual funds? I was expecting that you will buy/sell the share on the actual NAVS. Does all banks do this?

[Dr_PepPeR]

Hi, Dr. Pepper,

 

My friend and I are planning to make another UITF with BPI. I remembered you saying Chinese New Year usually makes some corrections (downtrend?) in the NAVPU. May I know how long usually would it take the fund o recover (i.e., be "normal" again)?

 

Yes I remember saying there are usually corrections before Chinese New Year wherein I meant that the upward trend may level or go down a bit. This just usually lasts for a few days to a week as trading tends to wait until after the celebrations. When the NAVPU goes down, it may be a good time to get in.

[golfer697]

I'm planning to invest on either UITF or Mutual funds(probably equity funds). So i did some research. What i've notice is that banks will make an offer/sell a share with this amount and then when you redeem it they will also make an offer/buy a share which eventually bit less than what the current NAVS.

 

Example, let say Equity funds of Bank 1

 

Bid Offer Current NAVS

2/14/2007 2.00 6.00 4.00

 

When you buy, the bank put an extra 2 pesos but when you sell they deduct an extra 2 pesos from the current NAVS. Is this similar also to mutual funds? I was expecting that you will buy/sell the share on the actual NAVS. Does all banks do this?

 

 

Really!!!! I've not encountered this with BDO nor MetroBank!

[Pinoymale]

Thanks for the info. Considering the nature of Philippine election, would it be advisable to wait after May to invest in UITFs? My wife and I are excited about investing but we're trying to determine the right time to do so.

 

In general, most of the fixed income UITFs have investment horizons of over one year. Just check to see what are the investment objectives. This is to give the investment manager the time to make sure that you will get a reasonable return on your investment over your investment horizon. If you feel you need to get your profit, just redeem your units, subtract the income and use the principal to get more units. Of course the NAVPU may be higher this time but at least you realized your profit.

[tonyp]

I'm planning to invest on either UITF or Mutual funds(probably equity funds). So i did some research. What i've notice is that banks will make an offer/sell a share with this amount and then when you redeem it they will also make an offer/buy a share which eventually bit less than what the current NAVS.

 

Example, let say Equity funds of Bank 1

 

Bid Offer Current NAVS

2/14/2007 2.00 6.00 4.00

 

When you buy, the bank put an extra 2 pesos but when you sell they deduct an extra 2 pesos from the current NAVS. Is this similar also to mutual funds? I was expecting that you will buy/sell the share on the actual NAVS. Does all banks do this?

 

At BPI, it is different. The NAV for UITF Premium is quoted on a daily basis. It also gives another rate which is lesser by 1/2 of 1% for those who want to pre-terminate before the 90 day holding period.

[tonyp]

Hi, Dr. Pepper,

 

My friend and I are planning to make another UITF with BPI. I remembered you saying Chinese New Year usually makes some corrections (downtrend?) in the NAVPU. May I know how long usually would it take the fund o recover (i.e., be "normal" again)?

 

Like to know what will cause the correction when the environment of low interest rates is quite stable? Thanks.

 

At BPI, it is different. The NAV for UITF Premium is quoted on a daily basis. It also gives another rate which is lesser by 1/2 of 1% for those who want to pre-terminate before the 90 day holding period.

 

Correction. It is 1/4 of 1%. Not 1/2.

[anarkista]

Like to know what will cause the correction when the environment of low interest rates is quite stable? Thanks.

 

Sorry, Sir, I am a bit lost here. Are you asking if I "Like to know what will cause the correction when the environment of low interest rates is quite stable?"? Yes, I do. It would help me in future investments.

 

Thanks!

[roaddog z]

:thumbsupsmiley:

[tonyp]

Sorry, Sir, I am a bit lost here. Are you asking if I "Like to know what will cause the correction when the environment of low interest rates is quite stable?"? Yes, I do. It would help me in future investments.

 

Thanks!

 

Actually, I do not know what will cuase the correction. I want to learn from the more experienced. Thanks.

[arabianknight]

Hi Doc Pepper,

 

Good day!

 

If I have $4,000. right now,

 

1. Should I invest on the same currency? Which is best for short term (minimum of 3 months) then roll up.

 

2. Or should I wait for the weaker peso against dollar then convert my dollars? Then invest the money to UITF.

 

 

Thanks.

[Dr_PepPeR]

Really!!!! I've not encountered this with BDO nor MetroBank!

 

I've not encountered this either in any banks' UITF. As far as I know there is only the NAVPU and that is the basis for computing how many units you will get with the funds you have on any particular day.

[Dr_PepPeR]

Like to know what will cause the correction when the environment of low interest rates is quite stable? Thanks.

Correction. It is 1/4 of 1%. Not 1/2.

 

Like all trends, sooner or later they are bound to correct a bit when the line hits resistance level. Political events may do this and the traditional seasonal events may also. Since these are simply corrections, they are most likely just to be speed bumps. In general, the trends will continue I think, all the way past the elections as the fundamentals are still pretty good. Jez mah 'pinion.

[Dr_PepPeR]

Hi Doc Pepper,

 

Good day!

 

If I have $4,000. right now,

 

1. Should I invest on the same currency? Which is best for short term (minimum of 3 months) then roll up.

 

2. Or should I wait for the weaker peso against dollar then convert my dollars? Then invest the money to UITF.

Thanks.

 

I suggest you invest in a US Dollar investment vehicle. The Peso is still very strong and there appears to be no shortage of dollars. There are several UITF Dollar funds for you to choose from.