Unit Investment Trust Funds (uitf)

[Dirty_Harry]

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.

 

 

It's an excellent idea but still we need more MTC members to be involved in this. I am keeping my entreprenuerial spirit at high and hope that other young people like me would like to gain more knowledge this time. As i have said, I am on a Real Estate Industry and have been a professional licensed Real Estate Broker for the past years.

Edited April 10, 2007 by Dirty_Harry

[golfer697]

Dr. Pepper, I believe golfer697 mentioned Metrobank and BDO.

golfer697, I deal with several banks for their various UITFs including the banks you mentioned but I don't think it's possible to " guarantee" protection of principal in case market is really against the UITFs. If your bank returned your principal last year, even if the NAVPU was lower than the price you bought it at, Dr. Pepper is right in his observation that they guaranteed your principal, which is a no-no for UITFs. That is why I suggested that perhaps when you preterminated last year, the early redemption price was still higher than your original NAVPU, which is why you might have presumed that the penalty is on the income alone. :flowers:

 

I do hope you check with your bank again, sir, because the contact person you are talking to might have sold it incorrectly and that is a cause of concern. The only way UITFs can flourish in this country is if the banks concerned train their people well in selling the product correctly so that clients who buy the UITFs will understand the inherent risks involved but at the same time, will understand that they also have more to gain in the long run.

 

 

I think we have a misunderstanding here!! I believe what I said was that the banks penalizes me on the income, 50% of the income on pretermination, to be exact!! If there is no income on pretermination or if there was a loss then the banks don't charge me anything!! It'll be great if they would share 50% of the loss hehe! BUT I NEVER SAID ANYTHING ABOUT THE BANKS GUARANTEEING MY PRINCIPAL PLACEMENT!!! NOR PROTECTION OF PRINCIPAL!! THAT AS WE ALL KNOW IS NOT THE NORM IN UITFs!! NEITHER DID I SAY THAT THE BANKS RETURNED MY PRINCIPAL!!! What I said was that they multiplied the prevailing NAVPU for the day to my number of units and they didn't deduct anything else. Of course I lost a little cause the navpu went down. But there was no pretermination charge on the principal. I think there is a miscommunication here somewhere. I was reacting to a post regarding a PENALTY ON THE PRINCIPAL in case of pretermination. This I understand to be an ADDITIONAL PENALTY over & above your trading losses based on your navpu. If by PENALTY you meant the trading losses based on the navpu then those aren't penalties at all since if you made money & preterminated, then you lose half of your income over & above your principal. That would be a penalty. What I understood was aside from my trading losses in the navpu, they would charge me a penalty percentage on my principal. Which didn't happen at all. So far all the banks I've talked to give me the same explanation. And I do go in & out of the different UITFs with no problem at all. What do you mean by "dealing with several banks with their various uitfs"?

[golfer697]

Perhaps you can check with your bank again since I don't think it's possible to charge penalties on the "income" alone . The concept of UITFs is you buy a number of units at a certain price. After a certain period, you redeem it at the prevailing market price or NAVPU . Whatever is the difference of both prices is your "gain" or "loss". If you redeem it before the end of the holding period, the price they will normally use will be a bit lower than the NAVPU for the day. Using this lower price, you can see it you gained or lost in the transaction ( based on the original NAVPU you bought the UITF at).

 

Perhaps in your case when you redeemed early, the price set is still higher than the price you bought it at so you would presume the penalty is just on the " income" alone.

 

Please correct me, Dr. Pepper, if I may be wrong in my understanding....

 

>>>>> Perhaps you can check with your bank again since I don't think it's possible to charge penalties on the "income" alone . The concept of UITFs is you buy a number of units at a certain price. >>>> Correct...

 

>>>>> After a certain period, you redeem it at the prevailing market price or NAVPU . Whatever is the difference of both prices is your "gain" or "loss". >>>>> Correct...

 

>>>>> If you redeem it before the end of the holding period, the price they will normally use will be a bit lower than the NAVPU for the day. Using this lower price, you can see it you gained or lost in the transaction ( based on the original NAVPU you bought the UITF at). >>>>> WRONG. They used the same navpu for me as for everybody else. Checked it on the website.

 

>>>>> Perhaps in your case when you redeemed early, the price set is still higher than the price you bought it at so you would presume the penalty is just on the " income" alone. >>>>> No dearie, I actually lost money. But my # of units multiplied by the day's navpu was what I got. They didn't deduct anything else. No penalties. You mean other banks would still deduct something else or as you said use a lower navpu???

[golfer697]

So they gave you back the initial amount you placed with them? If that is true, and if the NAVPU when you preterminated was lower than when you came in, in effect they guaranteed your principal. As far as I know, that is a no-no for trust and UITFs in particular. I forget, which bank is this sir?

 

 

No Dr Pep. They gave me back my # of units multiplied by day's navpu >>>>> I preterminated and all they did was to give me back my placement based on the day's prevailing NAVPU since I preterminated at a loss!!

 

No additional penalties were charged aside from my loss based on the navpu. My loss is not considered a penalty or is it? >>>>> No penalties were charged since I lost!! Their penalty fee is 50% of income!! It would be horrendous to think that they will charge me 50% of my placement!!!

[Guest lene]

I think we have a misunderstanding here!! I believe what I said was that the banks penalizes me on the income, 50% of the income on pretermination, to be exact!! If there is no income on pretermination or if there was a loss then the banks don't charge me anything!! It'll be great if they would share 50% of the loss hehe! BUT I NEVER SAID ANYTHING ABOUT THE BANKS GUARANTEEING MY PRINCIPAL PLACEMENT!!! NOR PROTECTION OF PRINCIPAL!! THAT AS WE ALL KNOW IS NOT THE NORM IN UITFs!! NEITHER DID I SAY THAT THE BANKS RETURNED MY PRINCIPAL!!! What I said was that they multiplied the prevailing NAVPU for the day to my number of units and they didn't deduct anything else. Of course I lost a little cause the navpu went down. But there was no pretermination charge on the principal. I think there is a miscommunication here somewhere. I was reacting to a post regarding a PENALTY ON THE PRINCIPAL in case of pretermination. This I understand to be an ADDITIONAL PENALTY over & above your trading losses based on your navpu. If by PENALTY you meant the trading losses based on the navpu then those aren't penalties at all since if you made money & preterminated, then you lose half of your income over & above your principal. That would be a penalty. What I understood was aside from my trading losses in the navpu, they would charge me a penalty percentage on my principal. Which didn't happen at all. So far all the banks I've talked to give me the same explanation. And I do go in & out of the different UITFs with no problem at all. What do you mean by "dealing with several banks with their various uitfs"?

 

Sir, I think I see where you are coming from and I agree there might be some sort of misunderstanding here. I see the product from a certain point of view and you see the product from another point of view; the end result might still be the same. Maybe I just view the product simply so I can understand it more. For me, if I place a certain amount and after a certain period when I redeem, the amount I get is less than the amount I placed initially, then that's a loss for me. But that is just my way of viewing things I do hope, though, you don't take it personally and go ballistic on me. Natakot po ako sa all caps ninyo, sir golfer. Huwag na po kayo magalit :flowers: :flowers:

 

I do buy UITFs from several banks - some in equity, some in bond funds, some balanced. That's what I meant when I said I deal with several banks with various UITFs.

 

 

When I pulled out of a bond fund ( I believe sa BPI yun), I think the NAVPU used was lower by about .25% kasi within the holding period of 90 days. If in your case when you pulled out they still used the same NAVPU, then good for you.

 

Peace na po, sir :flowers: :flowers: :flowers:

[julz2006]

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.

 

 

..it's a wonderful idea!!..it may not amount to much but,I'm in,sir...

[Dr_PepPeR]

No Dr Pep. They gave me back my # of units multiplied by day's navpu >>>>> I preterminated and all they did was to give me back my placement based on the day's prevailing NAVPU since I preterminated at a loss!!

 

No additional penalties were charged aside from my loss based on the navpu. My loss is not considered a penalty or is it? >>>>> No penalties were charged since I lost!! Their penalty fee is 50% of income!! It would be horrendous to think that they will charge me 50% of my placement!!!

 

Thanks for the clarification. I also took a look at Metrobank's webpage and their pretermination penalty is indeed 50% of the income. I guess what happens is when you preterminate and the proceeds are higher than what you originally placed, the Bank will charge you half of the increment. This seems to be logical enough so that it would discourage the quick profit takers who just want to go in and out of the fund. If at the time you preterminate, the current NAVPU will give you equal or less than the proceeds you initially placed, then you absorb the loss and there is no penalty since you have no income. It just so happened that when you preterminated, the NAVPU for the day was not low enough to eat into your principal. But like lene said, there are UITFs that charge a fee and/or a percentage of the proceeds whichever is higher for pretermination.

[Dr_PepPeR]

Sir, I think I see where you are coming from and I agree there might be some sort of misunderstanding here. I see the product from a certain point of view and you see the product from another point of view; the end result might still be the same. Maybe I just view the product simply so I can understand it more. For me, if I place a certain amount and after a certain period when I redeem, the amount I get is less than the amount I placed initially, then that's a loss for me. But that is just my way of viewing things I do hope, though, you don't take it personally and go ballistic on me. Natakot po ako sa all caps ninyo, sir golfer. Huwag na po kayo magalit :flowers: :flowers:

 

I do buy UITFs from several banks - some in equity, some in bond funds, some balanced. That's what I meant when I said I deal with several banks with various UITFs.

When I pulled out of a bond fund ( I believe sa BPI yun), I think the NAVPU used was lower by about .25% kasi within the holding period of 90 days. If in your case when you pulled out they still used the same NAVPU, then good for you.

 

Peace na po, sir :flowers: :flowers: :flowers:

 

Just a slight misunderstanding of the terms here. I think we view all things the same way, we just have different ways of expressing it. It is so easy to see why UITFs can be misunderstood, it is really not that easy to grasp. I usually advise people who are rate shoppers and compute their earnings monthly not to go into UITFs until they are fully comfortable with the concept.

[golfer697]

Sir, I think I see where you are coming from and I agree there might be some sort of misunderstanding here. I see the product from a certain point of view and you see the product from another point of view; the end result might still be the same. Maybe I just view the product simply so I can understand it more. For me, if I place a certain amount and after a certain period when I redeem, the amount I get is less than the amount I placed initially, then that's a loss for me. But that is just my way of viewing things I do hope, though, you don't take it personally and go ballistic on me. Natakot po ako sa all caps ninyo, sir golfer. Huwag na po kayo magalit :flowers: :flowers:

 

I do buy UITFs from several banks - some in equity, some in bond funds, some balanced. That's what I meant when I said I deal with several banks with various UITFs.

When I pulled out of a bond fund ( I believe sa BPI yun), I think the NAVPU used was lower by about .25% kasi within the holding period of 90 days. If in your case when you pulled out they still used the same NAVPU, then good for you.

 

Peace na po, sir :flowers: :flowers: :flowers:

 

 

He he he dearie, that's just the way I type to make a point. Hindi po ako mad i was just worried that I might not have really understood my UITF contracts. But after I checked my figures they were right naman.

 

We view losses the same way dearie. If I get back less than I placed then its a loss. More so, if I earned less than time deposit rates when I redeem, then I consider it a loss too!!!

 

What I was worried about was the pretermination penalty on the principal!!! It's good that the 2 banks I deal with don't penalize this way. Thank you for the info on BPI. I never deal with them anyway since they don't push their UITFs & are not too friendly. The last time I inquired they were saying that UITFs are too risky & tried to shift the placement to time deposits which were giving far too low returns!!

 

Yes they used the same navpu & didn't charge me anything for pretermination!!! O baka naman matakot ka pa dito sa mga exclamation points ko ha??? Hehehe. Peace too.

[golfer697]

Thanks for the clarification. I also took a look at Metrobank's webpage and their pretermination penalty is indeed 50% of the income. I guess what happens is when you preterminate and the proceeds are higher than what you originally placed, the Bank will charge you half of the increment. This seems to be logical enough so that it would discourage the quick profit takers who just want to go in and out of the fund. If at the time you preterminate, the current NAVPU will give you equal or less than the proceeds you initially placed, then you absorb the loss and there is no penalty since you have no income. It just so happened that when you preterminated, the NAVPU for the day was not low enough to eat into your principal. But like lene said, there are UITFs that charge a fee and/or a percentage of the proceeds whichever is higher for pretermination.

 

 

It did affect my principal. Lost a little but its good they didn't charge me any pretermination penalty since there was no income. Peace & Thanks!!!

[anarkista]

I was just wondering if we want to push through with this. Sana.. :-) I am new to UITFs. I am currently involved in equity funds, but I have to admit, I have limited knowledge on investment. I would like to suggest that we support this suggestion. And of course, more than just learning new knowledge on investments, we get to widen our network of social life. :-) More opportunities.

 

 

 

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.

[Dr_PepPeR]

I was just wondering if we want to push through with this. Sana.. :-) I am new to UITFs. I am currently involved in equity funds, but I have to admit, I have limited knowledge on investment. I would like to suggest that we support this suggestion. And of course, more than just learning new knowledge on investments, we get to widen our network of social life. :-) More opportunities.

 

While I think this is a good idea, I am periodically time-challenged. Contrary to what many people think I do have a life outside of MTC and I'd rather answer specific questions here when my time permits.

[Dr_PepPeR]

Peso Bond/Fixed Income UITFs will start to go down today until next week. If you have extra funds for UITFs, I suggest you start subsribing by next week, as NAVPUs will start to go up again by the first or second week of May. Just another worthless fearless forecast.

[golfer697]

Peso Bond/Fixed Income UITFs will start to go down today until next week. If you have extra funds for UITFs, I suggest you start subsribing by next week, as NAVPUs will start to go up again by the first or second week of May. Just another worthless fearless forecast.

 

 

Thanks Dr. Pep!!! Why is this so?? What is the reason?? Are you connected with any bank or financial institution that deals in UITFs or bonds?? Thanks.

[anarkista]

Thanks Dr. Pep!!! Why is this so?? What is the reason?? Are you connected with any bank or financial institution that deals in UITFs or bonds?? Thanks.

 

Napaisip din ako kasi two weeks or from now would be the election period... I expected the opposite, actually. But then, I am better at planting kamote than predicting market behavior..

[dexterhaba]

Napaisip din ako kasi two weeks or from now would be the election period... I expected the opposite, actually. But then, I am better at planting kamote than predicting market behavior..

 

 

Mga pards medyo OT pero kailangan ko lang kasi ng advise,,, how about forex? balak ko kasi magpapalit ng malaking dollar eh,, so let me know kung tataas pa ulit ang dollar before election,, thanks marami !!!

:mtc:

[Dr_PepPeR]

Thanks Dr. Pep!!! Why is this so?? What is the reason?? Are you connected with any bank or financial institution that deals in UITFs or bonds?? Thanks.

 

Tetangco's BSP will be opening up a Special Deposit Account facility for banks and trust institutions starting second week of May that will offer very very attractive rates for placements of very short tenure. This means that UITFs will unload GS to convert to cash to avail of this facility and prices for GS will go down quickly and drive down fixed income UITFs NAVPUs(thanks to the law of supply and demand). The move is apparently intended to curb projected inflation.

 

Napaisip din ako kasi two weeks or from now would be the election period... I expected the opposite, actually. But then, I am better at planting kamote than predicting market behavior..

 

Money supply just seems to be at another all time high. This is one of the times the BSP feels the need to step in to mop up excess liquidity.

 

Mga pards medyo OT pero kailangan ko lang kasi ng advise,,, how about forex? balak ko kasi magpapalit ng malaking dollar eh,, so let me know kung tataas pa ulit ang dollar before election,, thanks marami !!!

:mtc:

 

Not a good time to convert to pesos from dollars. OFW remittances continue to be very hefty and so supply of dollars is still in far excess of demand. I don't think this will change before the elections.

[golfer697]

Tetangco's BSP will be opening up a Special Deposit Account facility for banks and trust institutions starting second week of May that will offer very very attractive rates for placements of very short tenure. This means that UITFs will unload GS to convert to cash to avail of this facility and prices for GS will go down quickly and drive down fixed income UITFs NAVPUs(thanks to the law of supply and demand). The move is apparently intended to curb projected inflation.

Money supply just seems to be at another all time high. This is one of the times the BSP feels the need to step in to mop up excess liquidity.

Not a good time to convert to pesos from dollars. OFW remittances continue to be very hefty and so supply of dollars is still in far excess of demand. I don't think this will change before the elections.

 

 

Ah okay. This is the 8% special deposit account that they opened up for government institutions. So dollar UITFs should not be affected or will they? Is this special deposit account unlimited? Cause if it is, then UITFs won't go back up or will take a long time to recover? Thanks!!!

[Dr_PepPeR]

Ah okay. This is the 8% special deposit account that they opened up for government institutions. So dollar UITFs should not be affected or will they? Is this special deposit account unlimited? Cause if it is, then UITFs won't go back up or will take a long time to recover? Thanks!!!

 

Yes, that's the facility I heard about, and because there are no implementing guidelines issued as of yet, I have no idea if the SDA will have a limit. UITFs will go back up after that once the SDA is booked in the UITFs so that should be after the second week of May. Dollar UITFs are also expected to go down slightly for this period.

[anarkista]

I checked BDO's website and it has NAVPU for Equity Fund. The last time I inquire with their office, sometime last January, they say they do not have Equity Fund. Just wondering if anyone here can help me.. at the very least, to clarify if BDO is really offering Equity Fund.

[Ankiseth]

Samething happenned to me, they had it in the brochures as well.

 

Ended up getting the Balanced fund for now.

[golfer697]

Yes, that's the facility I heard about, and because there are no implementing guidelines issued as of yet, I have no idea if the SDA will have a limit. UITFs will go back up after that once the SDA is booked in the UITFs so that should be after the second week of May. Dollar UITFs are also expected to go down slightly for this period.

 

 

Thanks a lot Dr. Pepper!!!

[anarkista]

Samething happenned to me, they had it in the brochures as well.

 

Ended up getting the Balanced fund for now.

 

Checked with them yesterday. Found out that they only offer Equity Funds to corporate accounts.. Balanced Fund na lang muna. :-)

[loudchild]

I need help guys. i have a few cash in excess that im planning on investing. maliit lang nmn. Let say im willing to invest 10k to 20k just to test the market. san ko mgandang ilagay? im willing to let it stay nmn ng long term e kc excess nga. Gus2 ko lng ung hindi nmn patalo kung mginvest ako kc kung gnun lng din e d s gmik n lng gastusin hehehehe. But kidding aside im dead serious. mtgal tgal n din kc ako ngwowork and feeling ko d gnun kbilis ung pglago ng pera ko s simpleng savings account lang. i just wanna try something else. Advise lang mga boss. Slamat.

[freezer]

I need help guys. i have a few cash in excess that im planning on investing. maliit lang nmn. Let say im willing to invest 10k to 20k just to test the market. san ko mgandang ilagay? im willing to let it stay nmn ng long term e kc excess nga. Gus2 ko lng ung hindi nmn patalo kung mginvest ako kc kung gnun lng din e d s gmik n lng gastusin hehehehe. But kidding aside im dead serious. mtgal tgal n din kc ako ngwowork and feeling ko d gnun kbilis ung pglago ng pera ko s simpleng savings account lang. i just wanna try something else. Advise lang mga boss. Slamat.

 

i am now offering a better deal than uitf specially if your not that risk taker. it's a 3, 4 and 5 year program with high yield. your investments will be placed in governement securities and housing loan projects rather in speculative market. this is not a life insurance nor a traded product like the one offered in banks. this is not networking or pyramiding scheme either. it is primarily designed to support our economy. for further details, we can set an appointment for whole presentation. you got nothing to loose. PM me

 

I need help guys. i have a few cash in excess that im planning on investing. maliit lang nmn. Let say im willing to invest 10k to 20k just to test the market. san ko mgandang ilagay? im willing to let it stay nmn ng long term e kc excess nga. Gus2 ko lng ung hindi nmn patalo kung mginvest ako kc kung gnun lng din e d s gmik n lng gastusin hehehehe. But kidding aside im dead serious. mtgal tgal n din kc ako ngwowork and feeling ko d gnun kbilis ung pglago ng pera ko s simpleng savings account lang. i just wanna try something else. Advise lang mga boss. Slamat.

 

i am now offering a better deal than uitf specially if your not that risk taker. it's a 3, 4 and 5 year program with high yield. your investments will be placed in governement securities and housing loan projects rather in speculative market. this is not a life insurance nor a traded product like the one offered in banks. this is not networking or pyramiding scheme either. it is primarily designed to support our economy. for further details, we can set an appointment for whole presentation. you got nothing to loose. PM me