Unit Investment Trust Funds (uitf)

[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.

[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.