Unit Investment Trust Funds (uitf)

[flashman]

hi doc pepper. thanks for all your inputs here. learned a lot just by reading. anyway, currently, equity and balanced funds are on a decline ryt now.

[kamandag7]

the yield of bond fund of bdo last month up to this month is about 16% per annum very tempting the last time i jump into it. i lost quite a lot waited for six

 

months after i pull it out 2 weeks later. it jump very high i should waited for it . if only i know .......

[Dr_PepPeR]

Investments in UITFs are for those with long term investment horizons, probably around 2-3 years. It is good strategy to subscribe when the NAVPUs are low, rather than jump in when the NAVPUs are starting to go up, because by the time you choose to follow the bandwagon, it will be too late to realize any significant gains. Unfortunately, it is very hard to overcome human nature, and things only start to make sense in hindsight.

[ISABELLA]

True. ^ UITFs are for long term ones and my range is 5-20 years. SO far so good. At first, I do check them monthly. I make sure to add up my NAVPU when theyre low. These are opportunities for me. So far so good. The last hit was way back 2007. 73% up.

[satnight]

I agree, UITFs are for medium to long term and they offer higher interest rates compared to the savings,current or even time deposit accounts. However, these funds are not considered as bank deposits therefore not covered by PDIC. So investing a big amount or more than 250K-500K may be a risk if the bank co. decides to....run :pirate: My two cents worth

[Dr_PepPeR]

True. ^ UITFs are for long term ones and my range is 5-20 years. SO far so good. At first, I do check them monthly. I make sure to add up my NAVPU when theyre low. These are opportunities for me. So far so good. The last hit was way back 2007. 73% up.

 

Even if your investment horizon is 20 years, if you feel you have made a significant gain, you may want to redeem your units in order to realize your gains. Then just go in again at the present NAVPU.

 

I agree, UITFs are for medium to long term and they offer higher interest rates compared to the savings,current or even time deposit accounts. However, these funds are not considered as bank deposits therefore not covered by PDIC. So investing a big amount or more than 250K-500K may be a risk if the bank co. decides to....run :pirate: My two cents worth

 

The reason why UITFs are not covered by PDIC is because like the other Trust Funds, they are not considered part of the bank's assets. If you look at the bank's balance sheet, they are lodged under 'contingent accounts'. If they are not part of the bank's assets, they cannot be used to pay for the liabilities of the bank, because UITF, like trust assets, belong to the beneficiaries/trustors. In case a bank folds, the assets under trust are simply transferred to another bank by the BSP.

Edited July 4, 2009 by Dr_PepPeR

[teban]

mga masters question lang po what is the difference in mutual funds against the UITFs?

 

tsaka po I am wondering how do we actually earn from such? as far as i know there is a fund manager that manages the money to invest it in different sorts to hopefully earn from it. and then there is the price per unit at which we base "shares" of what we bought right?

Is my understanding correct that one part of earning or loosing money is when NAVPU goes up or down depending on the people in the market much like stocks do?

And also what happens to the earnings brought about by the investments of the fund manager? Do we also have dividends for UITFs and Mutual funds?

 

thanks in advance!

[mr.bukol]

sir can i talked to you on the phone or personally , i really cant understand on how to invest , my plan kasi is stop buying college plan for my kids , instead invest it nalang , kasi nag close na cap , i bought 1 for my eldest , o san sa bank pwede mag tanong? thanks

[Guest lustfortravel]

mga masters question lang po what is the difference in mutual funds against the UITFs?

 

tsaka po I am wondering how do we actually earn from such? as far as i know there is a fund manager that manages the money to invest it in different sorts to hopefully earn from it. and then there is the price per unit at which we base "shares" of what we bought right?

Is my understanding correct that one part of earning or loosing money is when NAVPU goes up or down depending on the people in the market much like stocks do?

And also what happens to the earnings brought about by the investments of the fund manager? Do we also have dividends for UITFs and Mutual funds?

 

thanks in advance!

 

let me give you my two cents worth.

 

A mutual fund is offered by an investment company and the funds are managed by a duly-appointed fund manager. UITFs are bank products which is normally managed by the bank's trust department. mutual funds are regulated by the Securities and Exchange Commission and only SEC-licensed salesmen are allowed to sell these while UITFs are regulated by the BSP and bank personnel are not normally required a license to be able to offer these to their clients.

 

you lose money if your selling price is lower than your cost price and you earn if the selling price is higher than your cost . since these funds are subject to fluctuations ( that is considered normal), it is normally recommended that you have a medium to long term investment horizon, say 2-3 years, before you decide to invest. you must also choose what type of mutual fund/UITF is suited for you- some people can handle a portion being invested in stocks while others cannot sleep at night due to the huge swings/volatility in price.

 

earnings from the maturity of investments in the fund are normally reflected in its navpu.

 

dr. pepper can explain this better.

 

 

sir can i talked to you on the phone or personally , i really cant understand on how to invest , my plan kasi is stop buying college plan for my kids , instead invest it nalang , kasi nag close na cap , i bought 1 for my eldest , o san sa bank pwede mag tanong? thanks

 

to start with, try to find out how much are you willing to invest and and how long can you invest it. you should know how much your expenses are and how much your savings would be on a monthly basis. once you have an idea of your finances, set aside a portion of this in an investment that is considered liquid, just in case there is an emergency in your family.

 

for example, if you have a million to invest ( and presuming your monthly income is more than enough to cover your monthly expenses), and you feel P300k is enough to set aside in a fund that can be preterminated in case you need it for hospitalization, you can then readily invest the P700k in a placement with a longer term. ask yourself what your investment horizon is - is this money something you don't wish to use in the next 5 years? then you can look at 5 year tax exempt products that will help you maximize your yield. are you hoping to use the interest of the investment monthly? then you can look for products that can pay out your interest monthly.

 

your bank should be able to find products that will suit you and your needs. all you have to do is ask.

Edited July 13, 2009 by lustfortravel

[mr.bukol]

let me give you my two cents worth.

 

A mutual fund is offered by an investment company and the funds are managed by a duly-appointed fund manager. UITFs are bank products which is normally managed by the bank's trust department. mutual funds are regulated by the Securities and Exchange Commission and only SEC-licensed salesmen are allowed to sell these while UITFs are regulated by the BSP and bank personnel are not normally required a license to be able to offer these to their clients.

 

you lose money if your selling price is lower than your cost price and you earn if the selling price is higher than your cost . since these funds are subject to fluctuations ( that is considered normal), it is normally recommended that you have a medium to long term investment horizon, say 2-3 years, before you decide to invest. you must also choose what type of mutual fund/UITF is suited for you- some people can handle a portion being invested in stocks while others cannot sleep at night due to the huge swings/volatility in price.

 

earnings from the maturity of investments in the fund are normally reflected in its navpu.

 

dr. pepper can explain this better.

 

 

 

 

to start with, try to find out how much are you willing to invest and and how long can you invest it. you should know how much your expenses are and how much your savings would be on a monthly basis. once you have an idea of your finances, set aside a portion of this in an investment that is considered liquid, just in case there is an emergency in your family.

 

for example, if you have a million to invest ( and presuming your monthly income is more than enough to cover your monthly expenses), and you feel P300k is enough to set aside in a fund that can be preterminated in case you need it for hospitalization, you can then readily invest the P700k in a placement with a longer term. ask yourself what your investment horizon is - is this money something you don't wish to use in the next 5 years? then you can look at 5 year tax exempt products that will help you maximize your yield. are you hoping to use the interest of the investment monthly? then you can look for products that can pay out your interest monthly.

 

your bank should be able to find products that will suit you and your needs. all you have to do is ask.

 

i want invest instead of buying educational plan, where can i invest it ? like 600k , savings i need it when my son reaches high school or college 12 years from now

[Dr_PepPeR]

mga masters question lang po what is the difference in mutual funds against the UITFs?

 

tsaka po I am wondering how do we actually earn from such? as far as i know there is a fund manager that manages the money to invest it in different sorts to hopefully earn from it. and then there is the price per unit at which we base "shares" of what we bought right?

Is my understanding correct that one part of earning or loosing money is when NAVPU goes up or down depending on the people in the market much like stocks do?

And also what happens to the earnings brought about by the investments of the fund manager? Do we also have dividends for UITFs and Mutual funds?

 

thanks in advance!

 

 

let me give you my two cents worth.

 

A mutual fund is offered by an investment company and the funds are managed by a duly-appointed fund manager. UITFs are bank products which is normally managed by the bank's trust department. mutual funds are regulated by the Securities and Exchange Commission and only SEC-licensed salesmen are allowed to sell these while UITFs are regulated by the BSP and bank personnel are not normally required a license to be able to offer these to their clients.

 

you lose money if your selling price is lower than your cost price and you earn if the selling price is higher than your cost . since these funds are subject to fluctuations ( that is considered normal), it is normally recommended that you have a medium to long term investment horizon, say 2-3 years, before you decide to invest. you must also choose what type of mutual fund/UITF is suited for you- some people can handle a portion being invested in stocks while others cannot sleep at night due to the huge swings/volatility in price.

 

earnings from the maturity of investments in the fund are normally reflected in its navpu.

 

dr. pepper can explain this better.

 

 

to start with, try to find out how much are you willing to invest and and how long can you invest it. you should know how much your expenses are and how much your savings would be on a monthly basis. once you have an idea of your finances, set aside a portion of this in an investment that is considered liquid, just in case there is an emergency in your family.

 

for example, if you have a million to invest ( and presuming your monthly income is more than enough to cover your monthly expenses), and you feel P300k is enough to set aside in a fund that can be preterminated in case you need it for hospitalization, you can then readily invest the P700k in a placement with a longer term. ask yourself what your investment horizon is - is this money something you don't wish to use in the next 5 years? then you can look at 5 year tax exempt products that will help you maximize your yield. are you hoping to use the interest of the investment monthly? then you can look for products that can pay out your interest monthly.

 

your bank should be able to find products that will suit you and your needs. all you have to do is ask.

 

I don't think I could do much better than LFT's explanation. You earn income if you redeem or turn in the units that you bought if the price of those units are higher than what you bought them for. On the other hand, of course you lose if the price of the unit is lower than what you bought it for. As LFT said, the earnings on the gains made by the fund manager go back to the fund and is reflected in the NAVPU or NAVPS.

[Dr_PepPeR]

i want invest instead of buying educational plan, where can i invest it ? like 600k , savings i need it when my son reaches high school or college 12 years from now

 

The best way, as LFT suggested, it to visit your bank. Since you have a long term horizon, you might want to ask the trust department so they can suggest suitable long-term investments, and you can provide for contingencies in case anything happens to you or your spouse.

[mr.bukol]

thanks , what investment is better than educational plan ? can give example of returns?

[Dr_PepPeR]

thanks , what investment is better than educational plan ? can give example of returns?

 

You can try 5-year corporate notes like SMIC, Tier 2 issuances that give 7-8% per annum net.

[crabpat]

hi mr bukol, we have a product specifically designed for your need. give me a pm.