Unit Investment Trust Funds (uitf)

[Dr_PepPeR]

Hi Doc Pepper,

Good Day!

 

I was wondering if oyu can help with my investment scheme on which ones are safer like UITF, Mutual bonds etc etc..I was watching a TV ad stocks on PSE awhile ago at Glorietta Makati. Just felt fascinated with STOCK TRADING too.

 

UITFs - about I was eavesdropping in one conversation b/w a the bank manager and some of his ex-OFW clients about it, He was diverting his client of not investing in this UITFs because they have too many disadvantages too.

 

I already put the little saving on buying a 2 condo studio units in U-belt which far a sound investment in real estate.

 

Hey Doc, it does seem that you already have decided on what to invest in, namely those two condo units. You still have something left over? I have problems discussing generalizations, like a 'safe' investment. Safe as to what? How much risk is considered safe for you? What I've been trying to tell everybody is that investing depends on your own parameters. 'Safe' is relative. If you wish, let's have coffee and talk about it. I can only answer specific questions on the board. I'm too lazy to type.

[misterbig7]

hi doc, sorry if i didn't back read for lack of time..

 

is there a benchmark for returns for your uitf's..a 6% to 10% roi would be nice.

 

also, do you give commissions for referrals?

 

thanks!

[Dr_PepPeR]

hi doc, sorry if i didn't back read for lack of time..

 

is there a benchmark for returns for your uitf's..a 6% to 10% roi would be nice.

 

also, do you give commissions for referrals?

 

thanks!

 

I don't have 'my' UITFs, most of the UITFs are being managed by banks. There are several and different types of UITFs being offered, with big banks usually having several types to cover different types of investment objectives. The benchmarks for different UITFs depends on their asset composition, with fixed income funds usually having MART1 plus spread for a benchmark. For equity funds, they usually use the PHISIX as their benchmark. The object of most fund managers is to outperform the regular investment vehicles so the benchmark is also a moving benchmark. For fixed income funds, at this time a 6-8% p.a. ROI is the norm, and a lot higher for equity or balanced funds.

 

Normally UITFs do not give commissions but I heard that Mutual Funds gives commissions to agents.

[Talley]

I don't have 'my' UITFs, most of the UITFs are being managed by banks. There are several and different types of UITFs being offered, with big banks usually having several types to cover different types of investment objectives. The benchmarks for different UITFs depends on their asset composition, with fixed income funds usually having MART1 plus spread for a benchmark. For equity funds, they usually use the PHISIX as their benchmark. The object of most fund managers is to outperform the regular investment vehicles so the benchmark is also a moving benchmark. For fixed income funds, at this time a 6-8% p.a. ROI is the norm, and a lot higher for equity or balanced funds.

 

Normally UITFs do not give commissions but I heard that Mutual Funds gives commissions to agents.

 

Yes, the Doctor is correct in that Mutual Fund companies give commissions to licensed agents. As for referral fees, that would be between you and the particular agent. I don't think they're officially allowed to offer it though.

[misterbig7]

thanks for the heads up doc, i'll let you know if my clients are interested..

 

please feel free to send me some clients too..i do give large commissions for property referrals.

 

thanks again!

[Dr_PepPeR]

thanks for the heads up doc, i'll let you know if my clients are interested..

 

please feel free to send me some clients too..i do give large commissions for property referrals.

 

thanks again!

 

No problem sir, just ask if you need more info. For the property referrals do you mean buyers or sellers or property for sale or all of the above?

[misterbig7]

No problem sir, just ask if you need more info. For the property referrals do you mean buyers or sellers or property for sale or all of the above?

 

all of the above..we can help you sell as well.

 

thanks again..

[koolkalangxyz]

I'm thinking of going into UITF's... Hopefully somebody could answer my questions below...

 

1. Would it be better to invest in two kind of funds such as equity fund and balance fund, or just put all your money in a single fund.

2. Is it advisable to invest in two different banks' UITF's or just a single bank?

3. For a newbie investor would it be advisable to invest a significant amount or should I test the water first with just the minimum required funds?

 

thanks a lot...

Edited December 28, 2006 by koolkalangxyz

[Dr_PepPeR]

I'm thinking of going into UITF's... Hopefully somebody could answer my questions below...

 

1. Would it be better to invest in two kind of funds such as equity fund and balance fund, or just put all your money in a single fund.

2. Is it advisable to invest in two different banks' UITF's or just a single bank?

3. For a newbie investor would it be advisable to invest a significant amount or should I test the water first with just the minimum required funds?

 

thanks a lot...

 

1. It would depend on your investment objective. An equity fund has more than 50% of its investments in stocks while a balanced fund has less than 50%. An equity fund would be more volatile in terms of ROI but again the potential for high gains is there. So, again, what is your investment objective? You might be better off with sticking to purely fixed income funds.

 

2. Advisable in terms of what? For convenience you might want to try one bank. If you want to compare service and performance then get more than one bank.

 

3. UITFs are long term in nature so I suggest you only put in what you think you can leave off for more than a year. You can put the minimum in if you only want to test the waters in terms of service, updates, free materials etc.

[mike168]

hi dr pepper ask ko lang sana if youre a banker ba parang rami mo kasi lam sa uitf's hehe

[anarkista]

Hi, Doc Pepper,

 

I got the info below from UITF.dom.ph. I used their calculator to check how my investment is going on so far. Does the figures below say I should have invested in ING Bank instead of BDO? I am not sure if I still have to check other details than the figures already mentioned below..

 

 

BDO Peso Bond Fund

Investment Date NAVpU 1,210.422800

Cut-off Date NAVpU 1,222.820500

Current Market Value 151,536.37

Unrealized Gain/(Loss) 1,536.37

No. of Days Lapsed 27 days

Return on Investment (Absolute) 1.0242 %

 

ING Bank Peso Bond Fund

Investment Date NAVpU 148.380386

Cut-off Date NAVpU 152.010541

Current Market Value 153,669.78

Unrealized Gain/(Loss) 3,669.78

No. of Days Lapsed 27 days

Return on Investment (Absolute) 2.4465 %

[Dr_PepPeR]

hi dr pepper ask ko lang sana if youre a banker ba parang rami mo kasi lam sa uitf's hehe

 

Partly sir, Jack-of-all-Trades, master of none.

[Dr_PepPeR]

Hi, Doc Pepper,

 

I got the info below from UITF.dom.ph. I used their calculator to check how my investment is going on so far. Does the figures below say I should have invested in ING Bank instead of BDO? I am not sure if I still have to check other details than the figures already mentioned below..

BDO Peso Bond Fund

Investment Date NAVpU 1,210.422800

Cut-off Date NAVpU 1,222.820500

Current Market Value 151,536.37

Unrealized Gain/(Loss) 1,536.37

No. of Days Lapsed 27 days

Return on Investment (Absolute) 1.0242 %

 

ING Bank Peso Bond Fund

Investment Date NAVpU 148.380386

Cut-off Date NAVpU 152.010541

Current Market Value 153,669.78

Unrealized Gain/(Loss) 3,669.78

No. of Days Lapsed 27 days

Return on Investment (Absolute) 2.4465 %

 

Yes, if you are using that particular time frame, 27 days, to go in and then go out, of course you would have doubled your ROI had you gone into the ING fund. I suggest looking at it over a longer period, maybe the shortest should be 180 days. This would give you a better feel on how the investment manager is performing. Sometimes it is a matter of volatility. Look at BPI's UITF, when it goes up, it goes way way up but when it goes down, it goes really down too. It could be that if the fluctuations of the NAVPUs are not as volatile, you would have a better chance on realizing a better return on a fund that does not seesaw the value of their NAVPUs because if you go out when it is really down, well, you lose.

[golfer697]

Sir, I hope you will bear with me on this. UITFs operate on the mark-to-market principle which means that the assets of the fund are valued at the price they are sold on the financial market. This valuation is done every day so in some ways they behave like stocks in that the values can go up or down on a daily basis. Now, since UITF funds are relatively new, they have a lot of long term investments, which will provide higher rates than short term investments. If the interest rates go down, the demand for long term investments go up, since investors would like to have the higher yielding instruments for a longer term. The opposite happens when interest rates go up. Since demand for short term instruments will thus increase (because investors would like to have the option to shift to other higher yielding investments when the instruments they hold mature), demand for long term goes down, and thus, the market price goes down. Interest rates were either moving down or sideways until a few days ago when it started moving up. Some factors also that may have affected the financial market is that the government has not been borrowing too much (in the form of GS) and the price of oil is still up. NAVPUs started going down as a consequence but the fund managers have started to sell their long term instruments since then so the NAVPUs of most of the UIT Funds will start to go back up as the assets with lower values are taken out of the fund. I know it is very technical but that is really the best I can do. Hope it helped.

[golfer697]

Sorry for that mistake, just new here though I have signed up sometime ago. My question for Dr. Pepper is given your explanation, what would be the effect of the planned central bank cutback on interest rates on the following: 1) Peso UITFs 2) Dollar UITFs 3) ROPs ? Will UITF navpus go down? Thanks Dr. Pepper, from what I have read so far, you seem to be an expert in this field and have been a great help to everyone!!! More Power!!!

[ballybal]

Sir, Ok ba maginvest ngayon sa Balanced Fund or Equity Fund? Parang ang taas kasi ng stocks. Mag cocontinue pa kaya ang pagtaas or bababa after some time?

 

Salamat po.

[living well]

Hello Dr. Pepper,

I'm back!

I would like to ask if you have any info on this:

 

BDO Smart Money Dollar Fund Gold

This is a dollar-denominated common trust fund for high networth dollar investors. Minimum and subsequent investment is $10,000.

 

It states that it is a common trust fund. But hasn't CTFs been scrapped and has been replaced by UITFs?

[anarkista]

Thanks, Doc.

 

Got your point. I am thinking of switching to ING because of their history. Taas ng returns pag tumagal ang investment mo! Well, I'll be frequentky visiting this site for uodates.

 

Thanks ulit!

[jerzz]

Partly sir, Jack-of-all-Trades, master of none.

 

Merong trade na master ah Starts with F :evil:

 

Lets talk about this uitf when we meet together with my friend Talley

[Talley]

Merong trade na master ah Starts with F :evil:

 

Lets talk about this uitf when we meet together with my friend Talley

 

Hi jerzz,

 

Kelan at saan?

 

Long time no see....

 

Regards,

 

Talley

[Dr_PepPeR]

Sorry for that mistake, just new here though I have signed up sometime ago. My question for Dr. Pepper is given your explanation, what would be the effect of the planned central bank cutback on interest rates on the following: 1) Peso UITFs 2) Dollar UITFs 3) ROPs ? Will UITF navpus go down? Thanks Dr. Pepper, from what I have read so far, you seem to be an expert in this field and have been a great help to everyone!!! More Power!!!

 

Good day sir! The behavior of NAVPUs of Peso UITFs vs. the interest rate is an inverse one, so that if interest rates go down, NAVPUs will generally go up. Thus, in an environment of low interest rates, expect the Peso UITFs to go up and up.

 

For Dollar UITFs it will be harder to predict but if Peso interest rates continue to fall, so much so that US Dollar investments become more attractive, then as US Dollar interest rates go up, then Dollar NAVPUs will fall. This would work for local Dollar investments like Time Deposits but there are many other factors that affect Dollar UITF NAVPU behavior, and it would depend on where a UITF fund is invested in order to make an educated guess based on fundamentals. Traditionally, most Dollar UITFs are invested in Dollar ROPs so it would be best to look at the contents of the Dollar UITF and compare its behavior with the ROPs.

 

Short term ROPs will usually go down while long term ROPs will usually go up on a low interest rate scenario.

 

Hope that helps, just post again if you need more clarification.

[Dr_PepPeR]

Sir, Ok ba maginvest ngayon sa Balanced Fund or Equity Fund? Parang ang taas kasi ng stocks. Mag cocontinue pa kaya ang pagtaas or bababa after some time?

 

Salamat po.

 

Yes, now would be a good time to invest in equity or balanced UITFs. Market fundamentals are good and the economy is still going strong. I expect this performance to continue until the start of the 2nd quarter of 2007, that is, until the local elections where investor confidence could change directions again. Try to wait until chinese new year when I expect stocks to dip a bit then continue to trend upwards. Just mah 'pinion of course.

[Dr_PepPeR]

Hello Dr. Pepper,

I'm back!

I would like to ask if you have any info on this:

 

BDO Smart Money Dollar Fund Gold

This is a dollar-denominated common trust fund for high networth dollar investors. Minimum and subsequent investment is $10,000.

 

It states that it is a common trust fund. But hasn't CTFs been scrapped and has been replaced by UITFs?

 

I checked the UITF consolidated reports and I only found 2 BDO US Dollar UITFs, their Dollar Money Market Fund and Dollar Bond Fund. It is quite possible that that is their old UITF Dollar Fund. But you are correct in that the CTFs were supposed to have been migrated into the UITF by October of last year. I'll try to check again their webpage if that fund is still up and running.

[Dr_PepPeR]

Merong trade na master ah Starts with F :evil:

 

Lets talk about this uitf when we meet together with my friend Talley

 

Fencing? Fishing? Farting? Feuding? I give up. Will be glad to meet up with you and Talley sometime soon. Good luck on your own 'F' adventures!

[jerzz]

Fencing? Fishing? Farting? Feuding? I give up. Will be glad to meet up with you and Talley sometime soon. Good luck on your own 'F' adventures!

 

Fishing Naturally, in a Fully Loaded Aquarium

 

Just made a UiTF investment with no holding period. How do I know When to pull it out?