Stocks Vs. Mutual Funds Vs. Uitf Vs. Pre-need

[loafer]

Best investment right now is the stock market.

[jerzz]

If you are confused about which investment instrument is right for you, consider attending the First Financial Planning Expo this weekend at the S.M. MegaTrade Hall. It will be from September 1 to 3 and all industries will be represented.

 

Hello Talley:

 

Masyado pa itong matagal, paki text na lang ako pag malapit na.

 

I don't want to miss this.

 

See you all hopefully

[VentureMaker]

It depends on your investment's time horizon and your appetite for risk. Stock are more volatile but have great growth potential.

[wek1012]

can someone enlighten me about fees of uitf vs mutual funds. medyo nalilito lng ako. is sales load of mutual funds a one time thing or charged even when you make additional investment. also are they taxable? which is better investment assuming uitf A and mutual B will give a similar YTD return .

[Dr_PepPeR]

can someone enlighten me about fees of uitf vs mutual funds. medyo nalilito lng ako. is sales load of mutual funds a one time thing or charged even when you make additional investment. also are they taxable? which is better investment assuming uitf A and mutual B will give a similar YTD return .

 

I'm not quite sure how often the sales loads of mutual funds are charged, I would say it would depend on the mutual fund. Most of the MFs I know charge it only on the initial investment. UITFs do not charge sales load if they are banks, since they rely on their branch network and their own advertising budget for the sales cost. Most funds whether an MF or UITF pay the final withholding tax on their investments so the income realized should be net of taxes. I will inhibit myself from discussing which is the better investment since I was the one who started a UITF thread.

[bikerider]

can someone enlighten me about fees of uitf vs mutual funds. medyo nalilito lng ako. is sales load of mutual funds a one time thing or charged even when you make additional investment. also are they taxable? which is better investment assuming uitf A and mutual B will give a similar YTD return .

 

 

as far as i know, mutual funds charge a certain percentage up front (sales load) for every investment that you make.

 

In my case, I have backloaded my sales load (5 years I think) so that if my investment is still there after the five years or more, I will no longer have to shoulder the sales load. Also the sales load decreases for every year that I do not move my investment.

 

advantage for the mutual fund I have is that additional investments are in increments of 5k, so its easy to add on a little every time.

 

i think that income made from both instruments are taxable.

 

 

I have one question however, has anyone done any analysis with regards to the performance of uitf's and/or mutual funds of different financial institutions (banks, insurance companies, etc)?

[Talley]

can someone enlighten me about fees of uitf vs mutual funds. medyo nalilito lng ako. is sales load of mutual funds a one time thing or charged even when you make additional investment. also are they taxable? which is better investment assuming uitf A and mutual B will give a similar YTD return .

 

For Mutual Funds, the sales loads are charged every time you make a placement. For example, you make an initial placement of 10,000 pesos; if you're sales load is 2.2%, then you will be charged 220 pesos and your net invested amount if 9,780 pesos. Now, if you make another placement, let's say for 20,000 pesos, a couple of weeks later, then you will be once again charged 2.2% For UITF's I defer to Dr. Pepper's explanation above.

 

On taxes, most MF's are already taxed at the source so there are no additional taxes. (Feel free to correct me here.)

 

On which is better -- it would have to depend on what you are looking for. For some people, UITF's are better, for some, MF's. Assuming a similar return, a person's choice would be determined by the following:

 

First, accessibility. If you live near a bank branch or have a neighbor who deals in MF's, it makes investing much easier. This is because it becomes easy to deposit or withdraw if you can easily talk to your agent. Bad trip ang fund, no matter the performance pag hindi mo naman makuha pera mo. Imagine if you live in Fairview tapos taga Alabang agent mo.

 

Second, minimum placements. Some funds have high minimum requirements and long holding periods. Find a fund that fits your budget and your timeline. If you can't afford a fund, wag mo ipilit.

 

Third, risk profile. Some funds carry more risk due to the nature of their placements. So, if I had two funds that gave the same return, I would pick the one with lower risk.

 

Hope that helps.

[G.I.]

while there is no sales load for UITF, Offer NAVPU for some banks (i am not sure for others) are higher than their current value by almost 2%, e.g current NAVPU - 350, Offer NAVPU 355. i.e you will buy the unit at P355 not 350. For MF the NAVPS is the market value. In effect, this is is the sales load for UITF. So better to compare which banks are offering lesser Offer NAVPU.

[Dr_PepPeR]

For Mutual Funds, the sales loads are charged every time you make a placement. For example, you make an initial placement of 10,000 pesos; if you're sales load is 2.2%, then you will be charged 220 pesos and your net invested amount if 9,780 pesos. Now, if you make another placement, let's say for 20,000 pesos, a couple of weeks later, then you will be once again charged 2.2% For UITF's I defer to Dr. Pepper's explanation above.

 

On taxes, most MF's are already taxed at the source so there are no additional taxes. (Feel free to correct me here.)

 

On which is better -- it would have to depend on what you are looking for. For some people, UITF's are better, for some, MF's. Assuming a similar return, a person's choice would be determined by the following:

 

First, accessibility. If you live near a bank branch or have a neighbor who deals in MF's, it makes investing much easier. This is because it becomes easy to deposit or withdraw if you can easily talk to your agent. Bad trip ang fund, no matter the performance pag hindi mo naman makuha pera mo. Imagine if you live in Fairview tapos taga Alabang agent mo.

 

Second, minimum placements. Some funds have high minimum requirements and long holding periods. Find a fund that fits your budget and your timeline. If you can't afford a fund, wag mo ipilit.

 

Third, risk profile. Some funds carry more risk due to the nature of their placements. So, if I had two funds that gave the same return, I would pick the one with lower risk.

 

Hope that helps.

 

Thanks Talley, I haven't really looked at a Mutual Fund yet and I learned something there. You are of course correct about taxes being withheld at source for the investments of most MFs and UITFs. The BIR tried to impose income tax on the proceeds from redemptions on UITFs but the banks came out with a position paper to oppose it, using the tax withheld at source argument. The BIR did not pursue this course of action so I suppose they accepted this.

 

while there is no sales load for UITF, Offer NAVPU for some banks (i am not sure for others) are higher than their current value by almost 2%, e.g current NAVPU - 350, Offer NAVPU 355. i.e you will buy the unit at P355 not 350. For MF the NAVPS is the market value. In effect, this is is the sales load for UITF. So better to compare which banks are offering lesser Offer NAVPU.

 

Could you tell me which UITFs have offer NAVPUs? As far as I know this is not allowed.

[bachelor25]

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[whip]

hay.. im an ofw and di ko sure paano mag-invest lalo na sa economy ng pinas?? anu ba talaga ang magandang investment. :sleepysmiley03:

[teban]

HI guys,

 

I would like to ask what you think is the best investment strategy which is a one time deposit stuff for an amount of about 50K.

 

would it be better for me to go for banks or would it be better for me to go for philam or sunlife?

 

I am also willing to try the high risk types which are supposedly yield higher interest

 

Thanks in advance!

[joss]

ano ba ang epekto sa NAV ng isang open ended MF kung biglang madami ang na dagdag na shares meaning madaming nag invest? parang malamang mapipigilan ba pag taas ng NAV? ano naman kaya epekto pag may nag labas na maraming pera sa MF mag improve kaya ang NAV?

[Dr_PepPeR]

ano ba ang epekto sa NAV ng isang open ended MF kung biglang madami ang na dagdag na shares meaning madaming nag invest? parang malamang mapipigilan ba pag taas ng NAV? ano naman kaya epekto pag may nag labas na maraming pera sa MF mag improve kaya ang NAV?

 

Actually the behavior of the NAV really depends on what the market does and how the fund manager deals with it. Only when there are unusually excessive purchases or sales of MF shares could there be an effect on the NAV. Even then, the movement of the NAV could be down or up. If the MF has a lot of investible funds, then they might get better investment outlets. On the other hand, if there are excessive withdrawals, the fund manager may be forced to sell off at a loss the securities held by the MF.

[joss]

yung sa redemption talaga ako na tu turn off sa mga mutual funds dito sa pinas unlike sa lets saudi pag labas mo sa banko kuha mo na pera mo kung gaano ka bilis mag pasok ng pera ganun din pag labas. dito sa pinas ang daming ka badingan ng financial institutions. sana maawa sila sa mga investors.