How to invest in UITF?

More than 3 years ago, I learned how to invest in the stock market. At first, I was hesitant to pour in my money into my broker’s account (COL Financial) to directly invest in stocks. I did it slowly because in my mind it could be a scam and besides I don’t even know somebody who invests in stock market. In short, I was really scared.

Since I’m comfortable with the banks, I decided to move some of my cash and buy UITF. So I told myself “It’s just a test”. Actually I really don’t know UITF back then because I asked the bank’s counter for mutual fund. They told me that banks don’t offer mutual funds but UITFs. By the way, the bank’s representative I asked is from BDO.

So what are UITFs?

UITFs are investment products where investor’s funds are pooled and invest in government bonds, stock market or a combination of both. The funds are being managed by professional managers so you don’t have to worry about them.

In UITF, you buy NAVPU (Net Asset Value Per Unit) based on current market price which is also a fluctuating value based on the market performance. This is similar to “shares” in stock market. So when stock market is down, this NAVPU is also lower.

Types of UITF

When I asked for UITFs, the banker offers me four types which are described below:

  • Balanced fund – investment is mixed with equities (stock market) and fixed-income securities (bonds)
  • Bond fund – an investment in fixed-income securities such as government bonds or a giant corporations such as Ayala
  • Equity Fund – an investment fund primarily in stock market. If you are going for a long-term investing, this is the best choice. For example, I choose this for my daughter’s college education.
  • Money Market Fund – investment fund in short-term which has a maturity of one year or less

Today, when I visited BDO website, there are a total of 9 different types of UITFs available. Some of them are in dollar denomination.  BPI is also offering UITFs.  Probably the main advantage of BPI UITFs is the removal of the holding period.

So how do you invest in UITFs?

Investing in UITFs is pretty much easy I would say. In my case, I just drop by to the branch where I opened my savings account and told them that I want to invest in UITF. I was assisted and my fund was moved from savings to the appropriate fund of my choice and that’s it. The minimum fund to invest in BDO UITF is 10,000.

Take note, BDO UITF has holding period. In case of Equity Fund, the holding period is 30 days. If you decide to pull your money out within the 30 days holding period, 1% of original amount will be deducted. If you are a long-term investor, you can ignore this policy.

How do you earn in UITF?

Below is my BDO Equity Fund certificate. I invested 20,000 pesos with a total of 84.5944 units and a NAVPU of 236.4221. It’s easy to do the calculation if you want to know how much you earn.  To compute for the current market value of this investment, multiply the total number of units (84.5944) by the current market value of NAVPU.  The value of NAVPU is updated daily and available in BDO’s website.

bdo-uitf-equity-fund

At the time of this writing, the NAVPU for BDO Equity Fund is equivalent to 414.6993. So the current market value of my investment is already 35,081.23. Wow! That’s a profit of 15,000 pesos after 3 years which is around 75%. That’s a huge amount of earnings compared to savings or time deposit.

So if you’re comfortable investing your money in the bank and you’re tired of being a saver, start investing in UITF now!

Any thought? Ideas?  Feel free to comment below.  If you find it useful, consider sharing it in facebook so others won’t be left behind.

16 thoughts on “How to invest in UITF?”

    1. Hi Anna,
      Thanks for dropping by. Currently I don’t have investments in sunlife but based on the online poll in other websites, they are the best in managing equity funds. For life insurance I have it in Philam. You may want to read my post about it here.
      Happy investing!

    1. Hi Anna! If you’re investing for a long term like me, you may open an equity fund account. For me I choose BDO since I already have an existing account to them. Just ask them for assistance. The minimum investment (initial) is 10,000 pesos. You can also avail of their Easy Investment Plan where a minimum additional investment can be automatically deducted to your savings account or you may also add manually later anytime you want. God bless!

  1. Hi! Did you just leave your 20000 pesos there as your initial investment? or you regularly invest a certain amount after investing 20000 pesos?

    1. Hi Lester..yes I just leave it there since it was just parked for so long already before I learned about investments. Since then I didn’t fund it anymore and directly invest my money myself.

  2. Hi, I would like to ask the opening and closing of the market, so I can monitor if the NAVPU if higher or
    Lower to determine if it is a good time to buy. Thanks

  3. I have a query about BDO EIP, I decided to invest for 1k every month regularly, However, the NAVPus are ranging from 3000-4000. Is it still a good decision since I’m going to let it stay there for 3 to 5 years?

    1. Hi aRLo,
      I’m not sure on the answer about your BDO EIP which I guess is a balanced fund based from the NAVPU. Better ask BDO for the certificate of participation from time to time to confirm that. For me it’s still good to let it stay there for 3 to 5 years than park it in time deposit account. I remember my Balanced Fund in BDO 4 years ago which I got the NAVPU around 2,700+ and today it’s 3,600+. That’s around 33%. No banks will give us that earnings 🙂

  4. Hi, I went to a BDO branch to open a savings acct and UITF- Fixed income. I would like to ask how do you transfer fund to top up or subscribe to your UITF acct, do I have to go to their branch again to top up or I can do it online?

    1. Hi Van,
      Thanks for dropping by. I believe there are two options for the top up of BDO UITF. First, is to go to their branch again just like you mentioned and another option is the auto-debit. The amount will be deducted automatically from your BDO savings account. They call this EIP (Easy Investment Plan). Happy investing!

  5. I was confused….
    Ex. If I have open one UITF account….that uitf account I can use it in any bank where I want to invest in and with that my one uitf account I have I can use it to open an uitf as many kind of bank I want like ex. BDO UITF SECB UITF and BPI UITF…
    And also in BDO equity fund and BDO EIP Equity fund with auto debit….is the same way or not? I mind if not..so means I can open like in BDO equity fund 50k then so I can still open that EIP Equity fund with auto debit in my savings account…I hope u could enlightenment me with questions regarding this matter…Thank u in advance and sorry about in my English.

    1. Hi Mileth,
      In BDO EIP Equity fund, your account is automatically funded using auto debit feature on your bank account. BDO Equity fund is the same without the auto-debit feature. Mine is a BDO Equity fund – I fund it whenever I want or have an available fund. Happy investing!

  6. hi,

    I am lost. lol. I am a newbie at this and it is articles like this that give me info on how to proceed. I have a certificate for 10k++. (BDO says they do a “spinoff” once your EIP reaches 10k, then they give you a certificate). So, is the cash value of my certificate the one indicated on the certificate itself (like it is based on the value of the units on the day it reached 10k) or is it based on the value of the UITF on the day that I redeem it (based on the units of the certificate and the value of it on the day that i redeem it)?

    – I am investing 2k per month on different dates (15th and 30th at 1k each) should i keep it this way or just merge them into one?
    – If i do redeem it, Can I just get the interest and reinvest the 10k?

    Appreciate the help.

    1. Hi RJ,
      Unfortunately I don’t have multiple certificates in BDO but the way I see it, you can sum up all the units’ of your certificates and “merge” them into one. Then for you to check the market value of your investment, just multiply it with the current NAVPU. If you want to redeem only the “interest”, you can manually divide your 10,000 pesos (assuming this is your total investment) with the number of units. The units left with be your “interest” or earnings. You may then ask the bank if you can redeem these units and convert them into cash. The NAVPU will be dependent on the teller if booked on the same day. I believe they have “cutoff” for this so you need to inform them early in the morning. In BPI UITF which I would suggest, this is done very easily online using their app. You can just input the amount you want to redeem after checking how much your money earned. Hope this helps.
      Happy investing!

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