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If you placed a million pesos in the Philippine stock market from the start of January 2008, you would have lost 9% in January alone. If you remained invested until today, that million pesos is now worth only P780,000 - a 22% loss.

That is based on the performance of the Philippine Stock Exchange index (PSEi), a basket of 30 listed common stocks representing the overall movement of market prices and the general state of the Philippine economy.

The PSEi on March 20 closed at 2,817.58, a 22.2% decline from its original value at the start of the year.

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Here’s a list of the top performing Unit Investment Trust Funds (UITF) in the Philippines, as of February 7, 2008.

UITF is an investment product very similar to Mutual Funds. It is a “trust” product, meaning, the entity offering the UITF (the trustee) administers the fund in behalf of individuals (trustors) whose resources have been combined into the fund. It is normally offered by a bank or financial institution and, as a non-deposit product, is not guaranteed by the Philippine Deposit Insurance Corporation or PDIC.

The returns shown below are Year-to-Date (YTD) performance, meaning, from January 1 until the current date, i.e., February 7, 2008. Take note that historical performance is never a guarantee of future results.

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Markets worldwide are on a slide due to subprime lending concerns in the US. Even the Philippine stock market is not spared. After experiencing a series of all-time highs during past months, Philippine equities are currently on a downtrend. 

So if you have stocks, mutual funds, or unit investment trust funds (UITF) holdings, is it time to dispose of them, hold on to them, or buy more?

Click "Read More" to see a few PMT members' opinions.

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Several Pinoys outside the Philippines, especially Overseas Filipino Workers (OFWs), are wondering whether they can invest in mutual funds or unit investment trust funds (UITF) even if they are outside the country.

A few PMT members are reporting that it is indeed possible. Some mutual fund companies or banks offering UITFs, they say, accommodate placements although the investor cannot make a personal appearance. 

View the discussion in the thread Investing in local Mutual Fund or UITF while abroad. 

If you are a representative of a bank or mutual fund company and have information about investing while outside the Philippines, post below or in the above thread so that OFWs interested to invest can know what to do.

If only Unit Investment Trust Fund (UITF) investors matched their investment horizon with the UITFs they got into, the decline in UITF prices during the summer of 2006 would not have been that bad.

This is according to the Trust Officers Association of the Philippines (TOAP) who believes increasing interest rates was not the only factor that pulled down the net asset value per unit (NAVPU) of UITFs early this year. The panic selling of investors who were frightened by the falling prices also contributed to the UITF shakedown, the TOAP explains.

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Q. Will a separate tax be imposed on my earnings once I redeem my Unit Investment Trust Funds (UITFs) participation?

A. No, as long as proper taxes have already been collected prior to the redemption of your UITF participation. That’s according to Senen Quizon, a tax manager at Punongbayan & Araullo, who wrote the article “Taxation of Unit Investment Trust Funds (UITFs)” published in Business World Philippines on August 2006.

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You've learned what UITFs are and how they are different from mutual funds. You've decided to invest in UITFs. But are they really right for you?

By now you should have known that UITFs are not risk-free instruments and are not considered deposit products either. As such, UITF investors are not covered by the Philippine Deposit Insurance Corp. (PDIC). Loss of capital is possible, although ideally losses are turned into gains in the long run. If your foremost concern is the protection of your principal, UITFs are not for you.

UITFs are also not generally structured for those looking to make a quick gain. As seen in the UITF crash this year, taking out funds as soon as you invested it can cause drastic losses on your part. If you're looking to invest in UITFs, you should have the patience and resources to ride out its day-to-day volatilities.

In short, UITFs are suitable for investors who can part with their funds for the mid- to long-term, are not bothered by the day-to-day fluctuations of the unit price, and have the financial capability to absorb losses.

So asses yourself prior to jumping on the UITF investing bandwagon. And always remember the golden rule of investing: do not invest what you can't afford to lose!

Discuss this in the UITF Philippines thread in the PMT Forum.

[tags]UITF, UITFs, Unit Investment Trust Funds, UITF philippines, UITF primer, Bangko Sentral ng Pilipinas, PDIC, NAVP, NAVPS, NAVPu, UITF NAVPu, Net Asset Value per unit[/tags]

Both are pooled funds. Both offer higher returns compared to banks but also are not risk free. Both are measured in terms of the net asset value per unit (NAVPu) or share (NAVPS). So what’s the difference between UITFs and mutual funds?

A unit investment trust fund or UITF is a banking product that replaced common trust funds (CTFs). It is managed by the offering bank’s treasury department or group. A mutual fund, on the other hand, is offered by an investment company and managed independently by an appointed fund manager, which may or may not be related to the investment company.

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UITF stands for Unit Investment Trust Fund. The product is fairly simple on paper: the funds of several people are combined by an administrator and collectively invested into particular assets. As the assets gain or lose in market value, the individuals who pooled their funds either accrue the gains or absorb the loss. In exchange for structuring the fund, fees are charged to the individuals by the administrator. 

UITF is literally a collective fund. The nature of this instrument is that of a “trust” product. This means that the entity offering the UITF (i.e., the trustee) administers the fund in behalf of the individuals (i.e., trustors) whose resources have been combined into the fund. There is no guaranteed return for this product because the underlying investments of the fund can make or lose money.

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