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How to Invest in UITF (Unit Investment Trust Funds) - Part 2

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tiongky77

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Hi there, I'm a newbie who invested with BDO UITF since November 2012, more specifically BDO equity fund, which so far has done very well. I just have a query:

I noticed, and also read from a few forums, that equity is dependent on the PSEI performance. Please correct me if i'm wrong, but this would mean that if PSEi did well for that day then our equity would show an increase as well, is this accurate? The reason i asked is because there were 2 occassions in the past 2 weeks where this didn't happen. Just last week I saw the PSEi did well but my BDO equity went lower and yesterday PSEi showed -0.29% change but my equity went up. I would just like to know why this is the case of if there are other factors to consider in investing with UITF/Equity funds.

Thanks in advance


mxherr5

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Not exactly but most of the time, that statement is true.
If the market in general is going up then all mutual funds and
UITFs would general also be going up and vice versa.

What happened with BDO is perfectly normal.
It just means that the stocks it holds didn't perform like the PSEi.

It probably has assets in some mining company which isn't in
the PSEi and the stock didn't perform well. Those sort of scenarios.


mxherr5

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@gabo hahahaha my sentiments exactly.
baka kaya tinanggal ang holding period.
To attract more clients kahit may potential mas magiging worst ang
performance nila, total their performance isn't that
good in the first place :p


true_blood

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Why is there no front / back load you have to pay sa mga UITF compared ot MF's? 

Sa MF ba, if I invest 100K, and I go for the front sales load (2%), bawas kagad pera ko, meaning 98K nalang kagad pera ko initially?


cathycathy

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Hi,

 Dependent po sa PSE ang equity fund ksi ang fund composition nito eh 94% stocks while remaining is sa deposits na. 30% sa holdings 18% sa financials 18% industrial and so on :)


wintan2006

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             ^^true blood...the answer is yes po to your question. :)


mxherr5

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to add to wintan's reply. yes pero you forgot the VAT :p

@trueblood, kasi ang main distribution channel ng mutual fund
ay through agents at may commission.

Sa UITF, yung bank personnel lang ang nagaasikaso.

That's why may sales load sa mutual funds.
Pero its all fair naman kasi kadalasan yung mga sa banks, walang
alam sa UITF while yung mga agents sa MF, knowledgeable sila
sa products nila. :D


true_blood

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tnx sa reply.  If I do alot of ins and outs (investing and redeeming) it will hurt me kung sa MF? kasi of the loads? tama ba.

agents are not the fund managers, right?

Also is it wise to put in my money on a lump sum, specially now? 


tiongky77

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Thanks, mxherr5  :D

Any forecast for the coming months if our UITFs or our PSEi would continue to improve? Any guesses if our SABA issue would cause potential problems as well as the coming elections?


mxherr5

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@ true, yes pero most UITF while having no entry fee, eh may holding period
sila pero its usually short lang naman, hindi tulad ng holding period ng mutual funds.

Ang BPI UITFs lang ang walang holding period.

- That's correct, agents are the ones distributing the funds, meaning sila ang nagbebenta
fund managers ang humahawak sa pera ng funds at sila nag iinvest.

- I tried to take the market conditions while investing.. tried it for 6 months.. It was too
troublesome. I'll just cost average myself to wealth. less stress :D




wintan2006

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         ^^ true blood , pansin mo taas ng market ngayon,i guess it is not wise to put lumpsum,if i were you i will cost average muna at pag bumaba ang market ng around 10% ,tsaka ka mag lumpsum.Unless,you are going to invest in bond funds where lump sum of 100k a month won't hurt kasi pataas naman ang trend nya though slow lang.

        This is how i do it:  kunwari lang to ha

      DATE          NAV              PLACEMENT
      JAN              3.3                 1OK
      FEB             3.5                  10K
      MARCH        4.1                  10K
      APRIL           3.8                  15K to 20K
      MAY             3.2                   50K
      JUNE            2.8                  50K to 200K
         
     P.S.   mag lump sum ka pag bumaba ang market ng 20% to 30%. dagdag ng dagdag ang placement habang pababa ng pababa ang market.

        I monitor my funds every day,It only takes 2 minutes of my time to see the NAVP of my fund.:)


true_blood

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^^my problem is I have to leave the country, so I have to make a decision if ill opt to put lump sum now, as I dont want to just park my money in SA.  I will come back after a few months though
« Last Edit: Mar 14, 2013, 06:14 PM by true_blood »


sphinxz

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@true_blood
ikaw lang po ang makakadecide if you want lump sum or cost average. either way, possible naman sya. if you decide for CA, deposit mo lang sa SA then schedule mo ang cost average payments sa online facility nila. or if you want, access mo lang ang online account mo kahit nasa abroad ka na then do the manual topup anytime you want.


true_blood

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tnx.  UITF / MF are not compounding right?  Whatever the final NAV is to be computed just from the principal (all the principals if doing cost ave.), all the ups and downs in between doesn't matter, just the last NAV during redemption. 

So my question is, once I see reasonable interest earnings, I'll redeem, them at the same day I got the money, I'll put it in again, orig. principal + interest, in that way I can do compounding, my interest will further earn interest.  Is this a good strategy?


wintan2006

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                  ^ true_blood,it doesn't work like that,that practice is only good for TDs which has fixed interest rates.

                  month       NAV
                   Jan           1.2
                   Feb           1.4
                  march         1.65
                  If you sell your units bought at 1.2 last Jan and place it (principal and interest) in March at 1.65,edi mas napamahal ka pa.you won't be maximizing your earnings if you're going to go in and out of your fund.just leave your money there for at least 5 to 7 yrs or take out the money if you need it,if not,just stay.in short, mag co-compound yan if your principal and interest stay in your fund pag paakyat ang market.

                 


 


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