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

iam · 768 · 236630

freefront

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^Rumor has it my MF was hit with an analyst's choice of CPG. Thus, the less than 2% return in 2013. Probably another lackluster performance for 2014( i haven't seen the report yet). It's nasty to just sit it out. There is no change in personnel either.

As for forsaking the exercise, well, as usual, nothing wrong with the concept. It's da people, is all. Parang failed relationship din yan  ;) Be grateful for the good parts. Render the bad parts for the life lessons. Being in the freezer is not an option  :hihi:


alacrity

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Guys, it may come as a surprise to you but in the long run, Exchange Traded Funds are better.

Tignan ninyo yung mga quarterly performance letters na pinapadala ng UITF's ninyo, hanapin niyo lang yung phrase na worded something like this "Past performance are not guarantees of future returns". Disclaimer nila yan para hindi sila mademanda dahl -2% ang performance nila this year pero last year nag 37%.

Ang titignan ninyo na UITF's or MF's ay yung fees nila, i-total ninyo lahat ng percentage fees, pag umabot to ng lagpas or equal to 2.0 -2.5% per annum e tumakbo ka na. Hindi nagsisinungaling ang mga studies na nagpapakita na 2/3 or MF's at UITF's ay hindi natatalo ang Index.

Ngayon nga 29% ang return from ETF's walang fees yun. Isipin mo kung parang Philequity yung fund mo pag less than P 5,000 e 3.5% ang kaltas agad sa returns mo. E kung 10 years? Tapos yearly ka maghulog ng P5,000 e di 35%! Hindi ninyo ito maririning sa mga nagbebenta ng MF's. Ang consensus ng mga academics ngayon ay negligible ang "skill" factor sa pagpili ng stocks, and all the while yun ang dahilan kung bakit ka nasa MF or UITF, for the so called skill of the "professional" stock pickers over us amateur investors.

I have to admit na meron pa rin ako individual stock picks pero unti unti nang lumalaki yung ETF port ko.

« Last Edit: Jan 18, 2015, 06:11 PM by alacrity »


freefront

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^ Ang tanong: may core holding at trading account ba yang ETF mo  :D alac, 1 yr. old na pala ETF. Mag-isa pa rin ang FMETF hanggang ngayon di ba?

To revisit:

http://www.pinoymoneytalk.com/forum/index.php?topic=45652.15

It is a closed fund so the price appreciation will depend upon demand from investors. Right?



GoodSteward

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@alacrity, thanks! May I know which etf ka meron? Under which bank? Hindi siya under ng uitf product?

@ff, fmetf is first metro etf?

« Last Edit: Jan 18, 2015, 04:09 PM by GoodSteward »


freefront

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^Yep. I  searched PSE site and it's still the only one. Matignan nga ang chart nyan kung mas mahinahon hehehe


alacrity

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@freefront

I've read their prospectus way back 2013. I don't think First Metro, which is under Metrobank will gamble with its name and take us (ETF buyers) on that slippery slope of selling something they don't have. Of course I can't prove they REALLY have it, but I think the chances they will screw us for such small peanuts is slim. Mag-isa pa rin pero meron din gumagaya gaya ng BPI's PSE Index Fund which is not a true Index Fund in the first place.

@GoodSteward

No prob, sa FMETF nga ako, kasi so far yun lang talaga ang totoong stock index fund/ETF dito sa Pilipinas. Yung sa BPI PSE "Index Fund" kasi ang laki ng fees parang usual na UITF nasa 1.5% ata, if I recall correctly. Which is against the concept of owning an ETF in the first place kasi nga kaya natatalo ng ETF ang MF at UITF dahil sa fees ng MF at UITF.

You would think that 1.5% per annum is very small to pay for "skill" pero pag susumahin mo, yung ETF 29% returns ngayon kahit walang active manager, and isa pa ilang MF at UITF ba ang may 29% returns?

 May mga nakita ako naka 30% sila pero dapat minus fees pa rin yun, so kung naka 30% ka, minues 1.5% is 28%, so talo ka pa rin!

Anyway matagal ko na kasi nabasa yung ETF's/Index Fund, bago sa atin pero sa US alam na alam na nila gamitin yan, pwede mo nga rin yan gamitin sa arbitrage kapag nagkaroon na ng short selling sa PSE.

If you want to compare ETF's to MF's/UITF's I suggest you get John C. Bogle's book, he was the one responsible for creating the Vanguard index Fund in the US, his book is called "Bogle on Mutual Funds: New Perspectives for the Intelligent Investor".
« Last Edit: Jan 18, 2015, 06:32 PM by alacrity »


LiveLoveInvest

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How about Security Bank's equity uitf? I think nasa 48% ang ytd niya last 2014. How do you compare it with ETF?

That 19% difference is something to consider :)
« Last Edit: Jan 18, 2015, 07:32 PM by LiveLoveInvest »


freefront

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@freefront

I've read their prospectus way back 2013. I don't think First Metro, which is under Metrobank will gamble with its name and take us (ETF buyers) on that slippery slope of selling something they don't have. Of course I can't prove they REALLY have it, but I think the chances they will screw us for such small peanuts is slim. Mag-isa pa rin pero meron din gumagaya gaya ng BPI's PSE Index Fund which is not a true Index Fund in the first place.

My bad  :(  I was thinking about a few members on this site who handle their ports in a mixed style. GS was in here and I remembered he posted in the Stocks section his core holdings and his trading account< presumably so he can play tsupitero once in a while. So if I go ETF, I'll probably play it that way, too, being that it is traded online and as you say, fees don't matter much.  Which means, this is not the account to be enrolled in PERA because of pre-termination penalties, blah blah blah.....

I guess I was asking in a roundabout way, being that you're the one who jumped in early, if you have been familiarized with ETF enough to say---yes you can trade ETF for profit, as opposed to holding it up to retirement.
* na brown-out yung original post ko kaya maiksi na lang yung na-post sa una. something is telling me something yata








alacrity

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@freefront

Of course you can trade them for profit, but like all speculation the chance of failing is high as the day to day price action of the market is unpredictable. However, I have a friend who did just that, albeit on a monthly timetable rather than day to day. It was back in 2014 when the ETF just came out. Instead of going up from the offering price of 100, it went down to 97, my friend bought at 97 and after some months sold at 115.

I guess in that way he was trading for quick profits, but really, it's hard to profit on a daily basis or even monthly basis, because more transactions mean more costs which is defeating the purpose of ETF's. If you really want big money, then it's better to wait for short selling to be allowed, that's IF you know how to play that game without ending up broke and shirtless because shorting is really dangerous i.e. unlimited losses. But hey whatever floats your boat, I don't judge.

And with regards to your question about investor demand dictating the price, yes it can happen but seeing as the market is efficient as it is, the price will eventually go down towards the real value.

On PERA enrollment, yes you are correct, the fees in here are negligible in the long run because you will only spend transaction costs which is 1% or even less? Certainly lower than any MF/UITF. So enrolling it in PERA won't do it much good.


GoodSteward

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http://www.abs-cbnnews.com/video/business/01/20/15/sb-equity-funds-stock-picks-2015

kabit im thor. hehe


freefront

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@freefront

I guess in that way he was trading for quick profits, but really, it's hard to profit on a daily basis or even monthly basis, because more transactions mean more costs which is defeating the purpose of ETF's. If you really want big money, then it's better to wait for short selling to be allowed, that's IF you know how to play that game without ending up broke and shirtless because shorting is really dangerous i.e. unlimited losses. But hey whatever floats your boat, I don't judge.

I'm a small time participant and short selling is not my kind type insanity. I might simultaneously post a low bid and high ask price on GTC on the same stock, both covered by my own shares and funds available because that's all my "skills" will allow me  :hihi:
Quote
And with regards to your question about investor demand dictating the price, yes it can happen but seeing as the market is efficient as it is, the price will eventually go down towards the real value.

In a scenario where the trend of the market is already priced in, and nobody is selling because it makes sense to be in there, dangling a higher bid price can tempt a human being to sell for a bit of practicing the " a bird in hand is better than the one in the bushes"  :D Take a 5 peso profit in 3 months or get rich in 30 years ( if that account is for retirement). Put back the proceeds of the sale ( the mother shares plus the earnings) when it's reasonable to do so, while putting in fresh funds-> if you are practicing PCA. We all know there will be corrections.

^It's my POV, born out of exploring the world outside of PMT and leaning towards the conclusion that the PSE is too jockeyed and corruption of all sorts is just crapping up the place.

Quote
On PERA enrollment, yes you are correct, the fees in here are negligible in the long run because you will only spend transaction costs which is 1% or even less? Certainly lower than any MF/UITF. So enrolling it in PERA won't do it much good.

Out of the question to trade it if it is enrolled in PERA. Too many paperwork, fees- not to mention the penalty clause because of the tax credit going in. But, if you are going to do Bo's Jack en Jill style, enrolling an ETF account in PERA makes sense. * February 2015- available na according to press release


bajoyjoy

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How about Security Bank's equity uitf? I think nasa 48% ang ytd niya last 2014. How do you compare it with ETF?

That 19% difference is something to consider :)

48%!!! My gosh, SECB is really making a name as a trader bank (and it seems SECB's stock price is reflective of this performance)! Sa wealth sec (philequity) sana ako papasok this year, but with this info, I got interested with SB fund bigla... thanks for the info!




bajoyjoy

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wait lang... SECB had several underwriting of IPOs last year diba? Parang yung X and another one? Is that where they scooped up that +48% performance?



GoodSteward

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wait lang... SECB had several underwriting of IPOs last year diba? Parang yung X and another one? Is that where they scooped up that +48% performance?



They "bet" on NIKL, DNL daw and it is part of their grat returns accordingto the interview on ANC.

Im not from SB ha. But I found out there banking system is so convenient. You can move UITF funds and savings online!

From uitf  money market fund, to euity fund  to savings to any uitf funds at no cost.

Minimum holding period is 7 days for all types of funds (if i remember right).

Redeeming equity funds to savings is only one day. Unlike BDO (7days!)

UITF in security bank, no more certificates, online lahat. If youre computer illeterate, you can just call your branch and they will do the transferring for you.

Manager is a friend, so naexplain sa akin ng maayos...hehe


pilyong_husband

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Hmnn..

I sent an inquiry to open UITF to SECB but no reply at all. suplado ata Trust Marketing nila :)


 


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