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Mutual Funds or UITF.. Need your advice.

josh0716 · 24 · 7621

josh0716

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on: Aug 11, 2014, 12:46 AM
Hello to everyone.

Newbie here and  in need of experts advice. I am willing to invest 1M but still unable to decide which type of invstment products to choose from. (Mutual funds or UITF). If you are in my shoes which one do you choose and why. Any inputs is much appreciated.

Below is my investment profile.

How much to invest: 1Million
Investment horizon: 3 to 5 years
Risk Profile: Moderate
Purpose of investment. Increase savings


DonT

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Reply #1 on: Aug 11, 2014, 08:22 AM
Basically they are almost the same. there are almost the same MF products available as there are UITFs.

The better question for me is which among the MF or the UITF companies you want to invest on.

If you ask me...

First -
In general, get one from a bank who is nearest your place of work or residence. Search here in PMT from the last few years who are the best performing Funds Managers. You do not need to select the 1st. It always vary. try to get one within the top 5.

Second-
Do you invest 1M one time? I think you should not. do it in tranches. We do not know if the market will go down 3 months from now. It maybe wiser to invest later. But we cannot postpone indefinitely otherwise, you risk missing also the opportunity now should the market go up.
So again, i would recommend do it in tranches or parts. maybe 250 at a time...or 200 or 100..its up to you.

Third
Once you have determine how much you want to invest. Break them down in smaller pieces. Lets say you decided to invest 500K or 200K. You can opt to get certificates in 50K denominations. In this way, should you need to redeem a small amount in the future, you only need to redeem one certificate, instead of redeeming the whole lot. That 50K certificate now could be 100K already in 5 yrs.

Hope that helps.


joshboz

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Reply #2 on: Aug 11, 2014, 09:24 AM
nice im in the same boat i with josh, im also newbie just started recently and still reviewing the trends almost everyday...  i have atleast 1.5 M to launch (just waiting for the right time) but in my case i am only thinking to diversify among the uitf equity products..my only limit and problem is im ofw...so buying and selling at the right time is an issue for me...so far ive learned from this forum that buying/selling online navpu is restricted with metrobank and bpi... i wish there will be more bank to offer the same in the future.........any info if AB capital equity fund can serve my benefit? no idea if any other ofw pmters have tried?


DonT

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Reply #3 on: Aug 11, 2014, 10:34 AM
nice im in the same boat i with josh, im also newbie just started recently and still reviewing the trends almost everyday...  i have atleast 1.5 M to launch (just waiting for the right time) but in my case i am only thinking to diversify among the uitf equity products..my only limit and problem is im ofw...so buying and selling at the right time is an issue for me...so far ive learned from this forum that buying/selling online navpu is restricted with metrobank and bpi... i wish there will be more bank to offer the same in the future.........any info if AB capital equity fund can serve my benefit? no idea if any other ofw pmters have tried?

Buying and Selling UITF's is not really advisable. Especially if you are an OFW.
Since you want to do Buy and Sell...or Trading of investments...i think stocks would be more appropriate for you. Higher gains..Higher risks..

UITFs has lesser risks..and of course lesser gains compared to stocks.


BurgerSteak

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Reply #4 on: Aug 11, 2014, 10:53 AM
Hi, I suggest the following:

1. Go with UITFs as banks charge less compared to mutual funds companies (the advantage of having branches as opposed to agents selling mutual funds).

2. Stay away from bond funds for the meantime. Interest rates are expected to go up due to inflationary pressure. There's a negative correlation between interest rates and bond prices, meaning if interest rates go up, bond prices would go down. Sure for the past few years, bond funds have performed well, but IMO, it won't happen this year.

3. Given your time horizon and your goal of increasing your savings, your best bet would be Equity Funds. You just have to ask yourself, can you see yourself having a paper loss of Php 10,000 (1% of Php1MM) in just one day? Stocks are very volatile so just make sure you can still sleep comfortably at night in case prices go down continuously.

Hope this helps.

« Last Edit: Aug 11, 2014, 11:16 AM by BurgerSteak »


joshboz

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Reply #5 on: Aug 11, 2014, 11:22 AM
Buying and Selling UITF's is not really advisable. Especially if you are an OFW.
Since you want to do Buy and Sell...or Trading of investments...i think stocks would be more appropriate for you. Higher gains..Higher risks..

UITFs has lesser risks..and of course lesser gains compared to stocks.


oic....yes uitf is less risky than direct stock and i know my level of risk so that's why im sticking in uitf..but i would like to try buying and selling somehow..why not? (aside from most uitf products has no online banking support for now) we will see after doing  some observations :)


josh0716

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Reply #6 on: Aug 15, 2014, 02:12 AM
Hi, I suggest the following:

1. Go with UITFs as banks charge less compared to mutual funds companies (the advantage of having branches as opposed to agents selling mutual funds).

2. Stay away from bond funds for the meantime. Interest rates are expected to go up due to inflationary pressure. There's a negative correlation between interest rates and bond prices, meaning if interest rates go up, bond prices would go down. Sure for the past few years, bond funds have performed well, but IMO, it won't happen this year.

3. Given your time horizon and your goal of increasing your savings, your best bet would be Equity Funds. You just have to ask yourself, can you see yourself having a paper loss of Php 10,000 (1% of Php1MM) in just one day? Stocks are very volatile so just make sure you can still sleep comfortably at night in case prices go down continuously.

Hope this helps.

Can you at least name 3 equity funds you can suggest? 


josh0716

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Reply #7 on: Aug 15, 2014, 02:51 AM
Basically they are almost the same. there are almost the same MF products available as there are UITFs.

The better question for me is which among the MF or the UITF companies you want to invest on.

If you ask me...

First -
In general, get one from a bank who is nearest your place of work or residence. Search here in PMT from the last few years who are the best performing Funds Managers. You do not need to select the 1st. It always vary. try to get one within the top 5.

Second-
Do you invest 1M one time? I think you should not. do it in tranches. We do not know if the market will go down 3 months from now. It maybe wiser to invest later. But we cannot postpone indefinitely otherwise, you risk missing also the opportunity now should the market go up.
So again, i would recommend do it in tranches or parts. maybe 250 at a time...or 200 or 100..its up to you.

Third
Once you have determine how much you want to invest. Break them down in smaller pieces. Lets say you decided to invest 500K or 200K. You can opt to get certificates in 50K denominations. In this way, should you need to redeem a small amount in the future, you only need to redeem one certificate, instead of redeeming the whole lot. That 50K certificate now could be 100K already in 5 yrs.

Hope that helps.

That' s what i plan. break my investment into 250K tranches.  i guess your right, its a questions of which among the MF or the UITF companies i like to invest.  I like what i see in  BPI ALFM and FAMI.  Do you think these are good choices.


BurgerSteak

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Reply #8 on: Aug 15, 2014, 10:24 AM
Can you at least name 3 equity funds you can suggest?

I like the Equity Funds of both BDO and Metrobank, but between the two I'll go for BDO.


phreyesj23

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Reply #9 on: Oct 29, 2014, 06:48 PM
Can you at least name 3 equity funds you can suggest?

I hope your 1M is doing great  :applause:

Here, this might help, I've listed some options where you can invest your 5000 pesos. But since you have a million, I guess
you can have 'em all  :hihi:

Investments you can make with your 5,000 Pesos


Jayumaster

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Reply #10 on: Nov 03, 2014, 05:11 PM
Since your time horizon naman is 3-5 years, might as well do it with UITFs (Equity)
Much better if you divide them into batches.

A couple of batches in Equity UITF or MF (different companies/banks)
A couple in Moderate UITF/MF
A couple in blue chip stocks.
A couple in Securities.

Tapos talikuran mo na sila at kalimutan para dika ma-stress. After three years, start to sell them off one by one depending on their parformance. At that time saka mo sila pagaralan at i-assess. (meron ka pang two years to decide whether to sell or hold)

Inggit naman ako dami mo bala/ Goodluck.  :bahalaka:


tyronesolee

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Reply #11 on: Nov 04, 2014, 08:54 AM
I would choose UITFs versus Mutual Funds because of the sales load.

For the banks offering UITF products, I am biased towards BPI because they don't have holding periods, you can conveniently add additional investments online through BPI Express Online or through your smart phone via their BPI Express Mobile.

You can take a look at two of my articles below:

http://www.millionaireacts.com/2900/uitfs-and-mutual-funds-a-closer-look.html

http://www.millionaireacts.com/125/choose-mutual-funds-vs-uitfs.html


Jayumaster

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Reply #12 on: Nov 04, 2014, 09:22 AM
@boss tyrone:
Mas pipiliin ninyo ang UITF sabi ninyo. Pero bakit sa article ninyo, "Choose Mutual Funds..." medyo nalito po ako... suri:


mxherr5

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Reply #13 on: Nov 04, 2014, 11:40 AM
sir, hindi ata maganda pag display ng forum sa device nyo.
it says "choose mutual funds vs uitf"


joshboz

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Reply #14 on: Nov 05, 2014, 01:53 PM
para sa akin the best ang equity uitf actually less cost, more gains, less risky  than equity MF and even sometimes less risky and more predictable  than direct stocks(but not all the time) it all depends on ur DISKARTE in utilizing  the nature of this uitf program....the thing is think out of the box when investing  and avoid traditional way so that u will not be an average investor and in order to maximize PROFIT .......P.S i learn this in 4 months time investing :)


 


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