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Differences between Mutual Funds and UITFs




A lot of our readers have been sending us inquiries regarding Mutual Funds and Unit Investment Trust Funds (UITFs), particularly the differences between the two.

In response, we summarize here the basic differences between Mutual Funds and UITFs.

Comparison of Mutual Funds and Unit Investment Trust Funds

  Mutual Funds UITFs
Offered By Investment Companies Banks
Fund Manager Appointed by the investment company Trust Group of the bank
Price NAVPS NAVPU
Fees Entry Fee; Exit Fee Trust Fee
Applicable Law “Investment Company Act of the Philippines” No specific law although banks are governed by the “General Banking Law”
Regulatory Body SEC BSP
Sales agents Must be licensed No license necessary

Offerer. Mutual Funds are offered by investment companies independently registered as such. Therefore, when you buy a mutual fund share, you become a stockholder of that company and you acquire the rights of a regular stockholder, including right to vote and right to receive dividends, among others. UITF, on the other hand, is a trust product of banks. When you buy a UITF, you buy investment units, not shares of the company. Therefore, you do not acquire shareholder rights in that bank. A UITF, although a bank product, is not a deposit product which means it is not covered by the Philippine Deposit Insurance Corporation (PDIC).

Fund Manager. In mutual funds, money is entrusted to a full-time professional fund manager appointed by the investment company. In UITFs, money is managed by the Trust Group of the bank.

Price. The price of a MF share or a UITF unit is measured by its current net asset value. The Net Asset Value (NAV) is simply the difference between the values of the fund’s assets less total liabilities. This total NAV is divided by the number of MF shares or UITF units outstanding. In the case of mutual funds, this is called NAVPS (Net Asset Value per Share) and in the case of UITFs, is called NAVPU (Net Asset Value per Unit).

Fees. Investments in mutual funds are charged sales loads, which may be in the form of entry or exit fees. Entry fees are outright expenses charged prior to opening a mutual fund account. Exit fees, or redemption fees, are charged when shares are redeemed and converted to cash. UITFs don’t have entry or exit fees, but are charged a management or trust fee, which is usually a certain percentage of the invested amount.

Applicable Law. A specific law called the “Investment Company Act of the Philippines” governs mutual fund companies. UITF products, on the other hand, are not governed by any specific law at present but since they are offered by banks, they are still under Philippine banking laws.

Regulatory Body. Mutual funds are registered companies, therefore, they are regulated by the Philippine Securities and Exchange Commission (SEC). UITFs, as bank products, are regulated by the Bangko Sentral ng Pilipinas (BSP).

Sales Agents. To be able to sell mutual fund shares, a person must be a Certified Investment Solicitor, a license given by the SEC to people allowed to sell mutual funds. UITFs, on the other hand, are offered by people who may or may not have the SEC license. These are usually staff in bank branches.

So which one is better: Mutual Fund or UITF? That depends on a lot of factors. Browse through our other articles or join the discussion forum below to help you decide which one to go for.

Related Readings:


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About this post: mutual fund vs uitf, difference between mutual fund and uitf, difference between UITF and mutual fund, uitf vs mutual fund philippines, uitf vs mf

36 thoughts on “Differences between Mutual Funds and UITFs”

  1. andave says:

    hello pmt. im a young seafarer and s just learning how 2 nvest. nabasa k na po lahat ng libro from robert kiyosaki to fracisco colayco. tanong k lg po f which best suits for me consdrng that im always away from phil for 9-10 months.. is t mutual funds or uitf? thanks

    1. Rj says:

      hi andave,

      i suggest you must learn how to invest properly and safely first. when are you going back to the phils? mutual fund is suitable for us. i’m also an OFW but mutual fund is level 2 investment already. do you have level 1 yet? if you want to learn more email me rjdd_1509@yahoo.com. God bless you keep safe always. cheers!

    2. Rodel Amansec says:

      Hi Rj,
      Im also an OFW and interest about this investment opportunity from either Mutual fund or UITF. May I know what Mutual fund is best to invest? You can PM through my email, rodelamansec@gmail.com. Thanks

    3. ceferino says:

      hi rj,
      I’m also ofw tanong ko lng bakit nirecomend mo yung mutual fund ano ba ang maganda doon kaysa utif please email me also cefcrismateo@gmail.com

    4. Jayson says:

      Hi Rj,
      Same here as well, I’m an OFW, kindly guide me also which is best to invest, is it MF or UITF?
      Many thanks and regards,
      Jayson

    5. Jayson says:

      Hi Rj,
      Same here as well, I’m an OFW, kindly guide me also which is best to invest, is it MF or UITF? here is my email jjramos_9@icloud.com
      Many thanks and regards,
      Jayson

    6. Lee Paroa says:

      hi andave f I were u visit k s bpi mtutulungan k mag invest

  2. Summerhathyway says:

    this is so interesting post to read it..

  3. B in Innsbruck says:

    You should add info about which are better or at least the factors to consider.  Maybe you can add links to the posts on the forum that you mentioned.  I have zero interest in scrolling endlessly and aimlessly through the forum.

  4. Adam_dahl says:

     B in Innsbruck, its a way of spoon feeding

  5. Mike says:

    Im really interested to invest in Mutual funds.. But I have no idea how to start? anyone? http://smcondo.com

    1. edleon says:

      Go to any bank. MF is good for long term while UITF is better if you want to play your money especially in Balance Fund. UITF has no holding period so anytime basta na reached mo na yung percentage na kita na gusto mo, pwede ka na mag pullout. Sa MF you have to stay kahit nalulugi because of holding period (usually 6 months) otherwise you have to pay the early redemption fees.

  6. Ruby Michelle says:

    I would i know na kumita ang ang investment ko sa UITF kasi yung nakalagay sa fund investment summary ko ay – 12 dec-2012 philippine peso managed fund total units 240,034.0477 unit price 2.250099 Fund Value- 542,260.68 TOTAL 542,260.68.

  7. Calvin says:

    Im a financial advisor from Sunlife Financial. I can help u where to invest ur money wether in Mutual funds or stock market. Here is my no. 09166255856

  8. Ralde Deodor says:

    between MF and UITF, which one has more risk?

  9. Edwin says:

    Isa akong seafarer.balak ko maginvest pagbalik ko ng pinas.San ba ang mas mabuti maginvest MF o UITF. Please send some ideas.thanks eaabestano@gmail.com

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