How to Invest in Mutual Funds & UITF in the Philippines – Grit PH

How to Invest in Mutual Funds & UITF in the Philippines

Last Updated on – Nov 9, 2020 @ 5:30 am

Do you know how much your Php 100,000 will earn if you invest it in a bank for a year?

Seven hundred fifty pesos.

I used a local bank’s savings deposit rate to get a rough figure of how much a certain amount of money will grow in a year.

I know what you’re thinking. “A full year of waiting and my Php 100k only grew a measly Php 750? That’s ridiculous! I bet there are better ways to grow that kind of money.”

The results are more abysmal as you invest less. What if you only had Php 10,000 to invest?

Ready the confetti because at the end of the year you’ll get—drum roll please—

Twenty-five pesos.

I’m not kidding. Your annual earnings will just be enough to pay for a cup of extra rice.

You might say, “Hey, at least I’m saving right? That’s the point.”

I’m with you, buddy. Having savings is better than no savings at all.

But at those rates, watching your money grow will be as exciting as watching paint dry.

And we haven’t even counted in inflation rates yet.

But more importantly, you lose on potential better returns on your money for a full year.

If we want better returns for our money, we have to look at other avenues for investing our hard-earned cash.

And today you’ll learn about two of the most popular investment vehicles in the Philippines, Mutual Funds and UITF.

What are Mutual Funds?

A Mutual Fund is essentially a company that collects money from different investors and then allocates them in a variety of investment options like stocks, bonds, money market instruments, and others.

If owning stocks lets you directly buy a piece of a company, being a mutual fund investor lets you pick a basket containing portions of stocks bought from different companies.

This means you do not directly own the shares of the company. Rather, you own shares within the Mutual Fund itself.

Also, unlike stocks, you don’t have to make the investment decisions yourself. Mutual Funds employ fund managers who—you guessed it—manage the funds.

These are experts who analyze the market and decide which investment options to seize.

I like comparing this idea with buying fruits. If you’re investing in the stock market, it’s similar to grabbing a basket and filling it up with apples, oranges and lemons (stocks).

You pay for it at the cashier, making you the owner of each piece of fruit you stuffed in there.

If we apply the same analogy to Mutual Funds, here’s what it will look like:

You and other shoppers hand over your money to a “Fruit Manager” who decides and picks which fruits to buy. Each person now owns a “piece” of each fruit in the basket.

So instead of owning a whole apple, for example, you share a “bite” of it with others. As well as several other “bites” on other fruits stuffed in the basket.

Types of Mutual Funds

Now that we have a basic understanding of how Mutual funds work, let’s take a quick look at its different types.

1. Stock/Equity Funds

This type of mutual fund is considered to be have the highest risk (relative to other MF types) but with the potential for the biggest returns in the long term (5 years or more) since it invests primarily in stocks and equities.

2. Bond Funds

This type of mutual fund invests in a mix of fixed-income investments like treasury notes, government securities, and commercial papers.

Investors who opt for Bond Funds are in it for the lesser volatility (vs. other MF types) while still providing potential for capital growth and safeguard their money against inflation.

3. Balanced Funds

This type of mutual fund features a combination of stocks, bonds, and/or money market funds in its portfolio. It’s deemed as the fund type of choice for investors with an appetite for moderate risk.

4. Money Market Funds

This type of mutual fund invests primarily in short-term debt securities like time deposits and corporate bonds. It’s considered to be the safest MF type but also generates the least amount of return for your money.

Generally recommended for people looking to invest their money in the short-term.

Mutual Fund Types Comparison Table

Mutual Fund TypeRisk TypeInvests InGoalInvestment Time Frame
Stock/Equity FundAggressiveStocks and EquitiesLong Term Capital Growth5 years or more
Balanced FundsModerate Conservative, risk rating higher vs. Bond FundsMix of stocks, bonds, money market instrumentsMedium to Long Term Capital Growth3-5 Years
Bond FundsModerate ConservativeFixed-income instruments (Gov’t securities, treasury bills/notes, etc) Stability plus Reasonable Capital Growth1-3 Years
Money Market FundsConservativeShort-term debt securities (time deposits, corporate bonds, cash assets, etc)Stability plus Minimal Capital GrowthLess than 1 year

Also Check: Live Price List Tracker of Philippine Mutual Funds

What is UITF?

UITF stands for Unit Investment Trust Fund. In principle, it works a lot like Mutual Funds. But instead of a Mutual Fund company, your money is managed by a bank.

In Mutual Funds, you own shares, making you a “shareholder”. The price of each MF share is referred to as Net Asset Value Per Share (NAVPS).  

In UITF, you’re an “investor” for owning units. The price of each UITF unit is referred to as Net Asset Value Per Unit (NAVPU). For example, if the NAVPU of a specific UITF is Php 2.00 and you have Php 20,000 to invest, you’ll own 10,000 units.

The bank will provide you with a certificate as proof that you own an X-number of units.

Types of UITFs

UITFs can be categorized the same way as MFs (Equity, Balanced, Bonds, Money Market). In similar fashion, allocation of assets is based on the investors risk-appetite.

UITF TypeRisk TypeInvests InGoalInvestment Time Frame
Stock/Equity FundAggressiveStocks and EquitiesLong Term Capital Growth3 years or more
Balanced FundsModerate Conservative, risk rating higher vs. Bond FundsMix of stocks, bonds, money market instrumentsMedium to Long Term Capital Growth1-3 Years
Bond FundsModerate ConservativeFixed-income instruments (Gov’t securities, treasury bills/notes, etc) Stability plus Reasonable Capital Growth1 Year
Money Market FundsConservativeShort-term debt securities (time deposits, corporate bonds, cash assets, etc)Stability plus Minimal Capital Growth3-6 months

Mutual Funds VS UITF?

Pros & Cons of Mutual Funds

Pros:

  • Taxes are not applied in your capital gains.
  • MF companies also has the potential to provide dividends and offer some shareholder rights.
  • Reports are more transparent and has a higher level of accountability overall compared to UITF.
  • MF is considered by many to be better overall in terms of regulation because MF companies are subject to full disclosure and issuance of reports

Cons:

  • MF companies charge Entry and Management fees.
  • May offer fewer investment choices because of high capital requirements
  • UITFs are technically easier to set-up since most banks offer them.

Pros & Cons of UITFs

Pros:

  • Easier to set-up versus MF since banks are almost everywhere.
  • No Entry fees, lesser Management fees vs MF
  • Wider Variety of Funds

Cons:

  • Owning units does not make you a shareholder (no potential dividends and shareholder rights)
  • Capital gains are subject to 20% withholding tax (case-to-case basis)

If MFs and UITFs follow the same investing philosophy, how do they differ then?

Let’s have a closer look.

Mutual Funds VS. UITF

 MUTUAL FUNDSUITFs
How to InvestOpen an account with a licensed MF agentOpen an account with the bank’s Trust Representative
Regulatory BodySecurities & Exchange Commission (SEC)Bangko Sentral ng Pilipinas (BSP)
Price of FundsNet Asset Value Per Share (NAVPS)Net Asset Value Per Unit (NAVPU)
Fees & ChargesEntry Fee = 0.5% to 5% plus management fees, Sales charge = 1% to 5%, Potential Redemption Fees, No Entry Fee. Trust Fee = 0.5% to 1.00% annual. Sales charge = 0% to 2%, Potential Redemption Fees
Holding PeriodMinimum of 6 months (some MFs allow a 1-month holding period)Minimum of 30 days (some UITFs enforce a 45-day minimum)
Minimum Initial InvestmentPhp 5,000Php 10,000 (some offer Php 5,000 minimum)

Why should you invest in Mutual Funds and UITF?

I once read somewhere that investment vehicles like banks, MF, UITF, and the stock market can be compared to transportation vehicles. How?

Each offers a way to “reach” your financial destination.

Some compare putting money in banks as the same as walking. While it can take you to your financial destination, it will probably take a very looooong time.

Meanwhile, MF and UITF can be thought of as speedier vehicles similar to riding a bike or a car.  They can take you to your financial destination faster.

I thought it was a useful analogy that paints a simple picture explaining the benefits of utilizing other investment options.

But what are the actual reasons that make Mutual Fund and UITF investing worth a look? Here are some of them.

1. Better potential returns for your money

Compared to a savings account in a bank, your money will have better growth potential when invested in MF or UITF.

2. Professional Fund Management

Both UITFs and Mutual Funds employ fund managers who handle the allocation of your funds. This takes out the guesswork on your end unlike stock investing where you yourself have to decide which stocks to pick.

3. Diversification

Your money will be spread across a wide variety of portfolios of stocks, bonds, securities, money markets and other funds, making it considerably safer in principle versus stock market investing.

4. Low Initial Investment Costs

For as low as Php 5,000 you can open an MF or UITF account. Additional investments can be as little as Php 1,000 monthly.

5. Liquidity

Both UITFs and Mutual Funds provide an easy way to redeem your investment should you want/need to.

6. Protection against Inflation

Having better potential gains means you have a better chance of protecting your capital against inflation.

7. Easy to Set-up & Manage

It’s easy to open a UITF or MF account. All you need to do is visit your nearest bank (UITF) or MF company and submit the requirements and initial deposit.

In terms of “managing” your account, it’s really just a matter of putting in more funds since the fund manager will take care of the investing part.

8. Compound Interest

In principle, the longer the time your money is invested in investment options like MF and UITF, the higher potential earnings for your money.

How much can you earn from investing in Philippine Mutual Funds?

Earnings are highly dependent on how well a particular Mutual Fund performed for a certain time frame (computed via NAVPS).

If you do a bit of research online, you’ll see data showing average returns broken down in 1, 3, 5 and 10-year increments.

That being said, Mutual Funds are ideally considered a mid-to-long term investment venture with optimal returns gauged at the 5-yrs or higher horizon.

10 Best Philippine Mutual Funds in 2019

Here are the top 10 mutual funds companies in the Philippines – as of October 3, 2019:

Mutual Funds CompanyFund Type1-Year Return (%)
Philam Bond Fund, Inc.Bond Funds12.24%
Philam Dollar Bond Fund, Inc.Bond Funds11.41%
ATRAM Alpha Opportunity Fund, Inc.Stock Funds10.5%
Cocolife Dollar Fund Builder, Inc.Balanced Funds10.17%
Sun Life of Canada Prosperity Bond Fund, Inc.Bond Funds9.69%
Sun Life Prosperity Dollar Abundance Fund, Inc.Bond Funds9.64%
Sun Life Prosperity GS Fund, Inc.Bond Funds9.46%
PAMI Horizon Fund, Inc.Balanced Funds8.63%
Philam Fund, Inc.Balanced Funds8.46%
Philequity Peso Bond Fund, Inc.Bond Funds7.97%

Best Stock/Equity Funds in the Philippines for 2019 [Mutual Funds]

Stock or Equity type of mutual funds are considered to be the riskiest but may provide the highest potential gains for your money.

Funds are typically allocated in the following stocks: growth, dividend, value, large-cap, mid-cap, and small-cap (or any combinations of these).

Note: The data shown in the table below are based on the performance reports at PIFA – as of January 23, 2019. We will be updating our list of Mutual Fund Companies on a quarterly basis.  

Stock FundsInvested In:5YR Return (%)Website:
ALFM Growth Fund, IncPeso Securities3.56%ALFMMutualFunds.com
ATRAM Alpha Opportunity Fund, Inc.Peso Securities3.5%Atram.com.ph
ATRAM Philippine Equity Opportunity Fund, Inc.*Peso Securities1.95%Atram.com.ph
Climbs Share Capital Equity Investment Fund Corp.Peso SecuritiesN/ACIMAC.ph
First Metro Consumer Fund on MSCI Phils. IMI, Inc.Peso SecuritiesN/AFAMI.com.ph
First Metro Save and Learn Equity Fund,Inc.Peso Securities2.72%FAMI.com.ph
MBG Equity Investment Fund, Inc.Peso SecuritiesN/AMBGFunds.com
One Wealthy Nation Fund, Inc.Peso SecuritiesN/AFAMI.com.ph
PAMI Equity Index Fund, Inc.Peso SecuritiesN/APhilamFunds.com
Philam Strategic Growth Fund, Inc.Peso Securities2.78%PhilamFunds.com
Philequity Dividend Yield Fund, Inc.Peso SecuritiesN/APhilequity.net
Philequity Fund, Inc.Peso Securities5.34%Philequity.net
Philequity PSE Index Fund Inc.Peso Securities5.39%Philequity.net
Philippine Stock Index Fund Corp.Peso Securities5.43%Philequity.net
Soldivo Strategic Growth Fund, Inc.Peso SecuritiesN/ARampver.com
Sun Life Prosperity Philippine Equity Fund, Inc.Peso Securities3.89%SunLife.com.ph
Sun Life Prosperity Philippine Stock Index Fund, Inc.Peso SecuritiesN/ASunLife.com.ph
United Fund, Inc.Peso Securities4.33%CocoLifeAsset.com
First Metro Phil. Equity Exchange Traded Fund, Inc.Exchange Traded Fund6.52%FirstMetroETF.com.ph
ATRAM AsiaPlus Equity Fund, Inc.Foreign Currency Securities0.41%Atram.com.ph
Sun Life Prosperity World Voyager Fund, Inc.Foreign Currency SecuritiesN/ASunLife.com.ph

Related: Best Index Funds to Invest in the Philippines

Best Balanced Funds in the Philippines for 2019 [Mutual Funds]

Balanced funds typically carry a moderate-risk rating and appeal to those who are looking into a 3-5 year horizon. Balanced funds are typically allocated in time deposits, bonds, and the stock market.

Note: The data shown on the table below are based on the performance reports at PIFA – as of January 23, 2019. We will be updating our list of Mutual Fund Companies on a quarterly basis.  

Balanced FundsInvested In:5YR Return (%)Website:
ATRAM Dynamic Allocation Fund, Inc.Peso Securities-0.29%Atram.com.ph
ATRAM Philippine Balanced Fund, Inc.Peso Securities1.62%Atram.com.ph
First Metro Save and Learn Balanced Fund Inc.Peso Securities-0.53%FAMI.com.ph
Grepalife Balanced Fund CorporationPeso SecuritiesN/AGrepaFunds.com
NCM Mutual Fund of the Phils., IncPeso Securities2.44%N/A
PAMI Horizon Fund, Inc.Peso Securities1.38%PhilamFunds.com
Philam Fund, Inc.Peso Securities1.47%PhilamFunds.com
Solidaritas Fund, Inc.Peso Securities3.38%BPIAssetManagement.com
Sun Life of Canada Prosperity Balanced Fund, Inc.Peso Securities2.38%SunLife.com.ph
Sun Life Prosperity Dynamic Fund, Inc.Peso SecuritiesN/ASunLife.com.ph
Cocolife Dollar Fund Builder, Inc.Foreign Currency Securities1.72%CocoLifeAsset.com
PAMI Asia Balanced Fund, Inc.Foreign Currency Securities-0.7%PhilamFunds.com
Sun Life Prosperity Dollar Advantage Fund, Inc.Foreign Currency Securities1.54%SunLife.com.ph
Sun Life Prosperity Dollar Wellspring Fund, Inc.Foreign Currency SecuritiesN/ASunLife.com.ph

Best Bond Funds in the Philippines for 2019 [Mutual Funds]

Bond funds are tagged a notch higher above money market funds in terms of risk.

Still, they are considered as conservative in general since money is allocated in less volatile investments (relative to Equity and Balanced funds) like investment-grade and high-yield corporate bonds, and government bonds.

Note: The data shown on the table below are based on the performance reports at PIFA – as of January 23, 2019. We will be updating our list of Mutual Fund Companies on a quarterly basis.  

Bond FundsInvested In:3YR Return (%)Website:
ALFM Peso Bond Fund, Inc.Peso Securities2.15%ALFMMutualFunds.com
ATRAM Corporate Bond Fund, Inc.Peso Securities-0.49%Atram.com.ph
Cocolife Fixed Income Fund, Inc.Peso Securities5.4%CocoLifeAsset.com
Ekklesia Mutual Fund Inc.Peso Securities1.69%N/A
First Metro Save and Learn Fixed Income Fund, Inc.Peso Securities0.34%FAMI.com.ph
Grepalife Fixed Income Fund Corp.Peso Securities0.03%GrepaFunds.com
Philam Bond Fund, Inc.Peso Securities-0.71%PhilamFunds.com
Philequity Peso Bond Fund, Inc.Peso Securities1.13%Philequity.net
Soldivo Bond Fund, Inc. Peso Securities0%Rampver.com
Sun Life of Canada Prosperity Bond Fund, Inc.Peso Securities1.76%SunLife.com.ph
Sun Life Prosperity GS Fund, Inc.Peso Securities1.39%SunLife.com.ph
ALFM Dollar Bond Fund, Inc. Foreign Currency Securities2.29%ALFMMutualFunds.com
ALFM Euro Bond Fund, Inc. Foreign Currency Securities1.18%ALFMMutualFunds.com
ATRAM Total Return Dollar Bond Fund, Inc.Foreign Currency Securities1.1%Atram.com.ph
First Metro Save and Learn Dollar Bond Fund, Inc.Foreign Currency Securities0.82%FAMI.com.ph
Grepalife Dollar Bond Fund Corp.Foreign Currency Securities-0.56%GrepaFunds.com
MAA Privilege Dollar Fixed Income Fund, Inc.Foreign Currency SecuritiesN/AN/A
MAA Privilege Euro Fixed Income Fund, Inc.Foreign Currency SecuritiesN/AN/A
PAMI Global Bond Fund, IncForeign Currency Securities-0.7%PhilamFunds.com
Philam Dollar Bond Fund, Inc.Foreign Currency Securities1.01%PhilamFunds.com
Philequity Dollar Income Fund Inc.Foreign Currency Securities0.94%Philequity.net
Sun Life Prosperity Dollar Abundance Fund, Inc.Foreign Currency Securities0.38%SunLife.com.ph

Best Money Market Funds in the Philippines for 2019 [Mutual Funds]

Also known as Fixed Income funds. Money market funds promise the lowest risk rating but at the expense of having the least potential returns for your money.

Money market funds invest in time deposits and other similar products.

Note: The data shown in the table below are based on the performance reports at PIFA – as of October 3, 2019. We will be updating our list of Mutual Fund Companies on a quarterly basis.  

Money Market FundsInvested In:1YR Return (%)Website:
ALFM Money Market Fund, Inc.Peso Securities4.11%ALFMMutualFunds.com
First Metro Save and Learn Money Market Fund, Inc. Peso SecuritiesN/AFAMI.com.ph
Philam Managed Income Fund, Inc.Peso Securities5.78%PhilamFunds.com
Sun Life Prosperity Money Market Fund, Inc.Peso Securities3.88%SunLife.com.ph
Sun Life Prosperity Dollar Starter Fund, Inc.Foreign Currency Securities2.2%SunLife.com.ph

How to Start Investing in Mutual Funds in the Philippines

It’s easy to set up a mutual fund account. Here are the usual steps required.

  1. Go to the MF company’s website and click on its MF registration page (refer to listed websites above).
  2. You might be required to answer a few questions to determine your risk profile. An MF sales agent should assist you in this stage.
  3. Download the required forms and documents.
  4. Submit all requirements by visiting their office or sending it via courier.
  5. Fund your account once you receive confirmation/statement of account arrives.

How to Invest in Philippine Mutual Funds Online

Once you have an account open, buying shares of mutual funds can be done through the bank or via in-person visit at the nearest MF branch.

For convenience purposes, most investors enroll their MF accounts in their bank’s online banking system which enables them to easily transfer money for funding their Mutual fund.

More savvy investors who already have accounts in COL Financial or First Metro Sec have the option to buy and sell MF shares directly through its online trading platforms. Both COL Financial and First Metro Sec are authorized MF agents.

Another way is to invest in mutual funds online via SeedBox.

Seedbox is an online investment platform offered by ATR Asset Management (ATRAM).

It is particularly handy for beginner investors who need help identifying a portfolio that match their investment goals.

And by making investment convenient and affordable, Seedbox helps newbies get into the habit of investing–even a small amount–regularly.

With Seedbox, you can choose to put your money in individual products or fund packages selected by their researchers.

SeedBox’s Individual Products:

NOTE: The data shown in the table below have been taken from Seedbox’s page on individual products as of September 30, 2019.

Individual ProductsRisk Profile1-year return rateMinimum subscription amountMinimum top up
ATRAM Alpha Opportunity Fund, Inc.Aggressive12.52%₱1,000₱500
ATRAM Philippine Equity Smart Index Fund – UITFAggressive7.85%₱1,000₱500
ATRAM Global Technology Feeder Fund – UITFAggressive6.57%₱1,000₱1,000
ATRAM Philippine Equity Opportunity Fund, Inc.Aggressive3.71%₱1,000₱500
ATRAM Global Financials Feeder Fund PHP – UITFAggressive3.79%₱1,000₱1,000
ATRAM Total Return Peso Bond Fund – UITFModerate11.04%₱1,000₱500
ATRAM Dynamic Allocation Fund, Inc.Moderate0.04%₱1,000₱500
ATRAM Philippine Balanced Fund, Inc.Moderate4.97%₱1,000₱500
ATRAM Corporate Bond Fund, Inc.Moderately conservative3.19%₱1,000₱500
ATRAM Peso Money Market Fund – UITFConservative3.70%₱1,000₱500

SeedBox Packages:

NOTE: The data shown in the table below are based on Seedbox’s product packages as of September 30, 2019.

Risk ProfileAllocation1-year return rateMinimum subscription amountMinimum top up
AggressiveATRAM Philippine Equity Opportunity Fund, Inc.100 %3.71%1,000500
Moderately AggressiveATRAM Philippine Equity Opportunity Fund, Inc.70 %ATRAM Corporate Bond Fund, Inc.30 % 3.56%1,000500
ModerateATRAM Philippine Balanced Fund, Inc.100 % 4.97%1000500
ModerateATRAM Dynamic Allocation Fund, Inc.100 % 0.04%1000500
Moderately ConservativeATRAM Philippine Balanced Fund, Inc.60 %ATRAM Corporate Bond Fund, Inc.40 % 4.26%1000500
ConservativeATRAM Corporate Bond Fund, Inc.100 % 3.19%1000500

Each product is matched with an investor’s risk profile.

Your risk profile will depend on several factors, including your personality and goals, and is among the questionnaires you need to fill out after activating your Seedbox account. 

Let’s say you have a risk profile of Moderate, but you want to put your money in aggressive investment vehicles.

You can do so in Seedbox simply by clicking the box beside the waiver to indicate that you are investing in products that do not match your risk profile.

Here’s how you can start investing through Seedbox:

  1. Sign up with Seedbox. You will be prompted to enter the activation code sent to your email. 
  2. Once your account is activated, continue filling up the online forms (i.e., KYC, FATCA, and Risk Profile).
  3. Sign the documents during a face-to-face meeting as required by the Securities and Exchange Commission (SEC). Once your account has been approved, you can start investing. 
  4. Begin with the end in mind. Use the Goal Planner to identify what this investment is for. Is it for retirement? Your children’s education? A home purchase or another big spend? Indicate when or in how many years you’ll need the money and how much you’ll need by then. 
  5. In the Goal Planner, indicate your desired initial investment and monthly investment.

    If your initial and monthly investments are not enough to meet your target amount, Seedbox’s Goal Planner will give you some tips. For instance, it will advise you to lower your target amount, adjust your timeframe, increase your initial and/or monthly investments, or take a higher-risk level.

    With the Goal Planner, you can easily see whether you’re on track to meet your target amounts. If not, you can decide from the get-go to increase the amount you set aside for investments.
    If this is not feasible for you right now, then you can manage your expectations. You can still reach your target amount, but within a longer timeframe.
  6. Seedbox will recommend portfolio models that can help you meet your target amount.
  7. Start investing either by paying through banks or online.
  8. To top up your investment, just go to your Seedbox Dashboard and click the “+” sign in the Portfolio section.

Related: 8 Best Online Investment Platforms in the Philippines

Best Unit Investment Trust Fund (UITF) in the Philippines for 2019

Best UITF Equity Funds

A UITF Equity fund invests primarily in shares of publicly listed companies. It is tagged with a risk classification of Aggressive.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing equity funds from December 2013 – December 2018 (5-year ROI). We will be updating this table on a quarterly basis.

BankFund Name5YR ROI (%)Fund Details
China Banking CorporationChina Bank Equity Fund32.6997%ChinaBank.ph
BPI Asset Management and Trust CorporationBPI Equity Value Fund29.9003%BPIAssetManagement.com
BPI Asset Management and Trust CorporationBPI Philippine High Dividend Equity Fund29.6938%BPIAssetManagement.com
Security Bank CorporationSB Peso Equity Fund29.3042%SecurityBank.com
BPI Asset Management and Trust CorporationBPI Philippine Equity Index Fund2.3192%BPIAssetManagement.com

Best UITF Balanced Funds

A UITF Balanced Fund invests primarily in equities and fixed income securities. It is tagged with a risk classification of Moderate Aggressive/Conservative.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing balanced funds from November 2015 – November 2018 (3-year ROI). We will be updating this table on a quarterly basis.

BankFund Name3YR ROI (%)Fund Details
SterlingBank of AsiaSterling Balanced Fund5.2015%SterlingBankAsia.com
BPI Asset Management and Trust CorporationBPI Balanced Fund4.0341%BPIAssetManagement.com
AB CapitalAB Capital Balanced Fund3.0569%AB Capital Securities
China Banking CorporationCBC Balanced Fund2.3432%ChinaBank.ph
Metropolitan Bank & Trust Co.Metro Balanced Fund0.5684%MetroBank.com.ph

Best UITF Bond Funds

A UITF Bond Fund invests primarily in large corporation and government-issued fixed-income securities. It is tagged with a risk classification of Moderate Conservative.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing bond funds from December 2017 – December 2018 (1-year ROI). We will be updating this table on a quarterly basis.

Bank Fund Name1YR ROI (%)Fund Details
Union BankUnionBank Medium Term Fixed Income Portfolio1.2791%UnionBankPH.com
China Banking CorporationCBC Intermediate Fixed-Income Fund0.4914%ChinaBank.ph
Philippine National BankPNB Peso Intermediate Term Bond Fund0.0825%PNB.com.ph
EastWest Banking CorporationEastWest Peso Intermediate Term Bond 0.0435%EastWestBanker.com
BDO Unibank, Inc.BDO Merit Fund Intermediate Term Portfolio-0.1775%BDO.com.ph

Best UITF Money Market Funds

A UITF Money Market Fund invests primarily on short term securities with maturity of less than 1 year. It is tagged with a risk classification of Conservative.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing money market funds from July 2018 – January 2019 (6-month ROI). We will be updating this table on a quarterly basis.

BankFund Name 6-Month ROI (%)Fund Details
RCBC SavingsRCBC Savings Bank Peso Money Market UITF1.7866%RCBCSavings.com
United Coconut Planters BankUCPB Cash Management Fund 1.7527%UCPB.com
Bank of CommerceDiversity Money Market Fund1.7235%Bankcom.com.ph
AB CapitalAB Capital Short-Term Fund1.5718%ABCapitalSecurities.com.ph
Philippine Bank of CommunicationsSignature Trust Fund0.5807%PBCOM.com.ph

How to start investing in UITF

Compared to stocks, which require you to make your own selection on the company shares-level, investing in UITF and MF only requires that you pick a fund based on your risk appetite.

The fund manager will take care of making decisions on where to put your money based on the fund’s strategy.

This makes pooled investments (MF & UITF) look more ideal to “passive investors” who don’t necessarily need or want to make the investment decisions themselves.

It takes a lot of the guesswork out of the equation so that all you need to do upon setting up an account is to monitor it and put in more funds.

List of UITF Member Banks

AB CapitalAsia United BankATRAM Trust Corporation
Bank of CommerceBDO Unibank, Inc.BPI Asset Management and Trust Corporation
China Banking CorporationCTBC Bank (Philippines) Corp.Development Bank of the Philippines
EastWest Banking CorporationLandBank of the PhilippinesManulife Asset Management and Trust Corporation (MAMTC)
Metropolitan Bank & Trust Co.Philippine Bank of CommunicationsPhilippine Business Bank
Philippine National BankPhilippine Savings BankRCBC Savings
Rizal Commercial Banking CorporationRobinsons BankSecurity Bank Corporation
Sterling Bank of AsiaUnion BankUnited Coconut Planters Bank

How to Open a UITF Account

Since UITFs are offered by banks, simply drop by the nearest branch of your choice.

Bank personnel specializing in their UITF products will assist you and have you complete a Client Suitability Assessment form. Most banks allow you to do the assessment and download the required forms from their website. You’ll still need to physically submit them though.

After choosing your fund, completing all requirements, and receiving your certificate of participation, you may begin funding your account. Initial deposits start at Php 5,000.

10 Tips on Mutual Funds and UITF Investing

1. Set clear financial goals 

This will lay the blueprint for your investing strategy. Are you investing for retirement? Or is it for short-term goals, like funding a new purchase?

Setting clear and measurable goals will set the tone for your investing philosophy and mindset.

2. Be mindful of your current financials 

Determine how much you are willing to set aside for growing your nest egg for UITF or MF. It’s ideal to have a separate emergency fund and not put all your savings into these investment vehicles.

Remember, gains are not always guaranteed here so you have to take into consideration your current assets and liabilities.

3. What kind of an investor are you?

Know your risk-appetite. Whether you’re risk-driven or full-conservative with your selection, what matters most is that you pick a strategy that suits your investment philosophy perfectly.

4. Do your due diligence.

Try to pick an MF or UITF product that meets your requirements and aligns with your investing strategy. Also, bonus perks like website platform usability and ease-of-funding are nice to have for convenience.

5. It always helps to gain more financial knowledge.

Even though you have professional fund managers handling your money, the actual process of selecting your MF company or UITF bank rests solely on you.

Doing some bit of homework in getting to know more about how UITF and MF works makes you a step ahead over those who are completely clueless and makes you less prone to acting on bad advice.

6. Past performance may not be indicative of future results.

You’ll read this quote a lot as you browse through your MF and UITF reports. It simply means that even if a specific fund is performing admirably for the last few years, it does not guarantee the same results in the future.

While it’s useful in gauging a fund’s performance, you should also take into consideration the timeline it covered.

7. How long do you plan to be invested?

Most seasoned MF and UITF investors will probably tell you that the best strategy is to be in it for the long term.

In theory, the longer you stay invested in a fund, the better chance for gains since the underlying investments become less prone to market fluctuations over time.

8. Be mindful of fees and charges 

Not all MF and UITF products are created equal. Some will have more (or less) overall fees required to operate and manage the fund. While it may look trivial, these small percentages can negate any potential gains especially if the fund is underperforming.

Know which products suits your preferences well when it comes to fees.

9. Manage your emotions 

Most new investors commit the mistake of calling it quits and withdrawing their funds at the first sight of a dip in their capital. Remember, these types of investment vehicles don’t promise instant gains nor guarantee a consistent positive value on your assets.

As we’ve mentioned earlier, more experienced investors extol the importance of having a long-enough horizon for MF and UITF to perform best.

10. Don’t limit yourself to MF and UITF investing

There are other ways you can get better returns for your money. Alternatives such as VUL, cryptocurrency, Personal Equity Retirement Account (PERA), and more are possible options for wealth building.

For a more in-depth look, you can check our list of the 11 Best Investments in the Philippines. 

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About Amiel Pineda

Amiel is the lead business & finance columnist of Grit PH. He escaped from the shackles of BPO life and now pursues his dream of writing full time. He shares his best tips and insights for aspiring homebased workers and freelancers on his site: Homebased Pinoy

Reader Interactions

Comments

  1. Glenda says

    Good morning mam/sir
    Im OFW here in dubai
    Im enterested to envest mutual fund but i dont know how to apply and where?

  2. Adrian R. Lloveras says

    Hi Sir, I just want to clarify since these are invesment vehicles (both MF & UITF). They don’t require monthly payments right? You just leave your initial investment like for example 5k and allow the fund managers or representatives to work on your investment. But you also have the option to have additional investment.

  3. Conrado C Baltazar Jr says

    I want to know what is PLAN RULES.
    I invested in EIP at BDO since 2015. However, now that I want to unsubscribe and redeem my shares, the bank is insisting that I should file in person. They rejected the SPA i sent thru my brother. The SPA is purely for filing the notice of unsubscription and redemption, yet it was rejected. Their reason is that I need to sign the COPs which my attorney-in-fact is authorized to do per the SPA. Any help is highly appreciated.
    Thank you and God bless!

  4. Edwin says

    Hi Sir,
    I expecting my retirement pay, but as of now I dont have in mind yet what business I should take. Is it ok to invest it first in UITF? What is the maximum amount can I invest just incase? Thanks.

      • Rey cajita says

        Maam/sir,can i try to invest 10k to mutual fund then every month maghuhulog ako magkanu? For example in 5 years gusto ko maka 1 million;

  5. Marius Dejess says

    Dear Sir:

    That is a very exhaustive article!

    Please bear with me, would you do some work as to get to know what persons are in charge mano a mano of for example, the aggressive funds in Bpi asset and trust management service, like say, like the BPI Invest Philippine High Dividend Equity Fund?

  6. Joemar says

    Very nice article Amiel! So much learning in just one reading. Thank you for sharing your knowledge to us. Looking forward to reading more articles from you.

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