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Unit Investment Trust Fund: It's safe and wise.

Tired of the usual saving that doesn't generate much interest? Maybe it's time for you to consider an investment fund other than simple savings in the bank.With its many advantages, the Unit Investment Trust Fund or UITF offers attractive opportunities for investors.

A UITF is a curated investment fund managed by experts to ensure high-yield and quality returns. It's the perfect investment option if you don't have the time or knowledge for actual stock trading because it lets experts manage your investments through securities, bonds, equities, and other best-in-class instruments.

Here is the best news: UITFs are affordable. Compared to stocks and other investment instruments, you can start investing in UITF for as little as P5,000.

Based on historical fund performance, UITFs have provided higher returns than traditional deposit products. For example, a P5,000 investment in a time deposit will only earn P203 in five years versus P2,842 if invested in an equity fund. This is based on the Time Deposit's rate of 0.80% per annum (p.a.) against the usual Equity Fund average performance (from 2012 to 2017) to of 9.42% p.a.

Moreover, UITF is your weapon against inflation which affects your purchasing power. The Bangko Sentral ng Pilipinas (BSP) forecasted inflation to average at 3.2% in 2018. If this will be the trend in the next few years, your P5,000 today could be P800 lesser in value after five years.

To beat inflation, you need to make investments that can yield returns higher than the inflation rate.

Since UITFs are managed by investment experts, you don't need to burden yourself and spend your valuable time researching, analyzing, and keeping an eye on the market.

So don't panic when the price of the UITF goes down. Prices of a Fund's underlying securities go up and down over time. Volatility is part and parcel of investing - financial markets do not go up in a straight line.

So you don't make big financial decisions on your own, let the professionally-trained investment experts decide for you. The experts can always diversify your investment in stocks, bonds, treasury bills, debt securities, high-yield savings account, and other fixed-income instruments which ever is earning best.

Here are the do's and dont's for first-timer UITF investor:


Do read the Declaration of Trust, Information Memo, Offering Circular or similar document about the Fund/s you are interested in before investing.

Do evaluate your investment objective and risk appetite before you invest in any UITF.

Do invest in UITFs that meet your investment objectives and risk tolerance.

Do invest for the long term.

Do make sure you invest in UITF products that you understand.

Do demand confirmations of your investment transactions.

Do seek professional advice when in doubt about an investment.

Do review your investment strategy regularly.

Do inform your relationship manager if your financial circumstances and investment goals have changed.


Don't invest in a Fund if you do not understand its terms and conditions.

Don't invest in a Fund just because everyone seems to be investing in it.

Don't get emotionally attached to investments that have served you well in the past but are no longer suitable for your needs.

Don't try to time the market. Make regular investments to take advantage of cost averaging.

With the good economic movement nowadays and higher pay than years ago, the best time to invest is now!

To learn more about UITFs and how it works, inquire from participating bank/s nearest you.
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Publication:Business Mirror (Makati City, Philippines)
Date:May 31, 2019
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