Most of the features of UITF were already discussed under Pooled and Mutual funds. What I want you to know more is the difference between the types of pooled funds. So what makes UITF different from MF? Continue reading so you will know.
What is UITF?
Since UITF is under pooled funds, the system as to how it works is similar to Mutual fund. The difference is that you get to consult and invest in banks for UITF and investment companies for MFs. Almost all major and commercial banks offer UITF. Your investment in a UITF have been entrusted to a Trust expert who will take in charge of diversifying your portfolio assets so if you’re an investor, you will be called Trustor while in MF, you will be called shareholder.
HOW TO INVEST
Unlike other instruments where you may have difficulty searching and finding their office, not for UITF because you just need to consult your bank where you have deposits. In case the bank you want to invest in doesn’t offer UITF, just go to the leading major and commercial banks. Surely, they will offer you and a Certified Marketing Personnel will talk to you.
The rest of the investing process will be taken cared by the trust expert. It’s the same process like mutual fund.
The money you entrusted will be exchanged for a Certificate of Participation so you will soon know the number of units you have bought depending on the price of the Net Asset Value Per Unit (NAVPU)
The initial investment required to set up your own UITF account is Php 1,000,000.00. Yes I am not joking! It’s a six-figured number and only rich people can invest in UITF. So why the hell would I recommend it? Because that fee was just years ago (now exhale a huge breath and please don’t get mad at me). Banks trimmed it down to Php 100,000.00 until it became Php 10,000.00. Most banks today still requires you to have an initial investment of Php 10,000.00 while there are banks which can allow you to start with only Php 1,000.00.
HOW WILL IT WORK?
Since it is a pooled fund, the way it works is just the same as mutual funds. Returns would again depend from market conditions. It’s not guaranteed. It’s also not covered by the Philippine Deposit Insurance Commission (PDIC) which means that when you withdraw at the time the market is down, you can lose and the value you will get is lower than your investment capital and deposits. Not like time and savings deposits which is covered by the PDIC, you can exactly get the money you deposited the moment the bank will close or will declare its bankruptcy.
As to how the fund manager does his/her work, UITFs like Mutual Funds, also have their own stock market experts so your money can have the potential to earn high as 10% or more especially if your goal is to invest it for more than 5 years. Pooled funds cannot be traded during daytime because there is only one price for them every business day. I cannot give a more detailed explanation for this (for legal purposes) but you can contact or consult your bank and ask more to the UITF it offers. Please see appendix for list of banks and companies offering UITFs and Mutual Funds.
Accounting is a multifaceted discipline of identifying, measuring and communicating of an organization’s economic health. The discipline of accounting is best understood when one has strong conceptual understanding of other interconnected disciplines.
Every individual person wants to live a fulfilling life. After all, it’s his birth right.
Public memory is awfully short, and one of the reasons why financial crisis tend to recur as soon as the horrifying memories of the last crisis have died down. As we complete a decade of what was one of the worst and most wide spread financial crisis of last century, perhaps it is time to remind ourselves of the man-made follies that led to it, and try to ensure that they are repeated in near future. .