Investing in UITF and Mutual Funds


I recently started investing in Unit Ivestment Trust Funds (UITF) and Mutual Funds. Even though a lot of these funds performed well the past years I made sure to spread my investments in different establishments, as the saying "Never put all your eggs in one basket".

UITF and Mutual funds offer similar products, they differ mainly by how they charge their fees and the institution that handles your money. UITF are offered by banking institutions while Mutual funds are invested in Mutual Fund Companies. I personally prefer UITF since you can link your bank account to your UITF account.


One of the basis for picking funds is good past performance. I chose funds that have low minimum initial investments, which allows me to regularly add into these funds in small amount.  Since UITFs and Mutual Funds are not covered by PDIC, I divided my investment into two funds to minimize my risk.

I placed 50% of my funds in a Bond fund to lessen the risk of losing my initial investment. Bond funds are less volatile to Equity funds, but also offer lesser returns. I invested the other 50% of my funds in an Equity Fund. This way half of my funds has the potential to earn a higher return. When investing in Equity funds you run the risk of losing your initial investment, although these loses are only in paper, I am not sure how I will handle a huge paper loss. This is exactly why I decided to invest half of my funds in bonds.

The minimum holding period wasn't a deal breaker for me. My intention was to invest these funds for the long run. The only advantage I can see on having a short holding period is you can redeem your investment if ever a better opportunity arises.

If you are interested in investing in UITFs and Mutual Funds, I suggest you visit and check the performance of  these funds at http://uitf.com.ph/ for Unit Investment Trust Funds and http://pifa.com.ph/ for Mutual Funds

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