Monday, September 21, 2009

Investing in UITFs

UITFs or Unit Investment Trust Funds are offered by banks and work very much like mutual funds. The bank's trust department pool the investments and place it in stocks, bonds, money markets or a combination of these. They also provide diversification of investments, exemption from the witholding tax upon redemption and some have a low investment requirement of 10000 pesos. In choosing the right UITF, consider the stability of the bank offering it and the returns it has achieved. I have done some research on UITFs and am leaning towards BDO. It is currently the country's largest bank and their funds have performed well compared to other banks. They also have low investment requirements.

Please remember that UITFs are not deposit products, hence they are not guaranteed by PDIC. As with most investments, they also move up, down and sideways. As I always say, spreading our investments will offer the best protection. You can visit www.uitf.com.ph to compare the various funds available. Happy investing!

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