What are mutual funds and UITFs?
Money from various investors are pooled together by professional fund managers to make up "baskets" of cash, bonds, stocks, and/or other investment assets. As an investor, your ownership is represented by the number of shares or units you hold in the fund. As share/unit prices (NAVPS or NAVPU) increase, so does your investment's value.
Mutual funds and UITFs are similar such that a fund manager buys and sells securities on behalf of the investors. Basic differences are as follows:.
Banks and Trust Corporations.
What you own
Shares in the investment company reported in NAVPS (Net Asset Value Per share)
Units of participation in the Trust Fund reported in NAVPU (Net Asset Value Per Unit)
Securities and Exchange Commission (SEC)
Bangko Sentral ng Pilipinas (BSP)
What are the different types of mutual funds and UITFs?
Safest Investment with the lowest return.
Composition: Time deposits, treasury bills, other short-term bonds
Risk level: Very Low
Provides stability and moderate income.
Composition: Debt instruments with fixed interest rates issued by the gov’t
or private corporations
Risk level: Low
Combines the stability of bonds and the growth of potential stocks
Composition: Government securities, corporate bonds, stocks
Risk level: Medium
Highest risk with the highest potential over the long term
Composition: PSE index, dividend yielding and/or growth stocks
Risk level: High
Why invest in a mutual fund or UITF?
|• You can rely on expert fund management.
|• Low minimum investment. Invest for as low as Php1,000.
|• Reduce risk through automatic diversification.
|• Always liquid. Buy or redeem anytime.