UITFs and Mutual Funds have been one of the best ways to invest your money nowadays. This is because these funds give you access to investments managed by financial experts with just a minimum capital requirements.
Although these two funds have both similarities and differences, investing in them gives an investor a potential high yield given enough time.
Let’s take a closer look on both UITFs and mutual funds offered by different banks and investment companies. Who has the best performing UITF and mutual fund?
When viewing the performance below, take note that past performance is not an indicative of future performance. In addition, mutual funds have a sales load fee of 2% which is deductible upfront upon investment to the fund. That’s an additional cost and a decreased return on the part of the investor.
Below is the top 10 best performing peso-denominated mutual funds as of November 9, 2012 YTD. All of them are equity funds except GSIS Mutual Fund and Philam Fund which are both balanced funds. BPI Philippine Stock Index Fund has the best return with 26.72% and to top it off, it has NO sales load as compared to other mutual funds!
Below are the top 10 best performing UITF product as of November 9, 2012 YTD. All of them are equity funds except BDO Peso Balanced Fund, Metro Balanced Fund, and China Bank Balanced Fund. The best performing fund is Union Bank Large Cap Philippine Equity UITF with a nice yield of 39.9%!
However, don’t get too much excited on Union Bank Large Cap Philippine Equity Fund. Based on research, they have “sales load” similar to mutual funds. In addition, their NAVPU computation is very tricky. When you checked their website, they have “bid”, “offer” and “mid/last” price. Based on my research, when you invest in the fund, the ‘offer’ NAVPU will be used. When you redeem your units, the ‘bid’ NAVPU will be used. They have high OFFER NAVPU and lower BID NAVPU. Higher ‘Offer NAVPU’ means less units to be bought while lower ‘BID NAVPU’ also means lesser gains for the investor. What’s interesting is, the difference between their OFFER and BID NAVPUs is huge and Union Bank is earning a lot from the spread cost!
In terms of performance, hats off to BPI for their Index Funds. BPI has two Index Funds available. These are the Philippine Dollar Bond Index Fund, a dollar-denominated bond fund UITF product and Philippine Stock Index Fund, a peso-denominated equity mutual fund.
Both of these funds have been performing really really well. Philippine Dollar Bond Index Fund tracks the JP Morgan Asia Credit Index as its benchmark while Philippine Stock Index Fund tracks the Philippine Stock Exchange Composite Index (PSEi) as its benchmark. I must say that these are the pride products of BPI.
Last September, I made an article that focuses on Philippine Dollar Bond Index Fund. In my own personal opinion, this is one of the best ways to invest your US dollars if you’re a dollar earner or have dollar savings
BPI has the widest variety of UITF products. With the addition of Odyssey Funds which they recently acquired from ING, they now both offer BPI Investment Funds and Odyssey Funds that give the widest array of choice to their investors.
I made a special mention on BPI UITF products because of two things. They are the only bank which does not have holding periods in all of their UITF products and they are the only bank which allows additional top-up investments online through BPI Express Online.
No Holding Period. BPI recently waived all the holding periods last August of this year 2012. This means you can pull out your money from the fund anytime you want. This gives a chance for investors like you to take advantage of the ultimate strategy of buying low and selling high. Investors may lock in profits by selling units when NAVPU is high and buying more units when the NAVPU is low.
Online UITF Investing. BPI Express Online is one of the best platforms for internet banking. It’s a must to have it when you’re a BPI depositor. They are the only bank where you can invest through their UITF products without the hassle of going to the bank EXCEPT for account opening.
The only time you have to go to the branch is when you open an account. This is because you have to nominate your settlement account. Once you have it nominated and enrolled on BPI Express Online, then you can make additional investments online. No need to visit branch. This is very beneficial to OFWs who don’t have the luxury of time to visit their branches.
When you open an account, just remember to tell the one assisting you that you want to enroll your UITF investments to BPI Express Online. Once you are enrolled, you have the capability to view the value of your investments including its net return. What’s best is that even if you fully redeemed all the units on your UITF investment, your account will remain and will not be closed.
Odyssey Philippine High Conviction Equity Fund. One of the UITF products offered by BPI is their highly hyped Odyssey Philippine High Conviction Equity Fund. This is so because this is one of the best performing fund among UITF and mutual funds BEFORE.
Looking more closely on where the fund was invested, it suffices to say that the recent downfall of the return of the fund can be attributed mainly to the falling stock price of Philex Mining. It’s all over the news. Philex Mining has been involved in environmental sanctions in their Padcal Mine. They were even asked by the government to pay 1 billion pesos worth of damages. This caused the stock price to fall tremendously.
I was invited recently by my branch manager to attend a Coffee Talk session together with the rest of their Preferred Banking Clients. It was an investment insights seminar to brief BPI investors about the different investment funds that they offer. One of the attendees asked the direction of the Odyssey Philippine High Conviction Equity Fund as the fund is experiencing a downturn on its return due to their holdings on mining stocks particularly that of Philex Mining. The seminar facilitator told us that the next big thing are entertainment stocks. The fund managers are keen on unloading mining stocks to re-invest on entertainment stocks. In the news recently is casino developer Belle Corp. signing a joint deal Macau’s Melco to form a casino complex at Paranaque City.
Every investment carries a risk. Before investing in a mutual fund and UITFs, remember to assess your risk profile whether you’re a risk averse, moderate risk, or aggressive investor. After assessment, then you can choose the fund which suits you best. Happy Investing!