Another type of attractive investment is UITF or Unit Investment Trust Fund . Now lets understand how it works.

UITF is s an open-ended pooled trust fund denominated in pesos or any acceptable currency, which is operated and administered by a trust entity and made available by participation. Open-ended means as in investor you are allowed to invest and redeem anytime given that you are aware of the implications. Just a friendly reminder, buy low and sell high so we know that gains are maximized.

Simply told, UITF ay investment na pinasok sa isang Trust Fund, and the fund managers will take care of investing for you.

How do you invest in UITF? 

An investor must buy units of participation in the fund. This becomes your beneficial share. The units are called Net Asset Value Per Unit or NAVPU. The NAVPU will be your basis to know if your UITF is gaining or losing.

Example:

Unis purchased: 100

NAVPU at the time of buying: Php 10

NAVPU at the time of selling: Php 20

Gain: NAVPU Selling NAVPU Buying = Php 10 x 100 units = Php100

Simple as that, you only need to know how much and no. of unit purchased upon buying and you monitor from there. Remember, your goal if you want to sell your units. The longer the better, if possible wait for it to double before selling.

Where do you monitor NAVPU? Easy, go to website of the bank where you invest your UITF, search for daily NAVPU and thats it.

Saan ba iniinvest ang pera natin? 

Generally, there are four major types of UITF according to level of risk, return and investment, and time horizon.

Paano mo malalaman ang type of fund para sayo? 

When you open an account, bank representative will ask you to fill up questionnaires to determine the suitable funds for you. Just answer truthfully and it will determine which is best for you. Para mas simple, just ask yourself ilan taon mo kayang di galawin ang pera mo? Then look at the table above, and you can determine which one is for you.

Taxability and Charges 

The NAVPU is already net of taxes, trust fees and qualified charges. Beware though, if theres early withdrawal prior to holding period, there maybe applicable charges.

Holding period means the time na hindi mo pwede kunin ang pera mo, which normally are 30 days, some banks are 90 days.

 How to open an account? 

www.uitf.com.ph)

2. Visit the bank branch nearest to you.

3. Sign and complete the forms.

4. Submit necessary requirements (2 valid IDs, TIN no.)

5. Pay the initial amount of investment (as low as Php 1000 for some banks)

6. Secure your certificate of participation.

7. Monitor your NAVPU, make sure you are informed of the latest news. Its your investment so be responsible.

Remember, small amount of money + BIG amount of time = wealthy investor.