Allowable PERA Investment Products


Under PERA, the allowed investment products are:


1.     Unit Investment Trust Fund (UITFs)

Unit Investment Trust Funds (UITFs) are ready-made investments that allow the pooling of funds from different investors with similar investment objectives.  These funds are managed by professional fund managers and are invested in various financial instruments such as money market securities, bonds and equities, which are normally available to bigger investors only.


2.     Mutual Fund

A Mutual Fund is an investment company that pools together money from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets. The mutual fund issues shares to its investors representing their holdings in the fund. Mutual Funds are operated by professional fund managers who allocate the fund’s investments and attempt to produce capital gains and/or income for its investors.


3.     Annuity Contract

An annuity is a long term investment that is issued by an insurance company designed to help protect investors from the risk of outliving their income. Insurance companies guarantee to pay investors an income for life or as long as the annuity contract specifies. The income will be secured from both market and interest rate risks and can be used for retirement needs.


4.     Insurance pension product

Insurance pension products are long-term savings products that investors contribute to on a voluntary basis, complementing state and workplace pensions. The main purpose an insurance pension product is to provide investors with a lifetime retirement income to ensure that financial resources are sufficient for retirement needs. Insurance pension products may have insurance coverage, flexible investment options, living or cash benefits.


5.     Pre-need pension plan

A Pre-need pension plan is a contract that provide payment of monetary considerations at the time of actual need or agreed maturity date. Through its easy payment programs, it offers planholders affordable means to prepare for their retirement. A pre-need plan may also carry insurance benefits, making it a complete financial planning program for Filipino families and setting it apart from other financial counterparts.


6.     Government securities

A government security is a bond issued by the Republic of the Philippines with a promise of repayment upon maturity. Government securities such as treasury bills, fixed rate treasury notes, and retail treasury bonds may be issued as discounted instruments or promise periodic coupon or interest payments. Government securities are usually considered low-risk investments because they are backed by the taxing power of a government.


7.     Share of stock

A share of stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings. There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. Investors buy and sell shares of stocks through a stock exchange and earn capital gains through the increase in the stock prices.


8.     Exchange-traded bond

Bonds are commonly referred to as fixed-income securities. Fixed income securities are debt securities issued by corporations, governments or government agencies with stated interest rates maturity dates. Fixed Income securities may be in the form of bills, notes, bonds, commercial papers, or promissory notes.

In the Philippines, majority of the bond trading transactions are processed in the Philippine Dealing and Exchange Corporation (PDEX), the local exchange of the bond market.