Unit Investment Trust Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our wide selection of BDO UITFs allows you to choose a fund or a combination of funds that is/are well suited to your needs, financial requirements and life goals.  With the BDO UITFs, your common investing concerns are addressed.

Diversification.

By investing in UITFs, risks are spread out across the various investments held by the pooled trust fund.

Liquidity.

While we generally recommend that you stick to your investment time horizon and  stay invested in the UITFs for a longer period of time, UITFs are designed to allow you to redeem units of participation at any time.

Affordability.

UITFs generally require a much lower minimum investment amount compared to other investment alternatives.

Better earnings potential.

Greater earnings potential is achieved without having to invest large sums of money. There are opportunities for potentially higher returns due to possible marked-to-market gains on top of accrued income from investments. UITFs provide access to financial instruments not readily available to retail investors.

Exempt from reserve requirements. 

UITFs are not subject to reserve requirements imposed on bank deposits. Thus, your fund's earning potentials are maximized.

Professional fund management. 

Participating in the UITFs allows you to gain access to the expertise and services of seasoned fund managers who are able to actively monitor the markets for possible investment opportunities and manage the risks for you.

Transparency. 

Trust entities are required to publish the UITF price at least weekly, allowing investors to compare investment performance of various fund managers.

Regulated product.

The management and administration of UITFs by Trust entities are governed by the Bangko Sentral ng Pilipinas (BSP). Thus, aside from the yearly triple audit conducted to BDO Trust, each of its UITFs is subject to a separate annual audit by an independent auditor that is acceptable to the BSP. The results of such audit may be made available upon your request. In addition, each UITF is required to have a BSP accredited third party custodian, who is tasked with safekeeping the securities of the UITF and performing independent marking-to-market of such securities. All these safeguards redound to the protection of the UITF investors.

Documentation
       • Confirmation of Participation ( COP)
       • Omnibus Participating Trust Agreement

Product Type
       • Trust Arrangement and not a Deposit

PDIC Coverage
       • Not insured with PDIC

Yield/Returns
       • Per BSP regulations, no indicative yields shall be quoted nor guaranteed
         to participants. Historical yields shall be used purely for reference only and
         should not guarantee future similar results. Income or loss is for the
         account of the investor.

Valuation Method
       • Mark-to-Market valuation

Investment Outlets
       • Bank deposits
       • Securities issued by or guaranteed by the Philippine government,
         or by the Bangko Sentral ng Pilipinas
       • Tradable securities issued by the government of a foreign country, any
          political subdivision of a foreign country or any supranational entity
       • Exchange-listed securities
       • Marketable securities traded in an organized exchange
       • Loans traded in an organized market
       • Financial derivatives instruments solely for the purpose of hedging risk
         exposure  of existing investments of the Fund

Investment Diversification Strategy
       • 15% exposure limit to any entity and its related parties. This limit
          does not apply to: 1) non-risk assets as defined by the BSP
          (e.g. government securities) ; and 2) exchange traded equity security which
          is included in an index and tracked by the UITF, the exposure limit of which
          shall be its actual benchmark weighting or 15%, whichever is higher.

Safekeeping of Securities
       • Done by a BSP-accredited 3rd party custodian

NAVPU availability
       • The NAVPU of the UITFs shall be published at the following schedules on
         each banking day or as close thereto as possible after all relevant
         information necessary for calculating the same shall have been collected.
       1. Money Market Funds (except BDO PERA STF) and Feeder Funds
           – 4:00 p.m.
       2. Bond Funds, Balanced Funds, Equity Funds and PERA UITFs
           – 7:30 p.m.

The NAVPU  may be obtained through:
         1. www.bdo.com.ph
         2. BDO Phonebanking - dial 631-8000
         3. www.uitf.com.ph
         4. Also published once a week in the BusinessWorld newspaper.

Reserves, Bank SBL and DOSRI limits
        • Exempted

Annual Audit
        • Quadruple Audits: BSP Audit, External Audit, Internal Audit plus External
          Audit for each UITF

Reports
        • Periodic reports are available at BDO TIG, BDO Branches and at the BDO
          website (www.bdo.com.ph)

Life is full of changes. You could be going to college, starting a career, changing jobs, getting married, having children, growing a business or planning to retire. As you progress through these changes, you need to continuously review your financial goals and make sure you are on track on where you want to go.

Always ask yourself what you want to achieve. It is only when you have a clear vision of your goals that you can truly aim for them. Also, ask yourself when you want to achieve your goals. Knowing when you want to achieve your goals will help you identify your investment time horizon.

This is important because how much time you have to invest will determine the type of investments that can help you achieve your goals. There are a number of investment opportunities available to you at BDO. Remember that whatever you invest in, “the key to investing is time.”

Generally, funds that are invested for longer periods achieve higher returns but because of the tenure, such investments are exposed to the volatility of price movements and interest rates and thus, are riskier. On the other hand, funds that are invested for shorter periods are less volatile or risky. Therefore, you should determine the length of time you can afford to keep your funds invested and the amount of risk that you are willing to take to achieve your desired returns.

 

Moderate, Short Term

Money market funds: Peso Dollar

Moderate, Long Term

Bond funds: Dollar Peso GS Fund

Aggressive, Long Term

Peso Balanced Fund Equity Fund

 

Basic Requirements

  1. Investor Profile Questionnaire (IPQ) 
  2. Client Investment Suitability (CIS) 
  3. Risk Disclosure Statement (RDS) 
  4. Declaration of Investor/s
  5. Omnibus Participating Trust Agreement

Other standard bank requirements per type of account: 

For Personal Accounts:

  • Photocopy of two (2) valid IDs

For Sole/Single Proprietorship Accounts:

  • Registration Certificate issued by the Department of Trade and Industry (DTI)
  • Mayor’s Permit for the Current Year
  • Application for Trade Name
  • Valid Personal IDs of the proprietor/tress
  • For the signatory/ies other than the proprietor/tress, a designation by the proprietor/tress through a Notarized Special Power of Attorney (SPA) showing the specimen signature of the officer/s or person/s authorized to operate the account and valid IDs of the designated signatory/ies

For Corporations:

  • Articles of Incorporation and By-Laws
  • Certificate of Incorporation (issued by SEC)
  • Certificate of Filing of Officers or List of Elected Officers for the current year
  • List of Directors
  • List of Principal Stockholders owning at least 2% of the Capital Stock
  • Notarized Board Resolution authorizing the opening of account and its authorized signatories
  • Valid Personal IDs of the Signatories
  • Verification of the authority and identification of the person purporting to act on behalf of the client
  • Secondary license/s issued by the SEC, if any

FREQUENTLY ASKED QUESTIONS (FAQs) ON UNIT INVESTMENT TRUST FUNDS (UITFs)

BDO-Trust has prepared the following UITF FAQs to provide basic information on the UITFs. The aim is to discuss the whats, hows and whys of UITF investing to enable clients to better understand the features, rewards and risks of UITF investing.

As a brief backgrounder, the UITFs were introduced in the Philippine market after the issuance of Bangko Sentral ng Pilipinas (BSP) Circular 447 in September 2004. This circular was subsequently amended by several BSP Circulars. Together, these circulars govern UITFs, aiming to align the management of these pooled funds by trust entities with international best practices and to ensure differentiation of such pooled funds from bank deposits and other direct liabilities. Industry standards for UITF client suitability assessment and risk disclosures are also defined in these regulations. 

As of year-end 2015, there are 24 trust entities in the Philippines offering an estimated 169 UITFs with assets under management of around Php674.88 billion (Source: www.uitf.com.ph).

1. What are Unit Investment Trust Funds (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 with the aim of meeting such objectives through investments in various financial instruments such as money market securities, bonds and/or equities.

2. Who can invest in UITFs?

Any person, association, corporation, entity or firm who/which has the legal capacity to contract or establish a trust may invest in the UITFs.

3. What benefits do I get from investing in a UITF?

Our wide selection of BDO UITFs allows you to choose one or a combination of UITFs that can meet your investment needs, financial requirements and life goals. With BDO UITFs, your common investing concerns can be addressed.

  • Diversification. By investing in UITFs, risks are spread out across the various investments held by the pooled trust fund. Regulations require that the combined exposure of the UITF to any entity and its related parties shall not exceed 15% of the market value of the UITF, except government securities. Another exception is for the equity funds that track the index, in which case, investments in particular stocks of a UITF can exceed the 15% limit to the extent of its share in index weight. 
  • Liquidity. While it is advisable to stay invested in the UITFs for at least the time horizon recommended for a particular UITF, UITFs are designed to allow you to redeem units of participation at any time. This is because the allowed investments of UITFs are limited to bank deposits/deposit substitutes and tradable investments.
  • Affordability. UITFs generally have low minimum investment requirements. Additional investments may be made in tranches as funds become available to the client.
  • Better earnings potential. Greater earnings potential is achieved without having to invest large sums of money. There are opportunities for potentially higher returns due to possible marked-to-market gains on top of accrued income or dividends from investments. UITFs provide access to financial instruments not readily available to retail investors.
  • Exempt from reserve requirements. UITFs are not subject to reserve requirements imposed on bank deposits, thus your funds are fully invested.
  • Professional fund management. Participating in the UITFs allows you to gain access to the expertise and services of seasoned fund managers who are able to actively monitor the markets for investment opportunities and manage the risks in line with the objectives and allowed investments of a particular UITF.
  • Transparency. Trust entities are required to publish the UITF price at least weekly, allowing investors to compare investment performance of various fund managers. Moreover, UITF prices are uploaded daily for UITFs enrolled in www.uitf.com.ph.
  • Regulated product. The management and administration of UITFs are governed by the BSP. Each UITF is subject to a separate annual audit by an independent auditor acceptable to the BSP, the results of which are available to investors upon request. In addition, each UITF is required to have a BSP accredited third party custodian, who is tasked with safekeeping the securities of the UITF and performing independent marking-to-market of such securities.

4. What is the minimum amount needed to invest in BDO UITFs?

Participation in the BDO UITFs may start for as low as PhP 10,000. (For more information on the minimum participation amounts of different UITFs, click here.  However, with the BDO Easy Investment Plan (EIP), you can invest in selected UITFs for as low as P1,000 a month contributed on a regular basis. (To know more about the EIP, click here.)

5. What are the different types of UITF?

There are four (4) general classifications of UITFs from which an interested investor can choose from. These are listed below according to ascending levels of risk, return and recommended investment time horizon.

  1. Money Market Funds. For moderate investors who wish to be invested in short term, fixed income deposits and securities with a portfolio duration of no more than one (1) year. Recommended for participants who can keep invested for at least six (6) months.
  2. Bond Funds. For moderate investors who wish to be invested in a portfolio of bonds and other fixed income securities with a portfolio duration which may exceed one (1) year. These may further be classified into Intermediate Funds (which limits duration up to 3 years), Medium Term Funds (which allows a duration of up to 5 years) and Long Term Funds (where the fund mandate allows a duration of greater than 5 years). Recommended for participants who can keep invested for at least three (3) years.
  3. Balanced Funds. For balanced investors who wish to achieve a higher return by investing in a portfolio of fixed income securities and equities. Recommended for participants who can keep invested for more than three (3) years.
  4. Equity Funds. For aggressive investors who wish to invest substantially in equities to achieve a higher long-term appreciation of growth of capital. Recommended for participants who can keep invested for more than three (3) years.

The following are the BDO UITFs available to you:

  1. Money Market Funds
    1. BDO Peso Money Market Fund
    2. BDO Dollar Money Market Fund
    3. BDO Institutional Cash Reserve Fund
  2. Bond Funds
    • BDO GS Fund
    • BDO Peso Bond Fund (formerly BDO Peso Fixed Income Fund)
    • BDO Dollar Bond Fund
    • BDO Medium Term Dollar Bond Fund (EPCIB US Dollar Fund)
    • BDO MERIT Fund
  3. Balanced Fund
    • BDO Peso Balanced Fund
  4. Equity Funds
    • BDO ESG Equity Fund
    • BDO Sustainable Dividend Fund
    • BDO Equity Index Fund
    • BDO Equity Fund (EPCIB Equity Fund)
    • BDO Institutional Equity Fund
    • BDO Focused Equity Fund

UITFs may also be structured as Feeder Funds which are mandated to invest at least 90% of its assets in another pooled investment fund or collective investment scheme. BDO Feeder Funds are invested in dollar-denominated equity funds managed by reputable global fund managers who have undergone the thorough screening process employed by BDO Trust. These UITFs are recommended for aggressive investors seeking capital growth and who can keep invested for more than three (3) years.

The following are the BDO Feeder Funds available to you:

  • BDO Developed Markets Property Index Feeder Fund
  • BDO Global Equity Select Feeder Fund
  • BDO China Equity Feeder Fund
  • BDO US Equity Feeder Fund

6. How do I know which UITF is suitable for me?

Your choice of UITF should conform to the length of time you can afford to keep your funds   invested and the degree of risk that you are willing to take in order to achieve your desired returns for your specific financial goals. UITFs are established and managed based on a set of investment objectives and strategies, and these have varying levels of risks and returns.

Before investing in a UITF, ask a UITF certified marketing personnel to help you assess your investment needs and objectives through a conduct of a Client Suitability Assessment (CSA). The CSA will help you understand the type of investor you are and will provide you a general idea of your investment preference which will serve as the basis for the presentation/recommendation of what UITF/s is/are suitable to you. 

You may also take the CSA via the UITF Online Investing Facility. Just log-in to your BDO Personal Online Banking account and answer the assessment online.

7. How do I invest in the UITFs?

  • In order to participate in any of the UITFs, you should purchase participating units in the fund. A participating unit has a daily “price” which is called the Net Asset Value per Unit (NAVPU).   
  • After admission to the fund, participants of the UITF will receive a Confirmation of Participation (COP), as evidence of participation. This will contain the details of your UITF investment such as the amount of participation, NAVPU on the date of purchase and the number of participating units. Also, at the back portion of the COP is a copy of the Participating Trust Agreement which contains the terms and conditions governing the client and the Trustee, subject to the provisions set forth in the Declaration of Trust (DOT) or Plan Rules of the particular UITF.

8. How do I determine the market value and returns of my UITF investments?

On any given date, you can compute the market value of your UITF investment by multiplying the number of units you own by the NAVPU for the day, which is available daily through various channels like any BDO branch and this link

Market Value Computation Example: 

No. of Units Owned 100 units
NAVPU for the Day Php 1.50
Market Value of UITF Investment 100 units x Php 1.50 = Php 150

After getting the market value of your UITF investment, you can determine the returns by comparing it with your original purchase amount. If the value of your UITF increased, there is a gain/earning and if it decreased, there is a loss.

Returns Computation Example:

Computed Market Value of UITF Investment Php 150
Original Purchase Amount of UITF Php 100
Gain/ (Loss) Php 150 – Php 100 = Php 50

Since the market value is higher than the original purchase amount in this example, you are gaining P50 for your participation at point of computation.

For a convenient way of determining the value, earnings or loss of your UITF investment, you may use the UITF calculator here.

 

9. Are the returns from investments in UITFs guaranteed?

UITFs are not deposit accounts but are investment products offered by Trust Entities. Participants in UITFs are making an investment and not a deposit. Therefore, BDO UITFs are not considered as obligations of BDO nor can the principal and returns be guaranteed by BDO or its affiliates and subsidiaries. UITFs are not insured or governed by the Philippine Deposit Insurance Corporation (PDIC). 

Although not a guarantee of similar future results, historical performance would show that the BDO UITFs have a track record of outperforming their respective benchmarks and have rewarded their investors with returns corresponding to the risks that these investors have taken. (Click here for the performance of the BDO UITFs)

10. How are Return On Investments (ROIs) of UITFs stated?

Following global best practices, ROIs of UITFs are based on absolute yields. Absolute yield is the actual ROI of a particular investment product during a specific time frame.

To illustrate:

  1. Cost of investment is P10,000.00. After 30 days, the total market value is P10,100.00. The appreciation in value is P100.00. The absolute yield for 30 days is 1% (P100.00/P10,000.00).
  2. Cost of investment is P10,000.00. After 3 months or 90 days, the total market value is P20,000.00. The appreciation value is P10,000.00. The absolute yield for 3 months is 100% (P10,000.00/P10,000.00).

11. What is difference between the absolute yield and the annualized yield?

An annualized yield is when absolute yield is converted to its per annum equivalent.

To illustrate using above examples:

  1. The equivalent annualized yield is 12% p.a. (or 1% X 12 months)
  2. The equivalent annualized yield is 400% p.a. (or 100% X 4 quarters)

Since UITFs use a marked-to-market valuation methodology, it is not practicable to use annualized yields similar to that used in Time Deposit quotes.

12. What are the potential risks in investing in a UITF?

The underlying securities that a particular UITF is invested in will determine the kind of risks you will be exposed to when you invest in the fund. These are samples of risks when it comes to investing:

  • Interest Rate risk. The potential for an investor to experience losses due to changes in interest rates;
  • Market/Price risk. The potential for an investor to experience losses due to changes in the market prices of securities (e.g. bonds and equities);
  • Liquidity risk. The inability to sell or convert assets into cash quickly or where conversion to cash is possible but at a loss;
  • Credit risk. The possibility of loss due to a borrower’s or issuer’s failure to repay principal and/or interest on securities issued;
  • Reinvestment risk. The possibility of having lower returns or earnings when maturing funds or the interest earnings of funds are reinvested;
  • Hedging risk. The possibility for an investor to experience losses brought about by the inherent risks which the underlying investment is exposed to despite the use of a hedging instrument;
  • Foreign Exchange risk. The possibility for an investor to experience losses due to fluctuations in foreign exchange rates; and
  • Country risk. The possibility for an investor to experience losses arising from investments in securities issued by/in foreign countries due to the political, economic and social structures of such countries.

Please click this link to read through the complete Risk Disclosure Statement.

13. How do I make my contributions in a UITF?

Just visit any BDO branch nearest you or log-in to your BDO Personal Online Banking account to invest in the UITFs. Contributions may be made in cash, BDO and manager’s check or debit from your BDO account, as applicable. For information on the dealing time per UITF, please click here.

14. How do I redeem my investments in a UITF?

For UITF investments coursed through a BDO branch, fill-out the Notice of Redemption of Participation found at the lower portion of your COP and submit this to the same BDO Branch where you opened your UITF.

For UITF investments done online, you need to submit your redemption request via the UITF Online Investing Facility.

For more information on the dealing time and settlement period per UITF, please click here.

15. What are the management fees that I will pay when investing in the BDO UITFs?

As compensation for the Trustee’s services and to cover for the costs involved in managing the UITF, a trust fee, which may range between 0.50% and 1.50% is charged to the fund and is already incorporated in the daily NAVPU of the particular BDO UITF. There are no agent’s commissions which is common practice for mutual or insurance funds.

16. Are investment proceeds from the UITFs subject to taxes?

Taxes, when due, are already deducted when computing the NAVPU. Thus, proceeds from UITFs are already net of taxes.

17. Are there any penalties when investing in BDO UITFs?

Except for the BDO Peso Money Market Fund (PMMF), all other BDO UITFs are subject to a 30-day minimum holding period. Redemption of your UITF investment within the holding period will be subject to an early redemption fee, which will be deducted from your redemption proceeds. To know the early redemption fees of BDO UITFs, please click here.

18. How do I monitor the performance of my investment?

To monitor the performance of your UITF investments, the NAVPU of the different UITFs are available in the following channels:

  • BDO Homepage (http://www.bdo.com.ph)
  • UITF Industry website (http://www.uitf.com.ph)
  • For Globe, Smart and Sun subscribers, just text SMAC NAV and send to 2966
  • BDO Phonebanking: (63)(2)-631-8000
  • BDO Personal Online Banking, please click here for the enrollment process in Internet Banking. With BDO Personal Online Banking, you can view the status and transaction history of all your UITF investments.

Also, a UITF Yield Calculator is available via this link. This automatically computes for the client’s gains/ losses simply by inputting the purchase and redemption dates of particular UITF investments.

19. Where can I find information updating me about the investments and performance of the BDO UITFs?

Regulations require that disclosures on each UITF be made available to its participants at least every calendar quarter. These disclosures, in the form of Key Information and Investment Disclosure Statement (KIIDS) prescribed by the BSP across the industry, include the performance and the update of the prospective and outstanding investment outlets of each UITF. The KIIDS aims to provide UITF participants with key information and disclosure to facilitate better understanding and comparison of UITFs offered by trust entities. BDO Trust prepares the KIIDS of all BDO UITFs on a monthly basis, and can be found here under the Disclosures section.

BDO Unit Investment Trust Funds (UITFs) are trust products. They are NOT DEPOSITS and are not insured by PDIC. Due to the nature of the investments and the marked-to-market valuation thereof, yields and potential yields cannot be guaranteed. Any income or loss arising from market fluctuations and price volatility of the securities held by the UITFs, even if invested in government securities, is for the account of the investor. As such, units of participation of the investor in the UITFs, when redeemed, may be worth more or be worth less than his initial investment/contribution. Historical performances, when presented are purely for reference purposes and are not guarantees of future results. BDO, as Trustee, is not liable for losses, unless upon willful default, bad faith or gross negligence. 

Prior to admission of an investor in the UITFs, BSP Circular 593 requires that BDO perform a client profiling process to guide the investor in choosing investments best suited to his objectives, risk profile and experience. Prior to making investments, an investor must read the complete details of the UITF in the plan rules, understand the risks involved which are provided in the Risk Disclosure Statement, make his own risk assessment and when necessary, seek independent/professional opinion. The plan rules governing each of the BDO UITFs, as well as the external auditor’s report for each fund, are available at the office of BDO Trust and Investments Group for any interested investor. To invest, an investor is required to submit/accomplish the following documentary requirements for UITFs: valid identification documents as required by the Anti-Money Laundering Act (AMLA), Risk Disclosure Statement and client suitability assessment forms. 

An investor is also advised that BSP Circular 593 likewise requires that the client suitability assessment forms be updated whenever the characteristics, preferences or circumstances of the investor change or at least once every three years, provided that if the investor does not notify the trust institution of such change, he is deemed to have waived his right for a new client suitability assessment for the prescribed period.

Investments in the specific UITFs are evidenced by a Participating Trust Agreement and a Confirmation of Participation.

BDO UITF Key Information and Investment Disclosure Statements (KIIDS)
Key Information and Investment Disclosure Statements (KIIDS)
(December 2017
)
Key Information and Investment Disclosure Statements (KIIDS)
(November
 2017)
BDO Peso Money Market Fund BDO Peso Money Market Fund
BDO Short Term Fund BDO Short Term Fund
BDO GS Fund BDO GS Fund
BDO Peso Bond Fund (formerly BDO Peso Fixed Income Fund) BDO Peso Bond Fund (formerly BDO Peso Fixed Income Fund)
BDO Merit Fund (Intermediate Term)
BDO Merit Fund (Medium Term)
BDO Merit Fund (Intermediate Term)
BDO Merit Fund (Medium Term)
BDO Peso Balanced Fund BDO Peso Balanced Fund
BDO Equity Fund BDO Equity Fund
BDO Equity Index Fund BDO Equity Index Fund
BDO ESG Equity Fund BDO ESG Equity Fund
BDO Institutional Equity Fund BDO Institutional Equity Fund
Sustainable Dividend Fund (SDF) Sustainable Dividend Fund (SDF)
Focused Equity Fund (FEF) Focused Equity Fund (FEF)
BDO Dollar Money Market Fund BDO Dollar Money Market Fund
BDO Dollar Bond Fund BDO Dollar Bond Fund
BDO Medium Term Dollar Bond Fund BDO Medium Term Dollar Bond Fund
Institutional Cash Reserve Fund Institutional Cash Reserve Fund
BDO Developed Markets Property Index Feeder Fund BDO Developed Markets Property Index Feeder Fund
BDO China Equity Feeder Fund BDO China Equity Feeder Fund
BDO Global Equity Select Feeder Fund BDO Global Equity Select Feeder Fund
BDO US Equity Feeder Fund BDO US Equity Feeder Fund
BDO Europe Equity Feeder Fund BDO Europe Equity Feeder Fund
BDO Japan Equity Feeder Fund BDO Japan Equity Feeder Fund

 

Note: The BDO Peso Fixed Income Fund was renamed as the new BDO Peso Bond Fund effective February 10, 2017.

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