On September 3, 2004, the Bangko Sentral ng Pilipinas (BSP) issued Circular 447 which mandated the creation of the unit investment trust funds (UITFs). This was done to align the operation of pooled funds under management by trust entities with international best practices and to ensure the differentiation of such pooled funds from bank deposits.
Unit investment trust funds (UITFs) have the following distinct advantages:
1·) Managed by experienced fund managers.
2·) Higher returns since Unit investment trust funds (UITFs) are fully invested as there are no reserve requirements
3·) Very liquid because Unit investment trust funds (UITFs) are invested only in tradable securities which are valued at market
4·) Regulatory measures are in place to inform and protect investors. These are:
- Securities safekeeping and valuation by a third party custodian/s
- Audited by BSP-accredited external auditors
- Weekly publication of NAVpu in a newspaper of general circulation
- Standardized Unit investment trust fund (UITF) training program for sales personnel
- Quarterly reports to participants required
Participation in a Unit investment trust fund (UITF) is evidenced by a Participating Trust Agreement and a Confirmation of Participation. These document the proportionate beneficial interest of each participant in the Unit investment trust fund (UITF).
Depending on the plans available in different banks. Investing in Unit investment trust fund (UITF) can be as low as 10,000.00 pesos, and is fast becomming the no.1 investment instrument in the Philippines. Since its low initial deposit and high yielding interest rate make it an attractive alternative to the regular time deposits.
The downside to this Unit investment trust funds (UITFs) are not covered by the Philippine Deposit Insurance Corporation (PDIC). Incase the bank goes under. your investment are not covered by this insurance.
Contact your Local banks and ask for this investment instrument.