Thank you for the emails I received lately from some of our
readers most especially to those who are planning to invest in UITFs.
Yes, UITF is similar with Mutual Funds aside from UITF is being
regulated by the BSP and mostly offered by banks while Mutual Funds is being regulated by the
SEC.
Based on my experience as investor, however, I see some
advantages of investing in UITF over Mutual Funds. I will discuss this later on
another post.
For today, I would like to answer the inquiries on how to
compute the investment returns with UITF investments.
When the UITF investment was confirmed by the bank, the bank
issued the Confirmation of Participation and the Participating Trust Agreement
to the investor. It is stated in the said documents the units of participation
of your investment with the fund.
The units of participation were computed by dividing the investment
capital over the prevailing Net Asset Value per Unit when the UITF investment was
confirmed by the bank.
If you want to check the daily NAVPU of a certain UITF
product, you can check it through the bank’s website.
HOW WAS THE NAVPU
COMPUTED?
The NAVPU or Net Asset Value per Unit is the current net
market value of a certain fund per unit of participation. It is computed by
taking the total market value of all the investment of the fund less the
expenses and liabilities divided by the total number of units of participation.
It is computed as follows:
HOW TO COMPUTE YOUR
UNITS OF PARTICIPATION?
Let us say you invested P50,000 in Equity Fund offered by
ABC Bank, Inc. on November 9, 2010. Your investment was confirmed when the
prevailing Net Asset Value per Unit is 2.0345.
Your units of participation were computed as follows:
HOW TO COMPUTE YOUR RETURN
ON YOUR INVESTMENT?
To calculate the return of your investment, check your fund’s
daily NAVPU in the bank’s website and multiply it with your units of
participation.
Your return of investment will be the difference of the
present amount of your investment less your principal. The percentage of the
return of investment will be the amount of the return of investment divided by
your principal.
Below is a sample calculations for your reference.
Let's say today your fund's NAVPU is 3.0457 and you want to know your gains. The % ROI computations will be as follows:
Let's say today your fund's NAVPU is 3.0457 and you want to know your gains. The % ROI computations will be as follows:
The above computations are just guidelines to check and
monitor the performance of your UITF investments. There are still some fees
that may deducted against your UITF investment if you are planning to redeem.
To get the
exact amount, I would recommend for you to inquire directly with the Trust
Department of your bank.
Happy investing, Juan!