Unit Investment Trust Funds
Unit Investment Trust Funds
UITFs were introduced in the Philippine Market by various trust entities in 2005, after the Bangko Sentral ng Pilipinas (BSP) issued Circular 447 in September 3, 2004. The Circular, jointly crafted by the BSP and trust practitioners, was designed 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 and other direct liabilities of financial institutions. The UITFs are also governed by BSP Circular 593, which defines the industry standards for UITF client suitability assessment and risk disclosure.Click here to learn more
UITFs have the following distinct advantages:
- Managed by experienced fund managers.
- Higher returns since UITFs are fully invested as there are no reserve requirements.
- Very liquid because UITFs are invested only in tradable securities which are valued at market.
- Regulatory measures are in place to inform and protect investors. These are:
- Securities safekeeping and valuation by a third party custodian/s
- Audits by BSP-accredited external auditors
- Weekly publication of Net Asset Value per Unit (NAVPU) in a newspaper of general circulation
- Standardized UITF training program for sales personnel
- Quarterly reports to participants require
Valuation of the UITF is based on the marked-to-market NAVPU computed every banking day. For BDO UITFs, the NAVPU is available after 4:00 pm for the money market funds and after 7:00 pm for the bond, balanced and equity funds. It is accessible via phonebanking and text daily. For phonebanking, dial (632) 631-8000 and follow the voice instructions. For text (available after 8:00 pm for all funds), type SMAC<space>NAV and send to 2966 (P2.50/text for Smart and Globe; P2.00/text for Sun).
The Net Asset Values (NAV) of the UITFs are net of management fees, which range between 0.5% and 1.0% p.a. of NAV. They are also net of custodianship fees, external audit fees and financial information providers' fees, which together amounts to no more than 0.1% p.a. of Average Daily NAV.
Based on the NAVPU, acceptances and notices of redemption of participation in the UITF are serviced by BDO Branches on or before 11:30 am on a banking day for money market funds and on or before 12:00 noon for the remaining funds.
The schedule of redemptions are as follows:
| Name of UITF | Redemption Payout |
|---|---|
| BDO Peso Money Market Fund and BDO Dollar Money Market Fund | After 4:00 pm on the same banking day the notice of redemption is received by the BDO Branch |
| BDO Peso Bond Fund, BDO GS Fund and BDO Peso Fixed-Income Fund | One (1) banking day after notice of redemption is received by the BDO Branch |
| BDO Dollar Bond Fund and BDO Medium Term Dollar Bond Fund (formerly EPCIB US Dollar Fund) | Three (3) banking days after notice of redemption is received by the BDO Branch |
| BDO Peso Balanced Fund and BDO Equity Fund | Four (4) banking days after notice of redemption is received by the BDO Branch |
The value of redemption is computed based on the NAVpu on the date the redemption notice was received by the BDO Branch and not on the payout date. When in the opinion of the Trustee, the interest of the Fund/Participants so requires, BDO reserves the right to require a five-banking-day written notice in advance of any redemption of participation.
Redemptions within the prescribed minimum holding periods are subject to early redemption fees as shown in the table below.
| BDO UITF | Minimum Holding Period | Early Redemption Fee |
|---|---|---|
| BDO Peso Money Market Fund | None | None |
| BDO Peso Bond Fund | 30 calendar days | 0.50% of Original Participation Amount |
| BDO GS Fund | 30 calendar days | 0.50% of Original Participation Amount |
| BDO Peso Fixed-Income Fund | 30 calendar days | 0.50% of Original Participation Amount |
| BDO Peso Balanced Fund | 30 calendar days | 0.50% of Original Participation Amount |
| BDO Equity Fund | 30 calendar days | 1.00% of Original Participation Amount |
| BDO Dollar Money Market Fund | 45 calendar days | 0.50% of Original Participation Amount |
| BDO Dollar Bond Fund | 45 calendar days | 0.50% of Original Participation Amount |
| BDO Medium Term Dollar Bond Fund (formerly EPCIB US Dollar Fund) | 45 calendar days | 1.00% of Original Participation Amount |
Monthly fund performance reports are available at BDO Branches and at the BDO Website.
Investments in fixed-income and equity securities are held by Standard Chartered Bank, Deutsche Bank AG, Manila and Philippine Depository and Trust Corp. (PDTC) as the custodians of the underlying investments of the BDO UITFs. The custodianship, maintenance and transaction fees are charged to the particular fund.
Pre-requisites and Disclosures for UITF Investing
Prior to admission of participants 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, investment time horizon 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 latest annual external auditor's report for each fund, are available at the office of BDO Trust and Investments Group for any interested participant. 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.
The BDO UITFs are trust products. They are not deposits and are not insured by Philippine Deposit Insurance Corp. (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.
UITF Account Opening Forms: