Financial Wanders | UITF Investment and Investment Risk Profile

If you read my blogs, you already know that I mentioned my UITF journey in several of my posts. A note to the reading public though, I am not a financial advisor and certainly not an expert in financial management. What I write is normally just based on my understanding of what I read/researched and my experiences about UITF and investment in general.

So what really is UITF? 

UITF or unit investment trust fund is an investment vehicle offered by banks to the investing public. It is a pooled funds (can be peso-denominated or dollar or other currencies) collected from investors and is managed by professional fund managers. In UITF, funds collected from the public are pooled together and invested in different financial instruments like bonds and equities.

UITF, though managed by professional fund managers, is not risk-free. It is subject to risk factors like changes in interest rates and stock market fluctuations. That’s why it is important that an individual find out his risk profile first before diving into UITF investments to minimize loses.

What is investment risk profile?

Investment risk profile is an individual’s evaluation of his ability to take risks on the money he’s going to invest. The areas subjected to evaluation include an individual’s financial capability in terms of his earnings, savings and investment time horizon. This means understanding the current financial state of an individual and the length of time one is able to let his money out for investment. Knowing an individual's risk profile is important to help find out the right portfolio appropriate to an individual's profile and to minimize the risks accompanied by this investment vehicle.

Investment risk profile is generally categorized into three; conservative, moderately aggressive and aggressive. Conservative investment profile means an individual can only accept minimal risk with minimum returns, one that's normally focused on preserving capital. Funds for conservative profile usually includes money market funds, a fund that seeks to invest on short-term fixed-income instruments and assets with high liquidity (ease of getting in and getting out of an investment) like treasury bills. 

Moderately aggressive investment profile means an individual is willing to accept some risks and invests on medium-term instruments that offer higher returns. In moderately conservative profile, an individual is usually offered funds that both invest on liquid investment that offers fixed return on a slightly longer term like bonds. When I first enter into investment, I was classified as moderately aggressive and was asked how much of my fund will be put on to low risk instruments and how much to put on medium risk instruments. Back in 2013, I didn't quite understand this concept yet and just opted for a 50/50 ratio. 

Aggressive investment profile on the other hand means you are willing to accept high risks for a possibility of much higher returns. In this profile, one seeks to maximize the growth of his funds on a long term horizon. Nowadays that I quite understand the risks that come with my investment, I purposely make sure that I get the aggressive profile so that I can invest on highly risky funds. These funds usually invest on equities and stock markets. This carries a lot of risks and there's a high probability of losing money. In order to counter the risks, I make sure to invest money that I won't be needing in the short term; money that I'm willing to let go for years, if need be. I also try my best to study market movement so that I would know somehow when to subscribe and unsubscribe to aggressive funds like what I'm doing with my BPI Invest Philippine Equity Index Fund. Of course, I can't exactly predict market movement so whenever the market goes against me, I do top-ups and accumulate shares. So far, with these strategies, I was able to ride the market fluctuations without losing money. I didn't earn that much but I definitely earn much higher return compared to just saving money on the bank, higher even compared to money market funds or time deposit.

BPI Invest Philippine Equity Index Fund

Please note though that each and everyone of us is unique, our risk profiles are different, our financial situations are unique to us. What works for me might not work for you and vice-versa so please know yourself and your situation and do your own research before investing, be it small or considerable amount of money.

Where to invest in UITF?

As mentioned above, UITF is usually offered by banks. Many of the commercial banks in the Philippines offer UITF using Peso or other currencies, usually US dollar. Some of these banks include BPI, BDO, Security Bank, Metrobank, etc. Although majority of those that offered UITF are banks, there are investment companies that also offer UITF. One of these companies is ATRAM.

banks/institutions offering UITF

Of these companies and banks offering UITF, BPI, BDO and ATRAM (thru GCash) are the ones I’ve tried. Of the companies I tried, BPI and ATRAM are the ones I can recommend. I like BPI and I’d say it’s the most appropriate UITF bank for me. BPI’s certain funds (like BPI Invest Philippine Equity Index Fund, a fund that tracks the PSEI, the Philippines stock exchange index) has no holding period which means you can unsubscribe anytime you want to (Other banks require 30 days holding period which means you will be charged a fee if you unsubscribe before the 30-day period ends). In this BPI fund, peso averaging is also allowed, which means, if the unit value of this fund goes down, I can buy at lower prices and accumulate shares.

I also like ATRAM because even though I don’t have a dollar account, I can still subscribe to global funds. Other banks like BPI only offer global funds if you have a dollar account. The minimum initial investment is also usually high in global funds, from USD500 to USD1000. The minimum top-up amount, in case you want to accumulate shares is also high, at least USD200. In ATRAM, the minimum initial investment is PhP1000 and top-up amount is PhP500 making it quite accessible to all Filipinos, especially those like me who only has minimal amount to spare for investment.

ATRAM Global Technology Feeder Fund

 

If with BPI, I normally subscribe and unsubscribe in fairly short period of time, sometimes a week or two, I can't quite do this with ATRAM. ATRAM has longer settlement period and unlike BPI Invest Equity Index Fund where I can easily monitor it by checking PSEI movement, ATRAM's global technology feeder fund is quite diverse that  it's quite hard monitoring the securities they invest in. So for my ATRAM Technology Feeder Fund, I just accumulate shares on a pretty regular basis, every payday as much as possible. Will this work for me in the long term? Shall I get higher return from this fund in the future? As of now, I don't know.  I'm giving this fund five (5) to ten (10) years to work. In this same period, let's also see the rate of return of my BPI Invest Equity Index Fund and compare these two (2) funds. Hopefully, both goes well. Wish me luck my dear readers, if there's any. ๐Ÿ˜‰

~ oo00oo~

Blessed Sunday everyone.๐Ÿ™ Stay safe and healthy!๐Ÿ˜Š


Random | 2022 Wishlist and Resolutions

Time flies really fast! It’s already two weeks past the start of 2022, before we know it and given this continuous rise of Covid cases, December will be here once again without notice, just like last year.

But before that, let’s start our 2022 right. I know it’s a cliche to always come up with our wishlist and resolutions every start of the year but, whatever, I’d like to do it once again. Normally, my wishes revolves around material things but this year, my wishlist is totally different. It’s more about saving money and investing while my resolutions are focused on good health habits. Here are my 4 wishes and 2 resolutions this 2022.

Double My UITF Fund

First on my list is to double my Unit Investment Trust Fund (UITF). I’ve started my investment journey last 2017 but I only bought my first UITF fund last 2019 using GCash's GInvest by Atram. It started as just a sort of game for me and my friends so we can join GCash promos that time but I took it seriously since then. Initially, I only subscribed to Atram's Money Market Fund but I withdrew the small amount I saved there and transferred to Atram's Global Technology Feeder Fund. This feeder fund is more risky but I'm looking for long term investment here so I just accumulate shares every payday, consistently.

Now, aside from my GInvest, I also have BPI UITF. I’m trying to do “trading” in my BPI UITF by subscribing and redeeming my shares in a short period of time but I only do it when I have gains. If I lost (paper loss) or the unit value of my shares is lower than when I bought it, I do cost averaging and buy additional shares when the price dips and then sell it only when I have gains. In BPI UITF, I only subscribe to BPI Invest Philippine Equity Index Fund because I can easily track it by monitoring the PSE Index. My goal is to double by BPI UITF fund and consistently add shares for my GInvest.

Note: The funds mentioned here are not a recommendation, they are highly risky. Please do your own research and subscribe only to funds you have researched thoroughly. And please only invest money that you won't be needing at least in the next 5 to 10 years so you can weather market fluctuations. If you just need to park your money for a short term, go for low risk funds like Money Market Fund. I'll create a separate  post about the different UITF funds available next time.

Double My Emergency Fund

For my emergency fund, I’m using GCash’s GSave as my savings account. My GSave account was initially created in 2020 also for GCash promo purposes but now am using it to build up my emergency fund. I make a deposit to it every payday, immediately after my salary was credited to my payroll account. 

For those building their emergency fund too, use GSave. It has higher interest rate compared with the traditional bank. It’s also risk-free since it’s covered by PDIC.

Pay-Off My Credit Card Debt

I know some of you may find my financial approach kinda wrong, that I should pay my credit card debts first before saving but this is what works for me.

I tend to spend and charge my spending on my credit cards only to realize at the end of the month that I overspent. I used to think it’s okay, I’ll pay my CCs first and then I’ll start saving, again only to find out in the end that I don’t have any savings also. To be able to do both, I started to allocate certain amount on my savings (emergency fund) and bought UITF shares every payroll religiously. These are the first things I do whenever I received my salary every 15th and 30th of the month. Whatever’s left, I will allocate for my CCs (I have 2; one I used for my essentials which I pay fully every month and the other one for big ticket or unplanned spending). Because of this approach, I was able to limit my unplanned spending. I still have unpaid balance because of my previous spending habit but I plan to pay all of it this year.

Create a Blog Post At Least Once A Month

I promised myself to spend time on things or activities that are worthwhile and limit my screen time from useless activities like playing games and scrolling through social media posts. But since I’m used to always checking my phone, I decided to just go back to blogging. At least in blogging, I’ll be able to practice writing again and still use my phone. 

But instead of me posting more travel stories (I don’t have any because of the pandemic btw) it will be more about savings and investments now. Of course, I will still write about travels and food adventures and I will still posts photos of anything and everything (because why not, I love taking pictures ๐Ÿ˜‰).

Phone Down/Ready for Sleep by 12MN

This I struggle a lot but I’m trying my very best to really put down my phone and be ready for sleep by 12MN. So far, I was able to control myself and put down my phone on or before 12MN. Hopefully, I can do this whole year round especially that soon, we’ll be going back to office for work. Staying healthy is also a must nowadays so I better sleep and rest right.

Get Back to My Daily Exercise Routine 

Back in 2020, exercising became part of my routine. I exercise at home for 30 minutes every other day and if quarantine rules allow, jog/walk in the park for an hour or two every weekend. 

But when I started my current work (lost my previous job and became part of jobless Filipinos last 2020 also), I forgot all about exercise and healthy habits. In 2020, I lost 15 pounds. I ate healthy, too.

Last year however, I gained back  the 15 pounds (and some more) I lost in 2020. I also was prescribed amlodipine for my hypertension last year and until now, I’m still taking it. I’m still hoping I could reverse this by eating right again, by sleeping right and by living right through healthy habits.

Join me in quest for a healthier and happier life this 2022. Let’s get back to shape; physically, mentally  and financially. Happy, healthy and prosperous 2022 everyone. ๐Ÿ˜Š

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