What does UITF mean? UITF stands for Unit Investment Trust Fund.
Bonds and time deposits are investments that require you to put in a significant amount of money. On the other hand, a UITF is a type of investment where you can start with P1,000.
But what exactly are UITFs? Let’s break down what this means:
What is an investment fund?
What if you could get a group of people who want to invest but don’t have enough money to meet the minimum? By pooling your money, you’d be able to invest together.
This is the idea behind funds. A fund manager gathers money from multiple investors and puts it in the investments of their choice.
Where the money goes depends on what the investors want. UITFs can be classified according to the assets the money is invested in.
| Types of UITF | What they invest in |
| Money market UITFs | Time deposits and treasury notes |
| Bond UITFs | Government and corporate bonds |
| Equity UITFs | Stocks |
| Balanced UITFs | Government bonds, corporate bonds, stocks |
Watch this short video explaining the different funds and the risk profile that suits them.
What is Unit Investment?
When a lot of people invest together, those who put in more money are entitled to more profits. Sounds fair, right?
The value of a fund depends on how much the investments inside are worth. Later on, the fund will attract more investors, which complicates calculations.
This is where units come in. To make everything simpler, everyone who put money in the fund gets units to represent how much of the fund they own.
However, the total value of the fund changes. As a result, the value of each unit changes too. This what you call the Net Asset Value Per Unit or NAVPU.
What is Trust?
Any investment is an act of trust. You worked hard for your money so you should only put it in the hands of institutions with a history of secure and responsible operations.
Banks must be trustworthy to offer UITFs. They need be approved by the Bangko Sentral ng Pilipinas (BSP).
Now that you know what they mean, you may ask: are UITFs a good investment?
In a nutshell, UITFs make investing more accessible. They have lower minimum requirements and they let you put your money in different kinds of investments.
With a range of types available, you are likely to find a good choice that suits your risk profile, budget, and goals.
What’s next:
