Mutual Funds and UITFs both belong to the same breed – they are both managed funds, the difference between the two are the regulators and the fund managers. Mutual Funds are managed by Fund Management Companies while UITFs are managed by Banks and other Financial Institutions.
Also, Mutual Funds are regulated by the Securities and Exchange Commission while UITFs are regulated by the Bangko Sentral ng Pilipinas.
With that said, UITFs and Mutual Funds tend to behave similarly.
2015’s Best Unit Investment Trust Fund (UITF) in All Category
Based on UITF.com.ph, the Top Performing UITF in the Philippines during 2015 is also a Fixed Income Fund. It is AB Capital Premium Fund making 8.16% for its investors in 2015. (Since UITFs are not as transparent as Mutual Funds, not much information can be gathered with this fund.)
10 Top Performing UITFs in all Category for the Year 2015
|Rank||Fund Type||Bank||Fund Name||ROI|
|1||Bond Fund||AB Capital||AB CAPITAL PREMIUM FUND||8.16%|
|2||Equity Fund||Rizal Commercial Banking Corporation||RIZAL GLOBAL EQUITY FEEDER FUND||5.81%|
|3||Equity Fund||Bank of the Philippine Islands||BPI Global Equity Fund-of-Funds||5.46%|
|4||Bond Fund||China Banking Corporation||CBC DOLLAR FUND||4.86%|
|5||Bond Fund||Asia United Bank||Gold Dollar Fund||4.44%|
|6||Bond Fund||Union Bank||UnionBank Long Term Fixed Income Portfolio||4.07%|
|7||Bond Fund||Union Bank||UnionBank Dollar Bond Portfolio||3.37%|
|8||Equity Fund||Bank of the Philippine Islands||BPI US Equity Index Feeder Fund||3.36%|
|9||Bond Fund||Union Bank||UnionBank Tax Exempt Portfolio||3.06%|
|10||Bond Fund||Bank of the Philippine Islands||Philippine Dollar Bond Index Fund||2.91%|
Bond Funds indeed gave the most for its investors during 2015. While you may see Equity Funds in this table, note that these are funds invested in the Global Market and not in the Philippine Stock Exchange.
Conclusion and Recommendations
While the local stock market is in a downtrend, it is always a good opportunity to take advantage of this situation. Look at what happened during the final half of 2008 in the chart below.
From a downturn during 2008, roughly around the level of 1,800 points, the PSEi has reached 8,000 points last year before it drops. Now it’s going down, the best strategy will always to take confidence that you are investing for the long term and not just for today. And in the long term, stocks will tend to go higher.
My recommendation contains two aspects. One, start investing today, no matter what the market situation is. Investing is a lifestyle not a one time thing.
Second, diversify. Not only on different fund management companies, but diversify to different asset classes as well. Consider putting some of your funds to fixed-income instruments.