How to Invest in UITFs in the Philippines

Last Updated – Mar 5, 2025 @ 8:13 am

UITFs are one of the most ideal choices for beginners when it comes to getting started with investing.

Read on to learn more about how you can take advantage of this financial instrument to grow your wealth.

What are UITFs?

UITF stands for Unit Investment Trust Fund. In principle, it works a lot like Mutual Funds. But instead of a Mutual Fund company, your money is managed by a bank.

In Mutual Funds, you own shares, making you a “shareholder”. The price of each MF share is referred to as Net Asset Value Per Share (NAVPS).

In UITF, you’re an “investor” for owning units. The price of each UITF unit is referred to as Net Asset Value Per Unit (NAVPU). For example, if the NAVPU of a specific UITF is Php 2.00 and you have Php 20,000 to invest, you’ll own 10,000 units.

The bank will provide you with a certificate as proof that you own an X-number of units.

Types of UITFs

UITFs can be categorized the same way as Mutual Funds (Equity, Balanced, Bonds, Money Market). In similar fashion, allocation of assets is based on the investors risk-appetite.

Best Unit Investment Trust Fund (UITF) in the Philippines for 2024

Here are the top 10 UITFs in the Philippines – as of February 2024.

Best UITF Equity Funds for 2024

A UITF Equity fund invests primarily in shares of publicly listed companies. It is tagged with a risk classification of Aggressive.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing equity funds from February 2023 – February 2024 (YOY). We will be updating this table on a quarterly basis.

Best UITF Balanced Funds for 2024

A UITF Balanced Fund invests primarily in equities and fixed income securities. It is tagged with a risk classification of Moderate Aggressive/Conservative.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing balanced funds from February 2023 – February 2024 (YOY). We will be updating this table on a quarterly basis.

Best UITF Bond Funds for 2024

A UITF Bond Fund invests primarily in large corporation and government-issued fixed-income securities. It is tagged with a risk classification of Moderate Conservative.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing bond funds from February 2023 – February 2024 (1-year ROI). We will be updating this table on a quarterly basis.

Best UITF Money Market Funds for 2024

A UITF Money Market Fund invests primarily on short-term securities with maturity of less than 1 year. It is tagged with a risk classification of Conservative.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing money market funds from February 2023 – February 2024 (YOY). We will be updating this table on a quarterly basis.

Best UITF Feeder Funds for 2024

A UITF Feeder Fund invests at least 90% of its assets in a single collective investment scheme.

Note: The data shown in the table below are based on the performance reports from UITF.com.ph – listing the 5 highest performing money market funds from February 2023 – February 2024 (YOY). We will be updating this table on a quarterly basis.

How to Start Investing in UITF

Compared to stocks, which require you to make your own selection on the company shares-level, investing in UITF only requires that you pick a fund based on your risk appetite.

The fund manager will take care of making decisions on where to put your money based on the fund’s strategy.

This makes pooled investments (like mutual funds & UITF) look more ideal to “passive investors” who don’t necessarily need or want to make the investment decisions themselves.

It takes a lot of the guesswork out of the equation so that all you need to do upon setting up an account is to monitor it and put in more funds.

Want to get started? Learn how to invest and grow your money.

List of UITF Member Banks

How to Open a UITF Account in the Philippines?

Since UITFs are offered by banks, simply drop by the nearest branch of your choice.

Bank personnel specializing in their UITF products will assist you and have you complete a Client Suitability Assessment form. Most banks allow you to do the assessment and download the required forms from their website. You’ll still need to physically submit them though.

After choosing your fund, completing all requirements, and receiving your certificate of participation, you may begin funding your account. Initial deposits start at Php 5,000.

UITF Investing Tips

Like all investments, UITFs carry risks, and it’s important to invest money that you don’t need immediately. Being well-informed and strategic can help you maximize the potential benefits of your UITF investments.

Below are some tips that can help guide you in your investing journey:

1. Understand What UITFs Are

UITFs are pooled funds managed by experts from a bank or a trust company. Your money is combined with that of other investors to invest in a variety of assets like stocks, bonds, and other securities.

2. Know Your Risk Tolerance

Assess your risk appetite. UITFs come in various forms, ranging from conservative (like bond funds) to aggressive (like equity funds). Choose a fund that matches your risk tolerance and investment horizon.

3. Set Clear Investment Goals

Define your financial goals. Are you saving for retirement, a major purchase, or building an emergency fund? Your goals will determine the type of UITF that’s best for you.

4. Research Before Investing

Look into the performance history of the UITF, the credibility of the managing institution, and the fund’s investment strategy.

Remember, past performance is not an indicator of future results, but it can give you an idea of how the fund is managed.

5. Diversify Your Portfolio

Don’t put all your money in one UITF. Consider investing in different types of funds to diversify your portfolio and spread risk.

6. Understand the Fees

Be aware of the fees associated with UITFs, such as management fees, early redemption fees, and others. High fees can eat into your returns over time.

7. Regularly Monitor Your Investments

Keep an eye on your UITF investments and the market. This will help you understand how different factors affect your investment.

8. Consider the Time Horizon

Invest with a long-term perspective. UITFs can fluctuate in the short term but typically stabilize with good returns over the long term.

9. Consult with Financial Advisors

If you’re unsure, seek advice from a financial advisor. They can provide personalized advice based on your financial situation and goals.

10. Keep Emotions in Check

Avoid making impulsive decisions based on short-term market fluctuations. Stick to your investment plan and goals.

11. Stay Informed

Keep yourself educated about economic and market trends, as these can impact the performance of your UITFs.

UITF Investing FAQs

Still got questions about UITFs? We’ll answer them below.

What are the pros and cons of investing in UITFs?

Investing in Unit Investment Trust Funds (UITFs) offers several advantages and some drawbacks. Understanding these can help you make an informed decision about whether UITFs are suitable for your investment portfolio.

Pros of Investing in UITFs:

1. Professional Management

UITFs are managed by professional fund managers who make investment decisions based on extensive research and market analysis, beneficial for investors who lack the time or expertise to manage their own investments.

2. Diversification

UITFs invest in a variety of assets, which helps spread risk. This diversification can protect against significant losses that might occur if all money were invested in a single asset or asset type.

3. Accessibility

Most UITFs have relatively low minimum investment requirements, making them accessible to a wide range of investors, including those with limited capital.

4. Liquidity

UITFs typically offer higher liquidity compared to other investment types, like real estate. Investors can usually redeem their investment relatively quickly if needed.

5. Transparency

UITFs provide regular updates on fund performance and holdings, allowing investors to track their investment’s progress and understand where their money is invested.

6. Potential for Higher Returns

Compared to traditional savings accounts or time deposits, UITFs can offer higher potential returns, though this comes with higher risk.

Cons of Investing in UITFs:

1. Market Risk

Like any market-linked investment, UITFs are subject to market volatility. The value of your investment can fluctuate depending on market conditions.

2. No Guaranteed Returns

Unlike fixed-income investments, UITFs do not offer guaranteed returns. The performance of the fund is subject to how well the underlying assets perform.

3. Management Fees and Charges

UITFs come with management fees and other charges that can impact overall returns. It’s important to understand these fees before investing.

4. Potential for Losses

While diversification reduces risk, it does not eliminate it. There’s always a potential for loss, especially in the short term or in aggressive funds.

5. Requires Trust and Reliance on Fund Managers

Investors must rely on the expertise and decisions of the fund managers, which may not always align with their own investment strategies or expectations.

6. Influence of Economic and Political Factors

UITFs can be affected by economic and political developments, both locally and globally, which can impact investment performance.

When considering UITFs, it’s important to align your investment choices with your financial goals, risk tolerance, and investment horizon.

As with any investment, there’s no one-size-fits-all answer, and it’s often beneficial to consult with a financial advisor to determine the best strategy for your individual circumstances.

How are mutual funds and UITFs taxed?

Just like other forms of investments, UITFs are subject to a 20% withholding tax on capital gains.

How often can I buy and sell UITF units?

Some UITFs are subject to a minimum holding period so if you want to redeem it early, you need to pay a fee.

That said, it’s advised to sell your investments only when you reach your investment goals or if you want to switch your investment strategy.

What fees are associated with UITF investing?

Investing in Unit Investment Trust Funds (UITFs) involves various fees and charges that can impact your overall returns. Here are the common fees associated with UITFs:

It’s important to carefully read the UITF’s prospectus or key information and investment disclosure statement (KIIDS) to understand the specific fees associated with the fund.

These documents provide detailed information on all applicable fees and charges. The overall impact of these fees on your investment returns can be significant, especially over the long term, so it’s crucial to consider them when choosing a UITF.