Personal Finance Apprentice

Investing in Mutual Funds and UITFs

Investing in Mutual Funds and UITFs. Explaining what mutual funds and UITFs are, their benefits and advantages, and their different types.

Investing in Mutual Funds and UITFs

Investing in Mutual Funds and UITFs

For this article I would like to point out the benefits of investing in a mutual fund or a Unit Investment Trust Fund (UITF).

But first, I would like to explain what they are.

Mutual Funds and UITFs work pretty much the same way. People pool their money, a fund manager oversees the money and makes the investment, and the returns or profits are given back to
the people after a small fee is deducted as payment to the fund manager.
You can then choose to keep your money in the account and let it grow,
or you can withdraw all or part of it.

The main difference is that Mutual funds are basically companies and are regulated by the Securities and Exchange Commission.

UITFs are basically bank products and are regulated by the Bangko Sentral ng Pilipinas.

But the biggest difference is in the types of mutual funds and UITFs, and there are four basic types:

  • Money market funds – invested in time deposits and special deposit accounts. These are considered low risk investments.
  • Bond funds – invested in corporate or government bonds. Basically you are buying a company or government’s debt. The profit is the interest that the company or government pays on the loan. This is typically considered a medium risk investment.
  • Equity funds – invested in the stock market. This is a high risk investment.
  • Balanced Fund – invested in both bonds and the stock market. This is also typically considered as high-risk, but less so than equity funds.

*another type are Index Funds.

(For more information on Mutual funds and UITFs, we can refer to Fitz Villafuerte’s articles on these at

So why invest in mutual funds and UITFs?

  • They can offer superior returns than a time deposit. But for money market funds, the returns are practically the same.
  • You can be a passive investor. Simply add money to your account and a professional fund manager will do the work of investing it.
  • Increased diversification. Because money from different people are pooled together, the fund manager can buy a bigger array of stocks than any single member of the fund could. The diversification then makes the fund less vulnerable to market volatility.
  • It takes less money to invest. For as low as 5,000 you can be part of a fund which owns several stocks or bonds.  If you were to do it yourself, it would take possibly ten times that amount before you could buy a similar portfolio.

For the less experienced investor, mutual funds and UITFs can be a good way to grow your money while learning to manage your investment yourself.

(As for myself, I’ve been investing in UITFs and Mutual Funds for over a year now.)

But it’s important to first do your due diligence. Research thoroughly the company or bank you are planning to invest with. Make sure that they are a legitimate entity and they have a good track record of performance.

For those thinking of getting mutual fund themselves you can refer to this list of legitimate mutual fund companies in the Philippines:

And here’s a sample of how much returns are possible for mutual funds:
(Data taken from:

1 yr. Return (%) 3 yr. Return (%) 5 yr. Return (%) YTD Return (%)
Primarily invested in Peso securities
ATRKE Alpha Opportunity Fund, Inc.* *** n.a.  n.a.  n.a.  n.a. 
ATRKE Equity Opportunity Fund, Inc.* 27.35%  24.04%  9.88%  27.42% 
First Metro Save and Learn Equity
30.5%  31.86%  18.76%  26.96% 
Philam Strategic Growth Fund, Inc.* 31.73%  27.43%  13.89%  30.72% 
Philequity Fund, Inc.* 34.68%  30.08%  16.76%  33.73% 
Philequity PSE Index Fund Inc.* 32.06%  24.79%  13.33%  29.5% 
Philippine Stock Index Fund Corp.* 37.16%  24.57%  10.61%  34.21% 
Sun Life Prosperity Philippine Equity
Fund, Inc.
33.5%  24.47%  11.71%  31.97% 
United Fund, Inc.* 20.98%  11.72%  8.54%  19.03% 
Primarily invested in foreign currency securities
ATR KimEng AsiaPlus Recovery Fund, Inc.** 6.15%  n.a.  n.a.  9.24% 
Primarily invested in Peso securities
ALFM Growth Fund, Inc 19.08%  21.96%  n.a.  18.2% 
ATRKE Philippine Balanced Fund, Inc. 22.5%  19.24%  8.24%  22.54% 
Bahay Pari Solidaritas Fund, Inc. 26.51%  n.a.  n.a.  25.34% 
First Metro Save and Learn Balanced Fund
27.48%  29.04%  23.96%  24.41% 
GSIS Mutual Fund, Inc. 26.14%  22.97%  12.02%  25.14% 
NCM Mutual Fund of the Phils., Inc 24.03%  n.a.  n.a.  22.78% 
Optima Balanced Fund, Inc. 25.13%  18.71%  8.89%  23.86% 
Philam Fund, Inc. 26.9%  24.1%  12.37%  25.99% 
Sun Life of Canada Prosperity Balanced
Fund, Inc.
26.18%  19.29%  9.62%  24.62% 
Primarily invested in foreign currency securities
Cocolife Dollar Fund Builder, Inc. 11.77%  n.a.  n.a.  9.65% 
PAMI Asia Balanced Fund, Inc. 11.61%  n.a.  n.a.  11.98% 
Sun Life Prosperity Dollar Advantage
Fund, Inc.
8.57%  4.11%  2.41%  8.53% 
Primarily invested in Peso securities
ALFM Peso Bond Fund, Inc. 6.71%  7.27%  6.23%  5.81% 
Cocolife Fixed Income Fund, Inc. 7.63%  9.5%  9.1%  7.32% 
Ekklesia Mutual Fund Inc. 7.81%  7.85%  5.99%  6.82% 
First Metro Save and Learn Fixed Income
11.26%  11.4%  8.12%  9.59% 
Grepalife Bond Fund Corporation 11.32%  7.26%  n.a.  11.07% 
Philam Bond Fund, Inc. 11.72%  8.31%  6.5%  8.9% 
Philequity Peso Bond Fund, Inc. 8.12%  8.31%  6.82%  7.72% 
Prudentialife Fixed Income Fund Inc. 8.66%  5.14%  3.76%  7.67% 
Sun Life of Canada Prosperity Bond Fund,
7.04%  7.31%  5.94%  5.76% 
Sun Life Prosperity GS Fund, Inc. 7.16%  7.44%  6.33%  5.98% 
Primarily invested in foreign currency securities
ALFM Dollar Bond Fund, Inc. 9.87%  6.69%  5.46%  9.61% 
ALFM Euro Bond Fund, Inc. 9.48%  4.58%  4.03%  8.65% 
ATR KimEng Total Return Bond Fund Inc. 4.28%  n.a.  n.a.  4.49% 
Grepalife Dollar Bond Fund Corp. 17.25%  8.75%  7.78%  16.92% 
Grepalife Fixed Income Fund Corp. 5.72%  6.74%  5.55%  5.83% 
MAA Privilege Dollar Fixed Income Fund,
7.03%  2.41%  2.76%  8.12% 
MAA Privilege Euro Fixed Income Fund,
n.a.  n.a.  n.a.  4.08% 
PAMI Global Bond Fund, Inc 2.35%  1.44%  n.a.  2.28% 
Philam Dollar Bond Fund, Inc. 11.21%  7.95%  6.78%  11.13% 
Philequity Dollar Income Fund Inc. 11.3%  8.62%  7.5%  11.6% 
Sun Life Prosperity Dollar Abundance
Fund, Inc.
10.44%  7.84%  6.54%  10.44% 
Market Funds
Primarily invested in Peso securities
ALFM Money Market Fund, Inc. 3.25%  n.a.  n.a.  3.03% 
First Metro Save and Learn Money Market
2.18%  1.81%  n.a.  2.11% 
Philam Managed Income Fund, Inc. 2.43%  1.97%  1.75%  2.28% 
Sun Life Prosperity Money Market Fund,
0.36%  0.51%  1.02%  0.35% 

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