How much can you earn in investing in UITF?

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Unit investment trust fund or UITF is a one of the many ways any Pinoy can actually invest to earn passive income. It is offered by banks and trust companies with most of them offering online access, making them really easy to open and manage.

But how much can you expect to earn?

This a question that might be on your mind. And it makes sense to ask it. After all, you’re into investing because you’re expecting to gain from it.

In this article, I’m going to discuss the factors that affect your return on investment and a forecast of potential earnings.

UITF risk and return

The first thing that needs to be considered is the type of fund. Different funds have different goals, and this is translated to the securities that they acquire and hold to create value for investors.

And securities are not created the same. Some of them are risky, some are considered less so. Some may historically posted high returns, and others may be give modest returns.

See below the table of different fund types and their risk-return profile.

RiskReturn
Index fundsHighHigh
Equities fundsHighHigh
Balanced fundsModerateModerate
Bond fundsConservativeModest
Money market fundsConservativeModest

As you can see, both risk and return mirror each other. The higher the risk, the higher the potential return.

Unlike mutual funds, there are no sales load for UITFs so that’s a plus. But there are other charges and fees that you may need to consider.

Other factors that may also affect your potential gain from your investment are the following.

  • charges and fees
  • non-guaranteed returns

Effect of management fees on UITF earnings

For instance, most UITFs actually have management fee. It represents a portion of the entire value of the fund, and it is used to pay for the operation and management of the fund.

You don’t have to pay this out of pocket though, and it is computed into the net asset value per unit.

See below the list of UITFs with management fee. As you can see, it ranges from 0.15% to 2.5%.

Fund NameTypeManagement fee
AB CAPITAL BALANCED FUNDBalanced1.25% PA
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class)Balanced0.95%
ATRAM US Multi-Asset Income Feeder Fund (PHP Unit Class)Balanced0.95%
BDO PESO BALANCED FUNDBalanced1.00% p.a.
BPI Balanced FundBalanced1.50%  p.a.
Odyssey Diversified Capital FundBalanced1.50% p.a.
Odyssey Diversified Balanced FundBalanced1.50% p.a.
BPI Bayanihan Balanced FundBalanced0.30% p.a.
CHINA BANK BALANCED FUNDBalanced1.0% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
CTBC Bank – ATRAM Philippine Balanced Feeder FundBalanced1.00%
Peso Investment Trust FundBond1.25% per annum based on the Net Asset Value (NAV)
ATRAM Total Return Peso Bond FundBond1.10% p.a.
ATRAM Global Bond Income Feeder FundBond0.65% p.a.
DIVERSITY PESO BOND FUNDBond1% p.a. based on the Net Asset Value (NAV) accrued daily
BDO MERIT FUND MEDIUM TERM PORTFOLIOBond0.825% p.a.
BDO GS FUNDBond1.00% p.a. 
BDO MERIT FUND INTERMEDIATE TERM PORTFOLIOBond0.825% p.a.
BDO PESO BOND FUNDBond1.00% p.a.
BDO PERA BOND INDEX FUNDBond1.00% p.a. 
BPI Premium Bond FundBond1.50% p.a.
ABF Philippines Bond Index FundBond0.080% p.a. Trust Fee / 0.186% p.a. Management and Advisory Fee
Odyssey Peso Medium Term Bond FundBond1.00% p.a.
Odyssey Peso Bond FundBond1.00% p.a.
Odyssey Tax-Exempt Peso Fixed Income FundBond1.00% p.a.
BPI Fixed Income Portfolio Fund-of-FundsBondNone: trust fees are collected at the Target Fund level.
CHINA BANK FIXED INCOME FUND (formerly CBC GS FUND)Bond0.75% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
CHINA BANK INTERMEDIATE FIXED-INCOME FUNDBond0.50% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
EastWest Peso Long Term Bond FundBond1.0% p.a. of the market value of the fund
EastWest Peso Intermediate Term Bond FundBond1% p.a. of the market value of the fund
LANDBANK Bond FundBond1.00%
AB CAPITAL EQUITY FUNDEquity1.25% PA
Equity Investment Trust FundEquity1.25% per annum based on the Net Asset Value (NAV)
ATRAM Global Dividend Feeder FundEquity0.90% p.a.
ATRAM Asia Equity Opportunity Feeder FundEquity0.95% p.a.
ATRAM Global Technology Feeder FundEquity0.95%
ATRAM Global Financials Feeder FundEquity0.90% p.a.
DIVERSITY DIVIDEND FOCUSED FUNDEquity1.50% p.a. based on the Net Asset Value (NAV) accrued daily
BDO INSTITUTIONAL EQUITY FUNDEquity1.00% p.a.
BDO EQUITY FUNDEquity1.00% p.a.
BDO SUSTAINABLE DIVIDEND FUNDEquity1.25% p.a.
BDO FOCUSED EQUITY FUNDEquity1.50% p.a.
BDO ESG EQUITY FUNDEquity1.00% p.a.
BPI Equity Value FundEquity1.50% p.a.
Odyssey Philippine Equity FundEquity2.00% p.a.
Odyssey High Conviction Equity FundEquity2.50% p.a.
BPI Philippine High Dividend Equity FundEquity1.50% p.a.
BPI Philippine Infrastructure Equity Index FundEquity1.00% p.a.
BPI Philippine Consumer Equity Index FundEquity1.00% p.a.
BPI Catholic Values Global Equity Feeder FundEquity0.50% p.a.
CHINA BANK EQUITY FUNDEquity1.0% based on NAV before trust fee for the day
CHINA BANK HIGH DIVIDEND EQUITY FUNDEquity1.0% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
EastWest PhilEquity Feeder FundEquity1.00% per annum
EastWest PhilEquity Institutional Feeder FundEquityFee is charged at the portfolio level
ATRAM Philippine Equity Smart Index FundEquity1.50% p.a.
BDO EQUITY INDEX FUNDIndex1.00% p.a.
BDO PERA EQUITY INDEX FUNDIndex1.00% p.a. 
BPI Philippine Equity Index FundIndex1.00% p.a.
CTBC Bank – Sun Life Philippine Stock Index Feeder FundIndex1.00%
EastWest PSEI Tracker FundIndex0.75% p.a of the market value of the fund
AB CAPITAL SHORT-TERM FUNDMoney Market0.375% p.a.
Peso Money Market FundMoney Market0.30% per annum based on the Net Asset Value (NAV)
ATRAM Peso Money Market FundMoney Market0.50% p.a.
DIVERSITY MONEY MARKET FUNDMoney Market0.25% p.a.
BDO INSTITUTIONAL CASH RESERVE FUNDMoney MarketNone
BDO PESO MONEY MARKET FUNDMoney Market0.50% p.a.
BDO PERA SHORT TERM FUND Money Market0.50% p.a. 
BDO SHORT TERM FUNDMoney Market0.25% p.a.
BPI Short Term FundMoney Market0.50% p.a.
BPI Money Market FundMoney Market0.25% p.a.
CHINA BANK MONEY MARKET FUNDMoney Market0.25% per annum based on the Net Asset Value (NAV) of the Fund before trust fee for the day
CHINA BANK CASH FUND (formerly CBC INSTITUTIONAL MMF)Money Market0.15%p.a. based on the Net Asset Value (NAV) of the Fund before trust fee for the day
CHINA BANK SHORT-TERM FUNDMoney Market0.25% per annum based on the Net Asset Value (ANV) of the Fund before trust fee for the day
CTBC Money Market FundMoney Market0.25%
UNLAD KAWANI MONEY MARKET FUNDMoney Market0.05% p.a.
CLASS I – UNLAD PANIMULA MM FUNDMoney Market.15% p.a. 
CLASS II – UNLAD PANIMULA MM FUNDMoney Market.25% p.a. 
CLASS III – UNLAD PANIMULA MM FUNDMoney Market.30% p.a.
EastWest Peso Money Market FundMoney Market0.25% p.a. of the market value of the fund
East West Peso Short Term FundMoney Market0.25% p.a of the market value of the fund

But how does it actually affect your earnings? The higher the fee, the lower what you can expect to get from your investment.

In fact, we can make a comparison between different values of this fee. This way, you can get a better picture of how it impacts the growth of money over time.

The table below shows a projection of various funds with 0%, 0.15%, 1% and 2.50% fee with the following assumptions.

  • Time horizon is 30 years.
  • Initial 10,000 and monthly 1,000 investment.
  • The projection grows 10% compounded yearly rate.
YearDepositZero-fee0.15%1%2.50%
122,00023,67023,63523,43423,079
234,00038,76738,61138,06337,105
346,00055,44055,05953,99452,951
458,00073,85373,12571,34370,207
570,00094,18792,96990,23688,999
10130,000232,489225,591213,124211,230
15190,000459,697437,584401,336398,436
20250,000832,972776,448689,599685,156
25310,0001,446,2371,318,1111,131,0951,124,291
30370,0002,453,8192,183,9421,807,2811,796,860

So over 30 years, you’ve saved P370,000 and with 10% yearly growth rate, you would have earned P2,453,819 if the fund has no fees.

And as the fees go higher, the lesser returns that you can possibly get.

The effect of exit fee on UITF earnings

Another charge that you have to be careful is the exit fee. It is a fee that is assessed in your account if you fail to hold on to your investment longer than the holding period.

The holding period is the shortest period of time that you are expected to let your investment be held with the fund. If you withdraw your money by redeeming units before the holding period is up, then the exit fee would be applicable.

See the table below for a summary funds, their holding period, and exit fee.

Fund NameTypeHoldExit
AB CAPITAL BALANCED FUNDBalanced30 calendar1.00% of the Principal
ATRAM Global Multi-Asset Income Feeder Fund (PHP Unit Class)Balanced0 calendarnone
ATRAM US Multi-Asset Income Feeder Fund (PHP Unit Class)Balanced0 calendarnone
BDO PESO BALANCED FUNDBalanced30 calendar0.50% of the Original Participation Amount
BPI Balanced FundBalanced0 calendarNone
Odyssey Diversified Capital FundBalanced0 calendarNone
Odyssey Diversified Balanced FundBalanced0 calendarNone
BPI Bayanihan Balanced FundBalanced0 calendarNone
CHINA BANK BALANCED FUNDBalanced30 calendar1.0% of the amount redeemed
CTBC Bank – ATRAM Philippine Balanced Feeder FundBalanced30 calendar0.50%
Peso Investment Trust FundBond30 calendar0.50% of amount redeemed
ATRAM Total Return Peso Bond FundBond30 calendar1% of amount redeemed
ATRAM Global Bond Income Feeder FundBond0 calendarnone
DIVERSITY PESO BOND FUNDBond30 calendar5% of the redeemed amount
BDO MERIT FUND MEDIUM TERM PORTFOLIOBond0 calendarNone
BDO GS FUNDBond30 calendar0.50% of the Original Participation Amount
BDO MERIT FUND INTERMEDIATE TERM PORTFOLIOBond0 calendarNone
BDO PESO BOND FUNDBond30 calendar0.50% of the Original Participation Amount
BDO PERA BOND INDEX FUNDBond30 calendar1.00% of original participation amount
BPI Premium Bond FundBond0 calendarNone
ABF Philippines Bond Index FundBond0 calendarNone
Odyssey Peso Medium Term Bond FundBond0 calendarNone
Odyssey Peso Bond FundBond0 calendarNone
Odyssey Tax-Exempt Peso Fixed Income FundBond0 calendarNone
BPI Fixed Income Portfolio Fund-of-FundsBond0 calendarNone
CHINA BANK FIXED INCOME FUND (formerly CBC GS FUND)Bond30 calendar1.0% of the amount redeemed
CHINA BANK INTERMEDIATE FIXED-INCOME FUNDBond30 calendar1.0% of the amount redeemed
EastWest Peso Long Term Bond FundBond180 calendarPHP 500.00 or 0.25% of the withdrawn amount, whichever is higher
EastWest Peso Intermediate Term Bond FundBond30 calendarPHP 500.00 or 0.25% of the withdrawn amount, whichever is higher
LANDBANK Bond FundBond30 calendar25% of net earnings (P500 minimum)
AB CAPITAL EQUITY FUNDEquity30 calendar1.00% of the Principal
Equity Investment Trust FundEquity30 calendar0.50% of amount redeemed
ATRAM Global Dividend Feeder FundEquity0 calendarnone
ATRAM Asia Equity Opportunity Feeder FundEquity0 calendarnone
ATRAM Global Technology Feeder FundEquity0 calendarnone
ATRAM Global Financials Feeder FundEquity0 calendarnone
DIVERSITY DIVIDEND FOCUSED FUNDEquity30 calendar5% of the redeemed amount
BDO INSTITUTIONAL EQUITY FUNDEquity30 calendar0.50% of the Original Participation Amount
BDO EQUITY FUNDEquity30 calendar1.00% of the Original Participation Amount
BDO SUSTAINABLE DIVIDEND FUNDEquity30 calendar1.00% of the Original Participation Amount
BDO FOCUSED EQUITY FUNDEquity30 calendar1.00% of the Original Participation Amount
BDO ESG EQUITY FUNDEquity30 calendar1.00% of the Original Participation Amount 
BPI Equity Value FundEquity0 calendarNone
Odyssey Philippine Equity FundEquity0 calendarNone
Odyssey High Conviction Equity FundEquity0 calendarNone
BPI Philippine High Dividend Equity FundEquity0 calendarNone
BPI Philippine Infrastructure Equity Index FundEquity0 calendarNone
BPI Philippine Consumer Equity Index FundEquity0 calendarNone
BPI Catholic Values Global Equity Feeder FundEquity0 calendarNone
CHINA BANK EQUITY FUNDEquity30 calendar1.0% of redemption proceeds
CHINA BANK HIGH DIVIDEND EQUITY FUNDEquity30 calendar1.0% of the amount redeemed
EastWest PhilEquity Feeder FundEquity30 calendarPHP500 or 0.25% of the redemption proceeds whichever is higher
EastWest PhilEquity Institutional Feeder FundEquity0 calendar0
ATRAM Philippine Equity Smart Index FundEquity0 calendarnone
BDO EQUITY INDEX FUNDIndex30 calendar0.50% of the Original Participation Amount
BDO PERA EQUITY INDEX FUNDIndex30 calendar1.00% of the Original Participation Amount 
BPI Philippine Equity Index FundIndex0 calendarNone
CTBC Bank – Sun Life Philippine Stock Index Feeder FundIndex30 calendar1.00%
EastWest PSEI Tracker FundIndex30 calendarP500.00 or 0.25% of redemption proceeds, whichever is higher
AB CAPITAL SHORT-TERM FUNDMoney Market0 calendarNONE
Peso Money Market FundMoney Market30 calendar0.5% of amount redeemed
ATRAM Peso Money Market FundMoney Market0 bankingNone
DIVERSITY MONEY MARKET FUNDMoney Market30 calendar5% of the redeemed amount
BDO INSTITUTIONAL CASH RESERVE FUNDMoney Market0 calendarNone
BDO PESO MONEY MARKET FUNDMoney Market0 calendarNone
BDO PERA SHORT TERM FUND Money Market30 calendar0.50% of the Original Participation Amount 
BDO SHORT TERM FUNDMoney Market0 calendarNone
BPI Short Term FundMoney Market0 calendarNone
BPI Money Market FundMoney Market0 calendarNone
CHINA BANK MONEY MARKET FUNDMoney Market3 banking1.0% of the amount redeemed
CHINA BANK CASH FUND (formerly CBC INSTITUTIONAL MMF)Money Market3 banking1.0% of the amount redeemed
CHINA BANK SHORT-TERM FUNDMoney Market3 banking1.0% of the amount redeemed
CTBC Money Market FundMoney Market30 calendar0.50%
UNLAD KAWANI MONEY MARKET FUNDMoney Market0 calendarNone
CLASS I – UNLAD PANIMULA MM FUNDMoney Market0 calendarNone
CLASS II – UNLAD PANIMULA MM FUNDMoney Market0 calendarNone
CLASS III – UNLAD PANIMULA MM FUNDMoney Market0 calendarNone
EastWest Peso Money Market FundMoney Market0 calendarNone
East West Peso Short Term FundMoney Market0 calendarNot applicable

UITF earnings with non-guaranteed returns

Lastly, your earnings from any UITF are non-guaranteed. They vary and are not insured at all, and that means that you enjoy all the gains and absorb any loss.

And that’s why that I am not going to use any past data to make forecast into the future. No past performance is going to actually predict any future earnings that you’re going to get.

But if you are so inclined, you may visit UITF PH website, which is maintained by the Trust Officers Association of the Philippines.

Instead, what could be done is to make a forecast using varying rate of returns.

In the table below, the following assumptions are:

  • Management fee is not computed as it is assumed NAVPU would already reflect this value.
  • Initial 10,000 and monthly 1,000 investment.
  • Time horizon is 30 years.
YearDeposit4%8%12%
122,00022,66323,33324,009
234,00035,83337,73239,700
346,00049,52953,28457,273
458,00063,77470,08076,955
570,00078,58888,21998,999
10130,000162,036203,148255,846
15190,000263,563372,017532,264
20250,000387,086620,1411,019,406
25310,000537,371984,7161,877,918
30370,000720,2151,520,3973,390,909

Conclusion

1. Choose a fund that suits your risk-return profile. Just because a fund is rated with high potential for growth does not mean that it is a best fit for you.

2. Choose a fund that has the least management fee. It’s going to help you in the long run.

3. To avoid paying the exit fee, you can choose to withdraw at the end of the holding period or choose a fund that does not have any holding period at all.

4. Your UITF earnings are non-guaranteed. The only way that you can predictably estimate how much you’re going to get in the future is to actually see the forecast under different earnings scenario.

This way, you get to have a picture of how your money is going to grow over time.