As stated in yesterday’s post, I was invited along with two
lovely bloggers, Des and Krissy to Arteng Pinay, a financial workshop for
artists and musicians a few Sundays ago. Yesterday I shared what Des has shared
during that time and now I am going to share Krissy’s lecture that afternoon.
Krissy’s talk is all about Pooled Funds. She discussed in
detail regarding mutual funds and UITF or Unit Investment Trust Fund. These two
although the same in terms of collected funds from different investors, they
are still very different.
For one, mutual funds are guarded by SEC and managed by
mutual fund companies. The price of the fund is based on NAVPS or Net Asset
Value Per Share. These are sold by licensed mutual fund agents. There are also
charges in line with this kind of investment. 1% to 5% for sales charge, 0.5%
to 3% for redemption fee and 1% to 2.5% for investment advisory, distributor
and administration fees.
UITF or Unit Investment Trust Fund is guarded by the BSP. When
you opt for this kind of investment, you are buying units. These are managed and
sold by commercial banks and the price of the fund is referred to as NAVPU or
Net Asset Value per Unit. The charges are as follows, 0% to 2% sales charge, 1%
to 2% redemption fee and 1% to 1.5% trust fees.
There are many advantages of opting in for pooled funds. For
one, the investment is very small. You can actually start investing even at
5,000. Plus, since the funds are pooled in from different investors, the money
managers tend to diversify it among different investments. This is also managed
by top managers of the bank. You can top it up every month at 1,000 and you can
also monitor it online.
Yet just like any other investments, there are still
advantages that go with it. For one, we cannot eliminate the risks involved.
Second, would be the costs not to mention the charges that are stipulated by
the banks. Plus there is that uncertainty in terms of returns and lastly you
have no control over management decisions since again the decision making is in
the hands of the one in charge with the money.
If you are interested to start with pooled funds, it is now
made very easy to open such. Simply read the bank’s prospectus and go there to
invest. They have tellers who would be glad to enlighten you about their
investment services and even more they will walk you through with the entire
thing.
Thank you to everyone who attended Arteng Pinay. I am
forever grateful for the opportunity. To Sir Burn, Kassy, Carmi, fellow
speakers, Des and Krissy, to Sir Marvin for being there, to the participants
and everyone, you realized a dream of mine.
P.S. To those doing the 52 Week Money Challenge and 52 Week Money Challenge Version 2, it is Week 11 already! Did you deposit the next amount yet?
P.P.S Want to know more about investing, savings, stock market and more, check out my reference here. You can download free ebooks and resources too.