How to Invest in UITF or Unit Investment Trust Fund

You may be looking to do smart things with the money you are starting to accumulate, but do not know where to start.

Investing your money is always a good idea, but even the word itself can intimidate ordinary folks who have never heard of topic outside of discussions that mention seemingly big words like “stocks, “dividends,” and “futures.”

That is where unit investment trust funds (UITFs) come in to make things easier for ordinary people. If you have heard of mutual funds before and/or are familiar with them, then you may like what a UITF is.

It is one of the simplest and most basic investment products available, and it can be what gets you started in investing your money for your long-term future.

What is a Unit Investment Trust Fund?

A Unit Investment Trust Fund is an open-ended trust fund operated and managed by a trustee made available through participation. An “open-ended trust fund” means clients are allowed to invest or redeem investments at any time, as long as it is in line with the guidelines stated in the UITF Declaration of Trust.

In an open-ended trust fund, funds from clients with similar investment goals are put together in one fund that the trustee then invests in various securities in order to maximize return within acceptable risk levels.

Just about anyone or anything with a legal capacity to contract or establish trust can invest in a UITF, making this open for novices who would like to dip their toes into long-term investment.

UITFs are governed by a Declaration of Trust (also known as Plan Rules) that details the investment objectives of the UITF in question, as well as the mechanics behind the investment and the fund’s overall management.

UITFs are usually considered as medium to long-term investments. Clients are advised to be financially capable enough to stay invested for a considerable amount of time in order to maximize potential earnings.

It is not advisable to consider the UITF as an emergency fund, even if it is an open-ended trust fund. If you are desperate for money, then investing in a UITF may not be best for you.

Who Can Invest in a UITF?

If you have even just P10,000 and have an income source, then you should be able to invest in a mutual fund or UITF.

There are plenty of UITFs out there that are open to small-time investors who only have a bit to contribute, letting ordinary people be able to get the benefit of having a professional fund manager deal with their money in the hopes of making it grow.

Perhaps you’d think P10,000 won’t get you far, but it can if you put it into a high-yielding instrument and let it compound for an extended period of time. The results may be surprising for you and make you think that not getting into it sooner was a mistake.


Things to Remember with UITFs

1. UITF Account Opening

Opening a UITF account is much like opening a bank account. The only difference is where the money is going to and how it will be handled. UITFs are sold by banks, wherein you buy units of participation in the fund.

The value of the fund is known as Net Asset Value Per Unit (NAVPU), which rises and falls depending on the market prices that comprise that UITF.

2. Set your financial goal

Define your financial objective and how much risk you are willing to tolerate to have a guide that helps you define your investment strategy. Everyone is different, so what may work for others may not necessarily work for you. With that, you can then better choose which UITF you would like to invest your money in, especially for the long term.

3. Invest Long-term

Go for the long term. A long-term investment horizon lets you maximize your gains. Also, if you have extra funds, or disposable income, the smart thing to do is to top up your UITF account as it will help you reach your investment objectives quicker.

Long-term investment should not just be a one-time thing, but a lifestyle that helps you be smarter with your money.

4. Investment Fees

Pay close attention to management and transaction fees, which vary across different funds and financial institutions. There may be redemption fees as well, so keep a close eye on fees when you engage in transactions.

5. Make your own research about your UITF investment

Whenever you have free time, study the different investment instruments involved in the fund and get a better understanding of the different asset classes involved in the portfolio. It is your money, so you should know where it is being invested in.

Do homework on the fund manager and look for his/her track record. Past performance is not a definite indicator of how well your fund will perform, but at least it gives a good idea of what kind of fund manager that person is.

6. Be aware of the risks of investing in UITF and other investment vehicles

Finally, take note that UITFs and pooled investments, in general, are often not covered by the Philippine Deposit Insurance Corporation. Since low-risk instruments still have risk nonetheless, you should be absolutely sure of what you are getting yourself into.


While investing in a UITF is a great idea, especially for beginners who only have a little bit to give, do keep in mind that there is no such thing as a perfect investment instrument. All of them have the risk, however small and seemingly insignificant it may be. Anything can happen in the market, so make sure to not put all of your eggs in one basket.

With that said, it is always a learning experience in such a vast world, so treat it as an education as well as a step towards securing your future.

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