A UITF is a pooled investment fund that lets you invest in things like bonds and stocks with a small amount of money, managed by professionals. Here's how it works and how it differs from a bank deposit.
UITF stands for Unit Investment Trust Fund. It's an investment that pools money from many people into one large fund, which a professional team then invests on everyone's behalf. When you invest, your money buys units of the fund, and your share grows or shrinks with the value of those units.
How does a UITF work?
The fund manager invests the pooled money according to the fund's strategy, for example in government bonds, Philippine stocks, or global companies. The fund's value is divided into units, and the price of one unit is called the NAVPU (Net Asset Value Per Unit). As the investments rise or fall in value, so does the NAVPU, and therefore the value of your units.
How is a UITF different from a bank deposit?
A UITF is an investment, not a deposit. Its value can rise and fall, returns are not guaranteed, and it is not insured by the Philippine Deposit Insurance Corporation (PDIC). In exchange for taking on that risk, a UITF offers the potential for higher returns over time than a regular savings account. UITFs are managed by trust entities regulated by the Bangko Sentral ng Pilipinas (BSP).
Why invest in a UITF?
- Professional management. Experts handle the investing decisions for you.
- Diversification. Your money is spread across many investments, not just one.
- Low minimums. You can start with a small amount, so you don't need a large sum to begin.
- Flexibility. You can usually add or redeem any time, with no fixed lock-in.
How do I start?
On DragonFi, you can invest in a UITF for as low as ₱1,000 for most funds, right in the app. For the full steps, see the "How to invest in a fund" article by DragonFi.
Good to know
A UITF is best suited to money you can leave invested for a while. How long depends on the type of fund: money market funds suit short horizons, while equity funds are meant for the long term. Because it's an investment, the value can move up and down along the way.