Some UITFs earn income (like dividends) and pass it on to investors. The question most clients have is simple: will I get this in cash, or will it be reinvested? Here's how it works for each fund house on DragonFi.
It's also worth noting that some funds offer both accumulating and distributing share classes side by side. Accumulating share classes never pay out cash because income is retained and reinvested, growing the NAVPU. Distributing share classes are the ones subject to the mechanics above: periodic payouts, subject to the minimum threshold. Clients should check which share class they're actually holding, since the two can behave very differently even within the same fund.
ATRAM & Manulife — You Receive Cash, No Minimum
ATRAM and Manulife run income-paying (distributing) UITFs. Normally these funds set a minimum payout amount, and if your income falls below it, it gets automatically reinvested into more units instead of paid out in cash. ATRAM's minimum is ₱1,000, while Manulife's is ₱100 (or $20 for dollar funds).
But because DragonFi is a third-party distributor, that minimum does not apply to you. Here's how it works: ATRAM and Manulife send us a list of clients eligible for the income distribution and remit the full amounts to DragonFi. We then credit the cash directly to your account, regardless of how small the amount is (though the minimum investment amount to buy into a fund is still ₱1,000). You receive your income in cash, in full.
BPI Wealth — Accumulating, Not Distributing
The BPI Philippine High Dividend Equity Fund is often assumed to work like an income fund because it specifically invests in high-dividend-yield stocks. However, it is an accumulating fund, not a distributing one like the Manulife and ATRAM funds. There is no periodic Unit Income payout, no distribution date, and therefore no minimum-payout threshold to speak of. Dividends the fund receives from its underlying equity holdings are retained and reinvested inside the fund itself, compounding into the NAVPU over time.
“The Fund intends to achieve total return through a combination of current income and long-term capital appreciation by investing in listed companies that have high dividend yields or have established a history of dividend payouts. The Fund aims to provide returns in excess of the return of the PSEi Total Return Index (PSEi TRI).”
“Achieve long-term wealth through capital growth and reinvested dividends.”
— Source: BPI Philippine High Dividend Equity Fund KIIDS