Stocks vs Mutual Funds vs VUL vs UITFS

[Sebastian Bach]

Hello

Need advice from the experts, which of these 4 will be the best place where I could allocate part of my funds that will be redeemed in exactly 5 years from now? In terms of cheap admin fees and easier to pull out. I will allocate a portion of my emergency funds + add monthly increments then pull them out after 5 years.

Currently I am invested in blue chip stocks and high dividend equity UITF from BPI where I am planning to let it sit there for 15-20 years and no plans of pulling them out anytime soon. I have no experience in selling my stocks or redeeming funds from these so I have no idea which are cheaper in terms of managements/admin fees. This will be a separate pool for just 5 years.

Thank you for those who could help.

[Walter]

Subscribing ...

[1D4LV]

personal experience ko ito, but with Sunlife, i had the best yields for 5 years. Pulling out is 48 hours.
Good thing here is that if you put in your investments with any life insurance company (e.g. Manulife, SUnlife, PruUK, Insular), may life insurance factor ka pa. However, as far as i know, si Sunlife lang ata ang may MF placements lang na pwedeng walang life insurance factor.

banks sa UITF also give good yields, yun nga lang, madaming chechebureche. daming documentations dahil sa AMLA. i did that once with BDO, gave the same yields as Sunlife, pero daming tanong and documentations. Pulled it out and nilagay ko yung laman sa Insular Life.

suggestion ko. shop around. talk to financial planners. mas maganda kung personal mo silang makakausap.

0.02.

[Sebastian Bach]

personal experience ko ito, but with Sunlife, i had the best yields for 5 years. Pulling out is 48 hours.
Good thing here is that if you put in your investments with any life insurance company (e.g. Manulife, SUnlife, PruUK, Insular), may life insurance factor ka pa. However, as far as i know, si Sunlife lang ata ang may MF placements lang na pwedeng walang life insurance factor.

banks sa UITF also give good yields, yun nga lang, madaming chechebureche. daming documentations dahil sa AMLA. i did that once with BDO, gave the same yields as Sunlife, pero daming tanong and documentations. Pulled it out and nilagay ko yung laman sa Insular Life.

suggestion ko. shop around. talk to financial planners. mas maganda kung personal mo silang makakausap.

0.02.

Alright, thanks sir. How's the management fees compared with the 2? Minimal difference lang ba?

[1D4LV]

Alright, thanks sir. How's the management fees compared with the 2? Minimal difference lang ba?

if you park your money there for 5 years, management fees are free.
minimal, if below 5 years. i think wala pang 1% per annum.

[badkuk]

The thing about mutual funds/UITFs, you have to sell them before you actually make money. e.g.

- you buy into a mutual fund/UITS today, NAV at 100 pesos
- you check it after 1 month, NAV rises to 150 pesos = *paper gain* of 50 pesos
- you redeem it after 2 months, NAV drops back to 100 pesos = you gain nothing, plus you have to pay the fees.


The good question here is when to sell. e.g. if you already have a paper gain of 10% on your equity fund, do you sell now? What if the PSEi goes up to 7800-7900 tomorrow?

imho, mutual funds/UITFs, except maybe money market funds do need to be managed...it' not like time deposit where you just wait for the interest to accumulate.

i used to have an investment in BDO's $ Money market fund. afaik it invests the money in deposit instruments, t-bills, etc. -- super safe, super liquid. Based on previous performance over the years the NAV steadily goes up, but you gain on average around 1.++%.

[jut703]

Hello

Need advice from the experts, which of these 4 will be the best place where I could allocate part of my funds that will be redeemed in exactly 5 years from now? In terms of cheap admin fees and easier to pull out. I will allocate a portion of my emergency funds + add monthly increments then pull them out after 5 years.

Currently I am invested in blue chip stocks and high dividend equity UITF from BPI where I am planning to let it sit there for 15-20 years and no plans of pulling them out anytime soon. I have no experience in selling my stocks or redeeming funds from these so I have no idea which are cheaper in terms of managements/admin fees. This will be a separate pool for just 5 years.

Thank you for those who could help.

Having invested in all of your options, I would say that the most liquid would be UITFs and stocks. UITFs are far easier to manage - just invest monthly and let compounding and the economy do its magic.

For stocks, you have the flexibility to buy and sell different stocks at different times. However, depending on how much money you'll put in regularly, you might not be able to diversify as broadly as with UITF. For example, you invest 10k a month, and want to buy PLDT shares. At 2k per share and a minimum of 5 shares, you consume your entire 10k budget on one stock. Then next month you buy some other stocks to balance out your portfolio, so in effect, you don't really get to maximize cost-averaging because you're buying different stocks at different times with potentially different market trends.

I could go on, but bottomline:
- Minimal effort, decent returns: index UITF
- Significantly more effort, marginally better returns (or worse, if you suck): stock market

UITFs also have lower management fees than VULs. 1.5% is standard, unlike with VULs where they're not as transparent with their management fees, and you're really not earning until the 10th year or so. Also, the returns of my VUL (invested in equity) aren't up to par with the index.

As Benjamin Graham says - index funds are the best tool for the average joe to reap the benefits of a growing economy without having to pour in too much effort.


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[Sebastian Bach]

Having invested in all of your options, I would say that the most liquid would be UITFs and stocks. UITFs are far easier to manage - just invest monthly and let compounding and the economy do its magic.

For stocks, you have the flexibility to buy and sell different stocks at different times. However, depending on how much money you'll put in regularly, you might not be able to diversify as broadly as with UITF. For example, you invest 10k a month, and want to buy PLDT shares. At 2k per share and a minimum of 5 shares, you consume your entire 10k budget on one stock. Then next month you buy some other stocks to balance out your portfolio, so in effect, you don't really get to maximize cost-averaging because you're buying different stocks at different times with potentially different market trends.

I could go on, but bottomline:
- Minimal effort, decent returns: index UITF
- Significantly more effort, marginally better returns (or worse, if you suck): stock market

UITFs also have lower management fees than VULs. 1.5% is standard, unlike with VULs where they're not as transparent with their management fees, and you're really not earning until the 10th year or so. Also, the returns of my VUL (invested in equity) aren't up to par with the index.

As Benjamin Graham says - index funds are the best tool for the average joe to reap the benefits of a growing economy without having to pour in too much effort.


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Thank you sir.

[NightRock]

I just buy Stocks.. and I manage dami ng online trading ngayon. Start ka lang ng 50K and buy few stocks in diff company

[jut703]

I just buy Stocks.. and I manage dami ng online trading ngayon. Start ka lang ng 50K and buy few stocks in diff company

I also manage my stocks online (COL), but UITFs are still much, much simpler.

Just open the app, transfer money to your UITF, then done. Repeat next month. Redeem money when needed. Takes less than a minute.

For stocks, I watch out for buy below prices and target prices. I also have to constantly compute the number of stocks of each company I buy to have a balanced portfolio, while taking into consideration my budget constraints vis a vis the minimum board lots of each company. It takes more time, maybe an hour a month, plus the effort I spend researching about what companies to buy.


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[badkuk]

Having invested in all of your options, I would say that the most liquid would be UITFs and stocks. UITFs are far easier to manage - just invest monthly and let compounding and the economy do its magic.

For stocks, you have the flexibility to buy and sell different stocks at different times. However, depending on how much money you'll put in regularly, you might not be able to diversify as broadly as with UITF. For example, you invest 10k a month, and want to buy PLDT shares. At 2k per share and a minimum of 5 shares, you consume your entire 10k budget on one stock. Then next month you buy some other stocks to balance out your portfolio, so in effect, you don't really get to maximize cost-averaging because you're buying different stocks at different times with potentially different market trends.

I could go on, but bottomline:
- Minimal effort, decent returns: index UITF
- Significantly more effort, marginally better returns (or worse, if you suck): stock market

UITFs also have lower management fees than VULs. 1.5% is standard, unlike with VULs where they're not as transparent with their management fees, and you're really not earning until the 10th year or so. Also, the returns of my VUL (invested in equity) aren't up to par with the index.

As Benjamin Graham says - index funds are the best tool for the average joe to reap the benefits of a growing economy without having to pour in too much effort.


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For index funds, you at least need to check whether the market is overbought/oversold, whether valuations are still reasonable, etc. Nalugi din yung bumili ng index fund back when it hit 7800, ngayon lang sila medyo nakakabawi.

[jut703]

For index funds, you at least need to check whether the market is overbought/oversold, whether valuations are still reasonable, etc. Nalugi din yung bumili ng index fund back when it hit 7800, ngayon lang sila medyo nakakabawi.

Cost averaging. You don't buy all at one point. I bought last year when it was at 7800 but of course I was also able to buy when it was below 7000 so all in all there are still gains.

And in 5 years, even if you buy high (relative to that year's lows), it's still highly likely that you'll end up positive. Unless of course there's an economic downturn (inevitably happens every decade or so), in which case just hold on for another year or two and you should be fine.

Timing the market can lead to potentially bigger returns (i.e. if you cashed in 100% last year before the slump then reinvested when it was at 6500) but in the long term you really cant predict and even if you just left your money untouched you'd still be positive by now anyway. Noone ever really successfully and consistently predicts where the market is going.


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[Walter]

Which bank allows you to add and get to / from your UITF online?

[jut703]

Which bank allows you to add and get to / from your UITF online?

BPI

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[Flipo]

Having invested in all of your options, I would say that the most liquid would be UITFs and stocks. UITFs are far easier to manage - just invest monthly and let compounding and the economy do its magic.

For stocks, you have the flexibility to buy and sell different stocks at different times. However, depending on how much money you'll put in regularly, you might not be able to diversify as broadly as with UITF. For example, you invest 10k a month, and want to buy PLDT shares. At 2k per share and a minimum of 5 shares, you consume your entire 10k budget on one stock. Then next month you buy some other stocks to balance out your portfolio, so in effect, you don't really get to maximize cost-averaging because you're buying different stocks at different times with potentially different market trends.

I could go on, but bottomline:
- Minimal effort, decent returns: index UITF
- Significantly more effort, marginally better returns (or worse, if you suck): stock market

UITFs also have lower management fees than VULs. 1.5% is standard, unlike with VULs where they're not as transparent with their management fees, and you're really not earning until the 10th year or so. Also, the returns of my VUL (invested in equity) aren't up to par with the index.

As Benjamin Graham says - index funds are the best tool for the average joe to reap the benefits of a growing economy without having to pour in too much effort.


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After reading the the post here and other investment thread, I finally took the plunge into investing sa BPI UITF and they recommended to me yung short term fund at Phil consumer equity fund.

Up to this date okay ba itong napili ko, at kung okay ba din yung UITF ng BDO?

[jut703]

After reading the the post here and other investment thread, I finally took the plunge into investing sa BPI UITF and they recommended to me yung short term fund at Phil consumer equity fund.

Up to this date okay ba itong napili ko, at kung okay ba din yung UITF ng BDO?

I personally prefer index funds because over the long term, very few (if any) actively managed funds can beat the index fund.

Doesn't matter if BPI or BDO, both have index fund UITFs. You can check the returns here:

The Best Bank UITF in the Philippines (Jan-March 217) – PinoyMoneyTalk.com

You'll see that index funds beat managed funds most of the time. BDO's managed fund is higher, but that's just for Jan-Mar 2017. You have to check if it can continually sustain that level of returns.


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[Flipo]

I personally prefer index funds because over the long term, very few (if any) actively managed funds can beat the index fund.

Doesn't matter if BPI or BDO, both have index fund UITFs. You can check the returns here:

The Best Bank UITF in the Philippines (Jan-March 217) – PinoyMoneyTalk.com

You'll see that index funds beat managed funds most of the time. BDO's managed fund is higher, but that's just for Jan-Mar 2017. You have to check if it can continually sustain that level of returns.


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Thank's bro, for sharing your experience, appreciate it. God bless.

[Walter]

Reviving this thread ...

If one were to consider investing in UITF Stock Index Fund ... Would it be better to just buy the stocks yourself? ... Is there some sort of a list of stocks that Index Funds use? ... or maybe someone here can advise which index stocks to purchase ... We could just follow that and then open an online stock trading account and buy the stocks ourselves ... This way, we save on the fees that the bank is charging ... This is for long term investment ...

Any thoughts? ...

[dcph172]

^ binabawasan ba yearly ng insurance premium ang investments say sa bpi-philam? Do they redeem the units aside from the management fee yearly whether theres profit or loss?


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[jut703]

That's what I don't like about my Philam insurance. I can't track it as easily as I can track my stocks/UITFs.

I got my VUL 3 years ago and I don't even know how much my VUL is worth now. Policy states that if the fund amount is less than the assured amount, in the event that I die, my dependents will get the assured amount. However, I don't know of any online portal for Philam that allows me to check how much my fund is actually worth now, net of the premium payments and the management fees.

This is one of the reasons why I want to keep my investments separate from my insurance. Though VULs work for some people, I learned the hard way that I'm better off buying term insurance and investing the difference.


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