UCPB posts double-digit growth in unit investment trust fund

MANILA, Philippines - The United Coconut Planters Bank (UCPB) has reported that two of its equity-based unit investment trust funds (UITFs) posted double-digit growth in net asset value per unit (NAVPU) in 2010 “as share prices rose sharply on the back of strong local and foreign buying interest in the Philippine stock market during the year.”

UITFs are a pool of investment funds, individual or institutional, that are managed by the trust department of banks. A trust department is licensed by the Bangko Sentral ng Pilipinas (BSP).

UCPB first vice president and trust officer Alexandra Deveras said in a report that the UCPB Equity Fund (UEF) and the UCPB Balanced Fund (UBF) outperformed the Philippine Stock Exchange Index (PSEi), which surged by 38 percent to close the year at 4,201.

The UBF’s NAVPU, which is almost equally invested in local shares of stock and in peso-denominated bonds, increased by 43.09 percent end 2010.

The UEF, which is more heavily skewed on shares of stock, reported an even higher 78 percent rise in its NAVPU. 

“UITFs pool the funds of several people and invest these in certain assets, and the NAVPU reflects the current worth of the investment,” Deveres explained.

Despite the current market correction, the bank trust officer said equity funds face bright growth prospects again this year as the Philippine bourse is expected to continue performing well on account of the favorable macroeconomic conditions and strong corporate fundamentals.

UCPB actually manages five UITFs including the peso fixed income or bond fund, money market and the dollar fixed income.

UITFs are similar to mutual funds in that they are basically invested in the same investment instruments. They are ideal for retail investors as initial investment placements can start as low as P5,000 to P10,000, depending on the trust department or the fund manager (in the case of mutual funds).