20. Swabeng Strategy: What UITF works best for me?

We know that not all UITFs are created equal. Some are made according to your risk appetite and some are made for how long will you hold the fund.

Regardless of which will you be choosing based on the criteria, what matters is that you understand the risk and reward for each before putting in your hard-earned money to have it work for you.

I will cite some of the most common types of UITF according to your Risk Appetite and Time Horizon.


1. Money Market Fund. 

This is a type of UITF that is invested on a short-term basis of usually one year or less. Your funds will be invested in a fixed-income securities . Usually, the return for this type of investment is relatively higher than time deposits and savings account.

This type is recommended if you prefer to preserve your capital and you. don't want to take much risk (for conservative investors) but at the same time you have your money grow within the shortest time possible. Opening a Money Market Fund account can be as low as a thousand pesos depending on the bank you'll be visiting. You could go here to this link for the list banks that offer Money Market Fund (please take note that the data on the link may vary from time to time).


2. Bond Fund

This is a type of UITF that is invested on a short to medium term. This time, your funds will be placed in Bond that you can withdraw after a period of as short as 30 days to as long as a year.

This type is recommended to people who wants to preserve their capital and at the same time doesn't mind the risk (say very low to low risk). You can open a Bond Fund account for as low as five thousand pesos depending on the bank you'll be going to.


3. Balanced Fund

Now this is where the excitement starts. This type is usually invested on a medium term to maximize the growth of your fund. They are usually invested in a combination of fixed-income securities like treasury bills and high yield savings account, bonds and even equities (Stock Market).

This type is recommended to those who won't be using their money for the next 3-5 years so that you would be able to utilize the power of compounding (I'll try to make a post regarding Compounding in the coming weeks).


4. Equity Fund

This would be the type of UITF that is heavily invested (almost 100%) in equities or stocks. Since the fund will be invested heavily on equities, risks for this type of fund are higher than the previous funds (hence this type is considered high-risk). With high-risks, as long as you've planned well, the rewards will be high also. This type of fund is suitable for aggressive, long-term investors who can sit and wait.

If you won't be using your money for the next 5-10 years, this would be the best type of fund for you especially if your goal for this fund is for your retirement or your kid's college education.


Regardless of what type of fund you choose, bottomline is, you have a chance to let your money work for you. You may check this website and you would be able to see the list of Banks that offer a specific type of fund that suits your personality.


Till the next post.