Mutual Funds VS UITF

[simoncpu]

Mga pipol, please note nga dako kaayo ang opportunity cost sa mutual funds or UITFs. OK ra siya kung 5 years imo investing time, pero kung pang retirement nga 30 yrs, it's better to invest on your own. Here's an illustration (walay yearly addition para simple ang calculation).

Investment: 100,000
Number of years held: 5
Average yearly return: 10%
Annual management fee: 2%
Value without management fee: 161,051.00
Value with management fee: 145,577.35

Klaro kaayo, lugi ta, pero mada2x ra kay 9.6% ra ang reduction sa value. Tolerable, especially if you're a newbie who bought CAL or COSCO (or DIZ, ORE, NI hehe). But watch would happen after 30 yrs:

Investment: 100,000
Number of years held: 30
Average yearly return: 10%
Annual management fee: 2%
Value without management fee: 1,744,940.23
Value with management fee: 951,837.53

WTF, dude! Your potential returns would be reduced by 45.45%!!!

Conclusion: Nindot ang UITF/MF kay walay stress sa imo life, pero ayaw lang palabi. You need to invest on your own.


p.s.: I'm investing in Unionbank's Large Capitalization Philippine Equity Portfolio, pero dili nako paabton ug 30 yrs.

[durfritz]

Mga unsa d.i ni cya maam ug serr?

[cebu.opportunities]

I don't care with the management fees ky net nmn i-present sa UITF.
ang ako lang is ny idle times and sayangan ko with the fund's potential growth unya na stagnant lang. that's why nag ginahi og ulo and naki ride ra sa market instead of investing long term.

in a span of 2 months, let's say 7.5% net dayon na secure nga profit then the rest of the months, invested it sa sideline business. in that way, na maximize ang fund for "moderately" "conservative (Balanced) or maybe aggressive (Equity)" nga investments.

pero not all the time you'll have the luxury of time to maximize its potential gain so ok rapud go long term.
not everyone is able to earn that much if they will do trading or put up a traditional business of their own. tanan naa risk.
what's important ky ni gain gihapon siya in a more conservative way pero your capital is still there intact.

sa traditional business, possible ka ny daghan bad debt unya malugi pa gyud. TY hasta capital.

[silverware]

ask lang... if nag open ka equity fund for 10k... puede na xa nmo ma pun-an anytime?

[silverware]

as in zero jud? wa pami kasuway. if ma bankrupt siguro ang bank unya manirado. ky di man pdic insured ang UITFs.

1. greater portion sa fund ky gi invest sa stocks if equity fund but naa man certain portion nga gi-invest sa lesser risk investment vehicles so di siguro mahurot.
2. inig sud nimo, ang amount invest ky i-divide to that day's navpu and ang result ky number of participating units nimo. that alone is positive. in order for the navpu to be negative, moagi pa og negative level ang psei. around 6600 level siya karon and pila na ka years nilabay before nisaka in.ana nga level... murag dako2 nga disaster ayha pa siguro ma negative.

sorry kaayo ky nalibog na hinuon mo.
MFs and UITFs are designed for long term. Fluctuating ang market (up and down) but iyang long term trend is going upward. if nag peso-cost averaging mo (every now and then mag-"deposit" like every month ba ron), you'll eventually reap higher returns than that of the savings or time deposit accounts.

you might want to learn more about Mutual funds (similar to UITF), naay lecture ang wealth club on August 10, 2013 at 1pm to 5pm. naai existing thread for that diri ra gihapon sa Economics section.

knsa contact person?... ganahan ko mo apil sa lecture... mao ni ako no. 09226815442 ty

[makie29]

Mga pipol, please note nga dako kaayo ang opportunity cost sa mutual funds or UITFs. OK ra siya kung 5 years imo investing time, pero kung pang retirement nga 30 yrs, it's better to invest on your own. Here's an illustration (walay yearly addition para simple ang calculation).

Investment: 100,000
Number of years held: 5
Average yearly return: 10%
Annual management fee: 2%
Value without management fee: 161,051.00
Value with management fee: 145,577.35

Klaro kaayo, lugi ta, pero mada2x ra kay 9.6% ra ang reduction sa value. Tolerable, especially if you're a newbie who bought CAL or COSCO (or DIZ, ORE, NI hehe). But watch would happen after 30 yrs:

Investment: 100,000
Number of years held: 30
Average yearly return: 10%
Annual management fee: 2%
Value without management fee: 1,744,940.23
Value with management fee: 951,837.53

WTF, dude! Your potential returns would be reduced by 45.45%!!!

Conclusion: Nindot ang UITF/MF kay walay stress sa imo life, pero ayaw lang palabi. You need to invest on your own.


p.s.: I'm investing in Unionbank's Large Capitalization Philippine Equity Portfolio, pero dili nako paabton ug 30 yrs.

How can you say it's "lugi" when in the end you're earning more than what you put in? Just because MFs and UITFs have higher costs doesn't mean that you're losing. And besides, that's the cost that you're paying for the services of professional fund managers and experts. Their services aren't cheap.

And besides sa imong computation, after 30 years you paid 45.45% in costs but earned +851.38%. And that is on top of doing nothing and just let the fund manager do it all for you. Not really bad at all.

[cebu.opportunities]

knsa contact person?... ganahan ko mo apil sa lecture... mao ni ako no. 09226815442 ty

si sir makie29. the one who posted right after you.

[simoncpu]

How can you say it's "lugi" when in the end you're earning more than what you put in? Just because MFs and UITFs have higher costs doesn't mean that you're losing. And besides, that's the cost that you're paying for the services of professional fund managers and experts. Their services aren't cheap.

And besides sa imong computation, after 30 years you paid 45.45% in costs but earned +851.38%. And that is on top of doing nothing and just let the fund manager do it all for you. Not really bad at all.

"Lugi", because there are really no "experts" in the stock market. In the long run, no one can beat the index. An actively-managed fund can never beat the index in the long run. They sometimes beat the index in the short term due to insider info, but they can't do this forever. A reduction of 45.45% is very big. Sample computation ra ang 100K. If you invest 1M, 45.45% is the difference between 17,449,402.27 and 9,518,375.32. Lugi ka almost 8M-- it's a very big amount. Mas lugi pa jud ka if you top-up your investment every year/month.

[nowayL]

Lugi sa ginansya Bro ..... hehe

[rosygemini]

@ceb.opportunities I think naka mention sya ana ... iyang sample is if bugat ra ang 10k pwede magstart ka initial like 2k or 5k then 1k every month not sure pero I think nglihok na ang imo money ana..

Hopefully before end of the year makaopen nq pero kuyawan pq gamay...hehe