My BPI Philippine Equity Index Fund

The BPI Philippine Equity Index Fund is a type of UITF (Unit Investment Trust Fund) offered by BPI, whose goal is to mirror the performance of the PSEi. A UITF is like a mutual fund, or pooled fund, where money collected from different people is invested in bonds, stocks, etc. If you want to know the difference between a UITF and mutual fund, you can read it here. The PSEi (Philippine Stock Exchange Index) is a mix of 30 stocks with the highest volume and market capitalization, which represents the general movement of the stock market. So basically, this product is a pooled fund invested in the biggest companies in the Philippines.

Before you invest in anything, you should identify your goal, time horizon, and risk appetite. In my case, I invested in this UITF specifically for my child’s college fund. So the targeted date is when my kid goes to college, which is around 15-16 years from now. How much I invest monthly will depend on the estimated cost of the top colleges here in the Philippines by 2033. Ouch.

I started investing in the BPI Philippine Equity Index Fund around the time my son was born, back in 2015. Here are the basic details regarding the fund taken from their website.

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The minimum amount to open the investment is P10,000, and you can add to it for a minimum of P1,000. There is no holding period, meaning you can liquidate the fund anytime at no extra fee. The trust fee is 1% per annum, which is the same as the BDO Equity Index Fund. (I was able to open the investment account by answering a Risk Profile Questionnaire in the BPI branch where I have a savings account. You can always ask your local branch for more details and instructions).

If you look at the latest disclosure of the fund in their website, you will find the top ten companies the fund is currently invested in. SM Investments Corp., SM Prime Holdings, Inc., Ayala Land, Inc., are the top 3 as of 6/29/2018. As an index fund, almost 100% of it is invested in equities, since it simply mirrors the PSEi.

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3 years of investing monthly into this UITF, and my current paper gain is a mere 2%. I have seen it go as high as 21%, to a low of around a -10% paper loss. I am not particularly worried about how it performs this year or even next year, because the goal of this fund is for the college tuition of my child – in 15 years.

Lastly, here are 3 quick reasons why I invested in this fund:

  1. Convenience – I opened the investment where I already did my banking. You don’t have to open a new account in another bank if your bank already offers similar products. The monthly additional investments I make are all online, with just a few clicks.
  2. Cost – There are managed funds that charge higher than 1% per annum, so research accordingly because fees might matter once compounded.
  3. Potential Returns – The average gain of Stocks/Equities is 10% annually over a long period of time.

Remember, personal finance is personal. There are many other ways to save and invest for a college fund. This is just one option. I wrote this to share my personal experience to hopefully encourage you to plan for the future. As for my next update on this investment, you may have to wait for 15 years. 🙂

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