UnionBank Philippine Peso Fixed Income Portfolio
Philippine Peso Bond Portfolio is a peso denominated unit investment trust fund designed to provide investors higher returns than traditional fixed-income savings products. Preservation of capital is the primary objective of the fund. Philippine Peso Bond Portfolio is ideal for investors with a medium to long-term investment horizon who seek competitive fixed-income returns and relatively low earnings volatility.
|Launch Date:||January 12, 2004|
|Currency of Participation:||Philippine Peso|
|Return Objective:||The Fund is a peso-denominated fund designed to provide investors higher returns than traditional fixed-income savings products.|
|Risk Parameters:||1. Credit Risk - LOW
- Limited to government securities and investment-grade corporate bonds2. Market Risk - LOW
- Modified Duration limit: 5
Modified Duration - is the percentage price change of a fixed income instrument for a given change in the level of interest rates. Duration of 1 means that the price of a fixed income instrument is expected to change by 1% for every 100 basis point (1%) shift in the level of interest rates. The higher the duration of an instrument, the higher its risk (all other factors kept equal).
Interest rates have an inverse relationship with fixed income prices so that an increase in interest rates generally leads to a decrease in fixed income prices and vise versa.
Value-at-Risk (VaR) – is an estimate of the magnitude of loss that a portfolio can experience within a given period of time under certain probability assumptions, or confidence level. For example, a portfolio VaR of 5% within 1 day under a 99% confidence level means that there is 99% certainty that the maximum possible loss a portfolio can experience in 1 day is 5% of its value. Said in the reverse, portfolio losses greater than 5% of its value in 1 day are possible, but the probability of such occurrence is less than 1%.
VaR is often used as a risk measurement tool in portfolio management. The VaR of a portfolio varies depending on the kinds of assets put into the portfolio and their correlation to each other. Portfolios with lowly-correlated assets (i.e. diversified portfolio) tend to have a lower VaR than portfolios with highly-correlated assets. Examples of assets with a traditionally low correlation to each other are stocks and bonds – i.e. when stock prices increase, bond prices normally decrease and vise versa.
Confidence Level – is a statistical range with a specified probability that a given parameter lies within the range. It is a range constructed from sample data (i.e. past observations). A 99% confidence level gives 99% certainty that values would fall within the specified range.
|Liquidity:||To ensure adequate liquidity to meet daily fund withdrawals, at least 5% of investments will be in highly liquid instruments|
|Initial NAV per Unit:||PHP 100.00|
|Time Horizon:||Designed for investors with a medium to long-term investment horizon
- 90-day minimum holding period
|Regulatory:||Subject to Bangko Sentral ng Pilipinas regulations governing the creation, administration and investments of Unit Investment Trust Funds as outlined in BSP Circular 447 Series of 2004 and Section UX410 of the Manual of Regulations for Banks.|
|Tax:||Subject to regular withholding tax of 20% on interest income|
|Acceptance & Withdrawal Procedure:||Investments into the fund may be accepted on any banking day, at the prevailing NAV per unit. All investments and withdrawals should be processed before 12 noon. Withdrawals will be funded one (1) banking day after the date of transaction.|
|Trust Fee:||1% p.a. based on the total market value of the fund.|
|Account Opening Procedures|
|Accounts may be opened at any UnionBank branch|
|Only cleared funds from an UnionBank savings account are acceptable for investment|
|Investments and withdrawals may be made at any UnionBank branch|
All Unit Investment Trust Funds (UITFs) are regulated by the Bangko Sentral ng Pilipinas. UITF investments are not insured with the PDIC and do not carry a guaranteed rate of return. Past performance is not necessarily a guide to future performance. Gains and losses are solely for the account of the investor. A copy of the BSP-approved UITF Plan is available for inspection by any UITF investor.