UnionBank Tax Exempt Portfolio
UnionBank Tax Exempt Portfolio is a peso-denominated unit investment trust fund designed to maximize the returns of participating qualified tax-exempt institutions consistent with the prudent investment management principles and the preservation of capital by investing in a variety of primarily Philippine peso denominated investment-grade debt securities.
|Launch Date:||October 1, 2007|
|Currency of Participation:||Philippine Peso|
|Minimum Investment:||PHP100, 000|
|Return Objective:||To maximize returns of qualified tax-exempt institutions consistent with the prudent investment management principles and the preservation of capital by investing in a variety of primarily Philippine peso denominated investment-grade debt securities|
|Risk Parameters:||1. Credit Risk – LOW
- Limited to Philippine government securities and investment-grade instruments2. Market Risk – LOW
- Modified Duration limit: 5 years
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 long-term investment horizon
- No 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.|
|Acceptance & Withdrawal Procedure:||The Trustee has the option, which may be exercised when circumstances so demand, to require at least one (1) day notice for redemption or withdrawal.|
|Trust Fee:||0.25 % 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.