iBank starts 2 UITFs

The International Exchange Bank (iBank) launched two unit investment trust funds (UITFs) as it slowly phases out its common trust funds (CTFs) based on Bangko Sentral ng Pilipinas (BSP) regulations.

The iFund long term current income portfolio gives investors an automatic dividend payout (linked to the 91-day Treasury rate) which is credited directly into their savings account, while the iFund long term current income portfolio gives investors monthly income at a payout rate to be set annually.

A minimal initial investment of P100,000 is required for both funds. There is a minimum holding period of one year for the iFund long term, and 90 days for the iFund current income.

The dividend per unit are set and declared at the start of the period. For the iFund long term dividends are paid out on the last business day of every month, while the iFund current on the last business day of every quarter.

"Investors can participate in any of these funds by purchasing at the prevailing price for the day called the net asset value (NAV) per unit. These are marked-to-market (M2M) funds which means that the NAV power unit depends on the market prices of the underlying investments and the actual rate of return will depend on the performance of the underlying investments of the fund. As the NAV per unit of the fund increases or decreases, so does the value of the investment," iBank trust center head Michael Garcia explained.

He added: "These funds do not guarantee a rate of return. You earn from your investment if the NAV of the fund goes up after you buy shares. You also earn as the fund pays out dividends. The capital gains, together with the cash dividends received, form part of the investor’s total return."