UBP Trust and Investment Services Group: UITF Product Concept

UBP Trust and Investment Services Group
UITF Product Concept

UITF Concept
UnionBank of the Philippines – Trust and Investment Services

Group
MONEY MARKET AND CAPITAL MARKET
• Governments use Money Market and Capital

Market instruments to fund government projects
and government deficits
• Corporations use Money Market and Capital Market

instruments to raise capital for business ventures
UnionBank of the Philippines – Trust and Investment Services Group

The Stock Market
o It is where you can invest in

other people’s publicly
listed companies
o A company sells shares of

stock through an Initial
Public Offering (IPO) to
raise capital to grow their
business
UnionBank of the Philippines – Trust and

Investment Services Group
Companies Wishing to Raise Capital For
Expansion/Growth
Bank
Bank Loans
Loans
Issue
Issue Bonds
Bonds
Sell
Sell Stocks
Stocks
Issued 1,000,000 shares at PHP 1.00 and floated
only 49% of its shares
The investing public can buy Majority shares must be

only 490,000 shares in the stock maintained by the founders
market or original businessmen
Sunday, May 2, 2021 UnionBank of the Philippines 6

Issued 1,000,000 shares at PHP 1.00
Investor
Investor “A”
“A” bought
bought Investor
Investor “B”
“B” bought
bought Investor
Investor “C”
“C” bought
bought
100,000
100,000 shares.
shares. 200,000
200,000 shares.
shares. 50,000
50,000 shares.
shares.
He
He therefore
therefore owns
owns 10%
10% of
of He
He therefore
therefore owns
owns 20%
20% of
of He
He therefore
therefore owns
owns 5%
5%
the
the Company
Company the
the Company
Company of
of the
the Company
Company

How Do I Make Money?
o Capital Appreciation – Increase in the market

price of the stock
o Dividends – Distribution of a portion of a

company’s earnings (usually in cash)

Earning Dividends
Dividends Dividend Dates
Money given back to Ex-date: the cut off
the investor as his point for dividend
share of distributed entitlement
profits.
Date Payable: the day
when the dividend is
Ex. Cash div of given to shareholder
20¢/share: if I had (usually a month after
1000 shares, I would the Ex-date)
get P200

- Stock Prices Fluctuate – therefore you may
lose your principal
- Companies are NOT under any obligation to

pay dividends

Issue
Issue Bonds
Bonds
ISSUER
= BORROWER / DEBTOR
(Republic of the Philippines; Bureau of Treasury; Corporations)
INVESTOR PURCHASING THE BONDS

= LENDER / CREDITOR
(Banks, Institutions, Individuals, etc.)
Sunday, May 2, 2021 UnionBank Template 12

4 Year Annual Pay 5% Coupon Bond
FV = P 100,000.00
P 5,000 P 5,000 P 5,000
P 100,000 + 5,000

KEY DIFFERENCES
Bond Stock
A bond is a debt security, in which the
issuer owes the holders a debt and is Ownership interest in a corporation in the
obliged to repay the principal and form of common stock or preferred stock.
interest
Bond holders are lenders to the issuer The stock holders are part owners (have an
equity stake)
Not fixed. Investors however may earn
Fixed coupon payments at regular interval through dividends and/or capital
appreciation
Issued by Governments and Corporations Issued by Corporations
Debt has little or no impact on control of the Equity requires shared control of the
company. company.
Equity holders are aggressive. They can

Bond holders are relatively conservative.
accept downside risks because they fully
They cannot share any upside or profits
share the upside as well.

WHAT IS UITF?
Open-ended pooled trust funds denominated in pesos or any acceptable currency, which are operated and administered by a
trust entity and made available by participation
INDIVIDUAL/CORPORATE VARIOUS INVESTMENT

INVESTORS OUTLETS
Trust
Center
Pooled Fund

Group
OPEN-ENDED POOLED TRUST FUND
An open-ended trust fund allows clients to invest or redeem

their investments at any time subject to guidelines set forth
in the UITF Declaration of Trust.
An investor will be able to purchase units in the fund itself

directly rather than from the other existing unit-holders.
Open-end funds also buy back shares when investors wish
to sell.
It contrast with a close-ended fund, units are usually being

traded between investors thereafter.

…MADE AVAILABLE BY PARTICIPATION
A client participates in the fund by purchasing units for a
specific UITF at the prevailing unit price for the day.
The unit price or price per one (1) unit of a UITF is called
the Net Asset Value per unit (NAVPU) of a UITF.
The NAV per unit is the price at which investors

purchase or redeem units from the fund.
Four (4) Types of UITFs
 (A) Money Market UITF - This fund is for investors who are looking for a
conservative way to invest their funds. The investment objective here is capital
preservation while giving the client easy access to their funds.
 (B) Fixed Income/Bond Fund - This type of fund is invested in a mix

government securities, corporate bonds and other fixed income instruments. Bond
prices are subject to market volatility depending on the interest rate trends.
 (C) Balanced Fund –This type of fund is invested in a mix of equities and fixed
income securities. It is aimed at generating moderate level of capital appreciation
 (D) Equity Fund - The purpose of this type of fund is to maximize returns by
going into equities or stock investments and dividend earnings. Clients investing in
this type of fund should, however, be willing to take the risks attached to investing
in equities. A longer investment horizon is recommended in investing in an equity
fund.
ADVANTAGES
UIT funds provide an attractive investment choice because they
generally offer the following features
• Professional Management — Professional money managers research, select, and monitor the performance
of the securities the fund purchases.
• Diversification — Diversification is an investing strategy that can be neatly summed up as “Don’t put all your
eggs in one basket.” Spreading your investments across a wide range of companies and industry sectors can
help lower your risk if a company or sector fails. Some investors find it easier to achieve diversification through
ownership of UITF rather than through ownership of individual stocks or bonds.
• Liquidity — UITF investors can readily redeem their shares at the current NAVPU
DISADVANTAGES
• Lack of Control — UITF investors cannot ascertain the exact make-up of a fund’s portfolio at
any given time, nor can they directly influence which securities the fund manager buys and sells
or the timing of those trades.
• Price Uncertainty — With an individual stock, you can obtain real-time (or close to real-time)
pricing information with relative ease. By contrast, with UIT funds, the price at which you
purchase or redeem units will typically depend on the fund’s NAVPU, which is typically computed
after the market closes.
Mark to Market (“MTM”)
• The UITF follows a valuation methodology called mark-to-market
(MTM) valuation.
• The MTM procedure revalues all the investments of the fund daily based
on the price of the underlying securities (Stocks and bonds) in the fund.
• Valuation is NOT on an accrual basis.
• If security has no fair market value, then it shall be assumed to be of no

value.
RETURNS
If the market value of a fund’s portfolio increases, after deduction of
expenses and liabilities, then the value of the fund and its units
increases.
The client’s actual rate of return will depend (1) on the performance of
the underlying investments of the fund and (2) the skills of the people
managing the investment securities of the fund.
NAV and NAVPU
Net Asset Value (NAV) is essentially the value of the fund after deducting all
allowable fees and expenses.
The NAV per unit or simply NAVPU (the NAV divided by number of outstanding
units) or unit price of the UITF changes daily depending on the movements in the
prices of the underlying investment that the fund is invested in. As the NAVPU of
the fund increases or decreases, so does the value of the units you bought.
NAV and NAVPU
Net Asset Value (NAV) is essentially the value of the fund after deducting all
allowable fees and expenses.
The NAV per unit or simply NAVPU (the NAV divided by number of outstanding
units) or unit price of the UITF changes daily depending on the movements in the
prices of the underlying investment that the fund is invested in. As the NAVPU of
the fund increases or decreases, so does the value of the units you bought.
NAV Computation
Market Value of Investments and

Cash, if any
- Accrued management fees, taxes

administrative and other expenses,
provisions for losses, if any
NET ASSET VALUE

NAVPU Computation
NAV per unit

Net Asset Value
(NAV pu) =
Total Outstanding Units
Price at which investors can purchase or redeem

units in the fund

NAV and NAVPU Computation
Price at which investors can purchase or

redeem units in the fund

NOT INSURED BY PDIC
UIT Funds are NOT insured by PDIC and is NOT a deposit product.
By BSP regulation, trust assets are kept separate and distinct from the
Bank’s. Therefore, in the unlikely event that UnionBank should close,
all trust assets, including UITF assets, cannot be touched by its
creditors.
Clients will still be able to withdraw the whole market value of his entire
investment whereas PDIC can only guarantee up to PHP 500,000.00.
Mechanics of UITF Investment
PESO BOND FUND
Investors purchase and redeem units
at the unit price for the day
The unit price for the day is known as

the Net Asset Value per unit or NAVpu
The NAVpu changes daily depending

on the market value of the underlying
portfolio of investments
Additional investments and withdrawals

are valued at the NAV for that
particular day

Valuing Your Investments
Day 1
Investment P 100,000.00
Nav is used in
computing for
the equivalent NAV per unit P 100.00
number of
units in case of
contribution
P 100,000.00
----------------
No of Units Bought P 100.00
= 1,000 units
Will serve as the basis of

investment valuation

Day 91
Nav is used in NAV per unit P 120.00

computing for the
market value of
your fund
Current Value of
1,000 units x P 120
Your Initial
= P 120,000.00
Investment
P 120,000
- 1
Holding Period
P 100,000
Return
= 20%

Day 91 (additional contribution)
NAV per unit P 120.00
Additional Investment P 100,000.00
Additional Units
833.33 units
Bought
Total Units 1,000 + 833.33

Outstanding = 1,833.33 units

UBP posts NAVPU daily on its website
http://www.unionbankph.com/index.php
?
option=com_content&view=article&i
d=1034&Itemid=69

TAKE NOTE!!!
 Investment products: may lose principal
 Past performance is not indicative of future returns
 UIT Funds are not insured by PDIC
 Higher potential returns are associated with higher

risks
 NAVPU fluctuates daily and are computed at the end

of each business day. Therefore the NAVPU rates
provided are of a certain date only and may deviate
on the actual redemption/buying of units
Types of Investments and Their Returns
High Risk
aggressive
R
I moderately aggressive
S
K moderately conservative
conservative
Zero
Risk
Zero Return RETURN High Return

Risks
Risks
Risks
Client Suitability
Purpose of Client Suitability
Assessment
•Assist clients in understanding their return

objectives and risk appetite
•Assist Relationship Managers in choosing

suitable investments outlets for their clients
•BSP Requirement
Investor Scoring
 27 points and up - aggressive investor
• Client is willing to take risk of large negative returns, higher volatility and
possible loss of investment. His objective is to grow his investments at
significant capital appreciation
 21 to 26 points – moderately aggressive investor

• Client is willing to take moderate risk. His objective is to grow his investment
from a combination of interest income and capital appreciation.
 17 to 20 points – moderately conservative investor

• Client is willing to take minimal risk and earn higher returns than deposit
products. His objective is to preserve the real value of his investments and to
generate interest income
 1 to 16 points – conservative investor

• Client is adverse to losses and prefers low but positive returns. His objective is
to avoid principal losses and to generate interest income
CSA Scoring
Score Type of Investor Recommended Product(s)
1-16 Conservative o Deposit Accounts/TDs
17-20 Moderately o UB Short-term Fixed Income
Conservative o UB Philippine Fixed Income
o Dollar Bond Fund
o Tax-Exempt Fund
21-26 Moderately o Balanced Fund

Aggressive
27 and Aggressive o Large Capitalization Equity Fund
up o Capital Accumulation Global Fund of Funds
o Philippine Equity Index Tracker
Note: The scores are the same for individual/corporate investors.

Waiver of Client Suitability
Assessment Result
• Clients who want to invest in UITFs or any other

Trust products with higher risks than what is
appropriate based on the result of the CSA should
accomplish a separate Waiver form.
• The investment should not be done unless the

document is secured form the client.
Thank you!
Cut-Off Time and Settlements*
Product Types Cut-off time for Settlement Periods for
placements and Redemptions
redemptions
Money Market
and Fixed 2:30pm T+1
Income UITFs
Balanced Fund
and Equity 2:30 pm T+4
Funds
- All transactions within cut-off time will utilize the NAVPUs for the day. The
NAVPUs however will be made only available in the website the following
morning on or before 10:00am.
- All transactions beyond cut-off time are considered next banking day
transactions.
Exercises
1. Client transacted on May 7, 2012, Monday, to
participate in the Peso Fixed Income Fund within
cut-off time. What NAVPU will be applicable in his
investment?
- 215.67239
2. Relative to number 1, when will she know her
NAVPU figures?
The following
3. Client morning
transacted of Tuesday
on May 9, 2012, Wednesday, to
participate in the Peso Fixed Income Fund after
cut-off time. What NAVPU will be applicable in his
investment?
4. Relative to number 3, when will she know her

NAVPU figures?
- 215.337169
Morning of Friday
Exercises
1. Client transacted on 11/19/2018, Monday, to
participate in the Peso Equity Index Fund within
cut-off time. What NAVPU will be applicable in
his investment?
- 106.006525
2. Another client redeemed her Peso Equity Index
within cut-off time on 11/19/2018. When will she
get her proceeds and what NAVPU?
3. Another client redeemed her Peso Equity Index

- T+4 or Friday; 106.006525
after cut-off time on 11/19/2018. When will she
get her proceeds and what NAVPU?
Monday Nov 26; 106.467220

Computing for Returns
• Year-on-Year Returns
• YTD Returns
• Annualized Returns (CAGR)

Year on Year (YoY)
A B C D
NAVPU NAVPU (B-A) % Yield

5/8/2012 5/8/2013 A YOY
100 104 4/100 4%
75 100 25/75 33.33%
86 130 44/86 51.16%
131 120 -11/131 -8.39%

Year to Date (YTD)
A B C D
NAVPU NAVPU (B-A) % Yield

12/31/2012 5/8/2013 A YOY
200 215 15/200 7.5%
90 100 10/90 11.11%
100 130 30/100 30%
131 120 -11/131 -8.39%

Exercise
A B C
NAVPU NAVPU NAVPU YTD YOY

5/8/2012 12/31/2012 5/8/2013
100 110 120 9.09% 20%
210 216 239 10.65% 13.81%
600 660 800 21.21% 33.33%
300 270 250 (7.40%) (16.66%)

Exercise
A B C D 2 Year 2 Year
YTD YOY Cumulative annualized
% return % return
from 3/24/15 from 3/24/15
NAVPU NAVPU NAVPU NAVPU
3/24/13 3/24/14 12/31/14 3/24/15
102 105 121 126 4.13% 20% 23.52% 11.14%
208 211 215 235 9.03% 11.37% 12.98% 6.29%
598 630 645 705 9.30% 11.90% 17.89% 8.58%
305 325 300 280 -6.67% -13.84% -8.20% -4.19%

Exercises
A B C D YTD YOY 2 Year 2 Year

Cumulat annualiz
NAVPU NAVPU NAVPU NAVPU ive % ed %
3/24/13 3/24/14 12/31/14 3/24/15 return return
102 105 121 126
208 211 215 235
598 630 645 705
305 325 300 280

Key Information and Investment Disclosure Statement
(KIIDS)
 It is a summary of the fund’s performance and holdings at a certain period.
It includes the ff:
1. Description/mandate/objective of the fund
2. Suitability and key risks
3. Fees (Trust fees, custodianship fees, audit fees, early redemption)
4. Holding period
5. Dealing Day and redemption settlement
6. Top portfolio holdings
7. Return over several periods vis-à-vis the benchmark
8. NAVPU graph (plus 12 months highest/lowest)
9. Statistics (Duration, volatility, Sharpe ratio and information ratio)
10.Outlook and strategy
FPR’s per UITF are available every month at http://unionbankph.com/personal/trust/invest-with-us
Marketing Spiels
 The UITF is a retail trust product that can provide a client

access to alternative wealth management products
 The historical return (Year-to-date/Year-on-year) returns of

the fund is…..
 I regret that I cannot provide you an indicative yield or a

projected return
 UITF is valued on a marked-to-market basis which subjects

the value of your investments to price fluctuations.
Marketing NO-NO
× It is a Trust product, BUT it is really just like any bank product
× The projected return of the fund is……
× Our fund performance in the past many years is so great, I

can guaranty that we will do great again.
× The fund is invested in government securities, therefore you

will not lose money. Trust me! It’s a fixed income
× Investment products are covered by PDIC

Others Trust Products and Services
WHAT IS TRUST?
o A fiduciary relationship in which one party,

known as the trustor, gives to a person or
organization, known as the trustee, the right to
hold and invest assets or property on behalf of a
third party, known as the beneficiary.

WHAT IS TRUST?
Individuals Trust department Individuals

and Assets and
of a bank of FI
Institutions Institutions
trustor property trustee beneficiary

TRUST VS. BANK PROPER
TRUST BANK
Relationship Trustor-trustee Debtor-creditor

Principal-agent
Documentation Trust agreement Passbook, CDs, TDs
Investment management/
agency agreement
Source of Income Trust Fees Speads; interest income;
fee based
Duties GFOF/Maximize earnings Pay client agreed
within the risk parameters interest rate
set
Returns Variable Fixed
Losses/protection Not PDIC insured and PDIC insured – 500K

losses are for the account
of the client
TAKE NOTE!!!
 Past performance is not indicative of

future returns
 UIT Funds are not insured by PDIC
 Higher potential returns are associated

with higher risks
 Investment products: may lose principal

Other Fiduciary Accounts
o Trust/agency arrangements other than

those classified as trust/agency where the
TE may act as depository of the
assets/properties and shall manage the
same in accordance with the provisions of
the trust/agency agreements

Other Fiduciary Accounts
o Escrow
o Safekeeping
o Custodianship
o Court Trust
o Legislated and quasi-judicial trust
o Property Administration
o Corporate Fiduciary Accounts

ESCROW
o Documents, real estate, money, or securities

deposited with a neutral third party (the
escrow agent) to be delivered to the parties
involved upon fulfillment of certain conditions,
as established in a written agreement.

Group
ESCROW ARRANGEMENT
Example: PURCHASE OF REAL ESTATE
BUYER SELLER
Escrow Agent
(Trust Center)
Submits
Deposits funds documents
Releases documents Releases funds

SAFEKEEPING AND CUSTODIANSHIP
Safekeeping
TRUSTEE
CLIENT/PRINCIPAL Acts as agent
Valuables
Keeps them safely and
returns them to the
owner upon the owner’s
order or instructions
Custodianship
CLIENT/PRINCIPAL Securities and TRUSTEE Safekeep, preserve the

other valuables property and perform
ministerial acts with the
Trustee respect to the property
as directed by the client
Usually stocks and bonds

Group
Other Important Notes
•Clients are tested for suitability before investing in UITFs
•A waiver is required in case client chooses a UITF product that is riskier than what the suitability
warrants
•RMs are trained/oriented before they sell UITF products (training done via NEOP and region visits
and boot camps)
•Only UITFs are sold through the branches; if the clients wish to open a trust account they are
referred to trust
•If the branch is uncomfortable selling the UITFs, Trust is contacted

•Before opening accounts clients have to sign the necessary
•documents, KYC is performed
•Branches only receive plaques of appreciation for selling UITFs, there is no financial reward.
Documentary Requirements – UITF (Personal)
 Participating Trust Agreement (PTA)**
 Risk Disclosure Statement*
 Client Suitability Assessment (CSA)*
 Signature Card
 Photocopies of two (2) IDs of the signatories, TIN Nos., and SSS No.
** Documentary requirements for each Fund would vary (2 copies – 1 client and
1 for the branch)
* shall be fully accomplished and signed by the authorized signatories.
Documentary Requirements – UITF
(Corporate)
 Participating Trust Agreement (PTA)**
 Risk Disclosure Statement*
 Client Suitability Assessment (CSA)*
 Signature Card
 Photocopies of two (2) IDs of the signatories, TIN Nos., and SSS No.
 Articles of Incorporation and By Laws (Certified True Copy),
 Board Resolution appointing UBP-Trust & Investment Services Group as the
Trustee and signatories of the account (Original Copy).
** Documentary requirements for each Fund would vary (2 copies – 1 client and
1 for the branch)
* shall be fully accomplished and signed by the authorized signatories.
Duration
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 around 1% for every 100 basis point (1.00%) 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.
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.
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%.
Others
How to Participate in UIT Funds
You may proceed to any of our more than 180

branches nationwide. For a complete list of our
branches, kindly visit the link below:
http://www.unionbankph.com/index.php?option=com_content&view=article&id=1043&Itemid=325
To download forms, visit link below:

http://www.unionbankph.com/index.php?option=com_content&view=article&id=985&Itemid=81
Trust and Investment Services Group
Direct Line / Local Email address
Vincent Acosta 667-63-88 loc. 8084 vsacosta@unionbankph.com
Carlos Munoz 637-76-72 cadmunoz@unionbankph.com
Malou C. 8645 mcsesbreno@unionbankph.com

Sesbreño
Ralph E. Alo 637-76-72 rsealo@unionbankph.com
Cecile Gaston 8645 clgaddi@unionbankph.com

Thank you!
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.
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.
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%.
Comparative Performance of Various Tax Exempt
UITFs
TAX-EXEMPT UITFs
YEAR-ON-YEAR
INSTITUTION UITF NAME NAVPU RETURN ON INCEPTION DATE
INVESTMENT(%)
BDO MERIT FUND

BDO Unibank, Inc. INTERMEDIATE TERM 158.8808 0.8569 19-Dec-05
PORTFOLIO
UnionBank Tax Exempt Portfolio was the best
BDO MERIT FUND MEDIUM
performing Tax Exempt UITF as of August 16, 2018
BDO Unibank, Inc.
TERM PORTFOLIO
148.526 -0.4409 06-May-10
BDO Unibank, Inc.

at 2.05%.
BDO PERA BOND INDEX
100.6232 0.4477 27-Jun-17
FUND
BDO PERA EQUITY INDEX

BDO Unibank, Inc. 108.7223 -8.6026 22-Dec-16
FUND
UnionBank Tax Exempt Portfolio was the best

BDO Unibank, Inc.
BDO PERA SHORT TERM
FUND
102.0835 1.8923 27-Jun-17
performing Tax Exempt UITF last year at 3.36%

BPI Asset Management Odyssey Tax-Exempt Peso
while the median return of the industry is only at
and Trust Corporation Fixed Income Fund
0 No data provided 06-Jan-04
Robinsons Bank
1.59%.
RBank Tax-Exempt
Retirement Fund (A Balanced 101.862467 0.6652 07-Oct-16
UITF)
UnionBank Tax Exempt

Union Bank 189.777444 2.0481 01-Oct-07
Portfolio
86
Comparative Tracking Errors of Various Equity Index
Tracker UITFs
Fund 1 Year Since Inception

Unionbank Philippine Equity
0.03% 0.04%
Index Tracker
BDO Equity Index Fund 0.03% 0.07%
BPI Philippine Equity Index

0.01% 0.07%
Fund
UnionBank Philippine Equity Index Tracker has the
lowest tracking
Security error
Bank Equity at 0.03%
Index for 1 year and
0.01% 0.17%0.04%
Fund
since inception
Metrobank PSEi Tracker 0.03% 0.21%
First Metro ETF 0.10% 0.23%
87
Equity Index Tracker Fund
As a Satellite Investment Outlet
 A Peso denominated UITF that aims to mirror the
movement of the PSEi or the local stock market
benchmark index.
 The underlying investments of this fund are the 30
different equities from the PSEi, which represent various
and major industries in the Philippine economy.
 The portfolio aims to buy all the stocks in the same
weight as the index to provide the return and mirror the
performance of the PSEi
 A fund designed for long term passive investors with a
buy-and-hold strategy.
88
RETIREMENT
FUND
 We will help you set up and manage your retirement
fund
 This will benefit both your company and your employees.
 We will design and recommend an investment program
for you with the objective of maximizing the earnings of
your retirement fund.
 Retirement Funds maintained under a Trust entity enjoy
tax incentives.
TRUSTEED
RETIREMENT FUND
Self
Truste Insured Administered
e
Tax Incentives   
Professional Fund
Management   
Plan Admin
  
Contribution Flexibility
  
Transparency of
Investment Strategy   
Guarantee of Return
  
TRUSTEED
RETIREMENT FUND
91
TRUSTEED
RETIREMENT FUND
DOCUMENTARY
REQUIREMENTS
Forms to Fill Out and Documents to Submit:
1.Photocopy of Government Issued IDs Of
Sign: Authorized Signatories
1.Customer Information Record & Signature 2.Corporate Documents
Cards a. Articles of Incorporation
a. 1 for the company b. By-Laws
b. 1 for each signatory c. General Information Sheet
2.Trust Agreement (4 copies signed on all d. SEC Certification of Registration
pages) 3.Board Resolution
3.Risk Disclosure Statement a. Appointing UnionBank as Trustee/
Investment Manager
4.Customer Suitability Assessment Form
b. Appointing the Authorized Signatories
5.Waiver to Invest in Specific Instruments (if 4.BIR Certificate of Tax Exemption (if applicable)
applicable) 5.Indemnity Agreement for any changes in
6.Investment Policy Statement signatories
ADMINISTRATION OF THE
RETIREMENT FUND
We ensure efficient and timely administration and servicing of
your account through our service level agreements
Actuarial Service
Providers
ACTUARIAL ADVISERS, INC.
MS. TESS CABALZA
Unit P-1, VGP Center, 6772 Ayala Avenue, Makati City Philippines
812-8395 / 812-8512 / 8140408
E.M. ZALAMEA ACTUARIAL SERVICES, INC.

MS. ANGELA MAGNO
Rm. 1504 Cityland 10 Tower 2, 6817 H.V. Dela Costa Street,
Salcedo Village, Makati City, Philippines
893-8456 / 812-5250 / 894-2095
KEY ACTUARIAL INTELLIGENCE, INC.

MR. GEORGE S. ONGKEKO JR., FASP / ASA / FRM / CFA
President & Chief Actuary
405 F. Ortigas St. Mandaluyong City
501-5876 / 622-7069
TRUST
FEES
 Trust fee at 0.50%
UITF Products Trust fee
UB Philippine Fixed Income 1% p.a.
Philippine Equity Index Tracker 1% p.a.
Tax Exempt 0.25% p.a.
Capital Accumulation Global Fund
1.5%
of Funds (USD)
* No double charging of fees for underlying UITFs under the

Account
96
Sample Computation
When Coupons are Reinvested
- Face Value: PHP 10,000,000
- Annual Coupon: 7% gross, payable quarterly
- 5 Years
Treasury
Net of tax coupon per quarter: PHP 14,000
Total proceeds without reinvestment of coupons: PHP 10,280,000
Trust
Net of tax and trust fee: PHP 13,375
Total proceeds with reinvestment rate at 7%: PHP 10,294,624.18
97
Quick Overview:
Treasury vs Trust
Treasury Trust
Considered as the “heart” of a Separate entity from the Bank
Banking Unit
Bank (“Chinese Wall”)
Purpose of Engage in proprietary trading for Provides investment management
Trading the Bank services for the clients
Spreads / Trading income / Interest Trust Fees & other minimal
Source of Income
Earnings / Brokerage Fees administrative charges
Income / Losses Income / Losses are for the Income / Losses are for the account of
from Trading account of the Bank Trust Clients
UITF, IMA, PMT, Retirement Fund
Deposits, Fixed Income, FX,
Main Products & Management, Escrow Agency, Facility
Derivatives (i.e. FX & Interest Rate
Services Agency, Receiving/Transfer Agent,
Swaps)
Insurance Trust
Maintains accounting records for each
Accounting RBU & FCDU Books of the Bank
client
Advantages / Disadvantages:
Client Perspective
Treasury Trust
Minimum Depends on the minimum trading lot
Investment of security / minimum required PHP 1,000,000
Requirement amount for deposits
Mostly limited to withholding tax / Withholding tax, Trust Fees & minimal
Payable Fees
minimal broker’s fees broker’s fees
Investment
Limited to local market Can provide access to offshore funds
Opportunities
Customizable, which can maximize
Products/Services
growth potential of the fund (depending
& Fund Mostly straight-forward
on client’s risk profile, objectives,
Management
investment horizon)
Can source for higher rates from other
Money Market Pricing will depend on the bank’s
counterparty banks by making bulk
Rates requirements (limited)
placements
Fixed Income Limited to approved fixed income
GS, Corp Bonds, PNs, Commercial Papers
Products securities
Advantages / Disadvantages:
Client Perspective
Treasury Trust
Flexibility of Re- Coupon payments are automatically being

Can be reinvested in time deposit, UITFs and etc
Investment credited to settlement account
On boarding experience or KYC documents (csaf, cir, risk disclosure etc) – KYC documents (csaf, cir, risk disclosure etc) – one
requirements one time only time only
Corporate bonds- PDTC FORMS such as account

Booking of Security (Buy opening, trade related transfer form, ids,
LOI and LOA only
or sell) confirmation advice and etc.
Government Bonds- BTR forms
Per security forwarded by PDTC , Deposit
Statement or Advice Regular financial statement
Certificate
Objective (mostly depends on clients’

Relationship to Clients Establishes long-term relationship with clients
current/short-term requirements)
Portfolio Level Overview – Quarterly/monthly FS with

Overview of Various
Usually on a Per Security and Fragmented Basis Asset allocation, attribution analysis, investment
Investments
activity report and ROI.
Sample Computation
- Face Value: PHP 10,000,000
- Annual Coupon of 7% gross, payable quarterly
- 5 Years
Treasury
Net of tax coupon per quarter: PHP 14,000
Total proceeds without reinvestment of coupons: PHP 10,280,000
Trust
Net of tax and trust fee: PHP 13,375
Total proceeds with reinvestment rate at 7%: PHP 10,294,624.18
Duration and VaR Limits
Duration Limit VaR Limit
Short Term Fixed Income 1 1.00% in 1 day w/in 99% Confidence Level
Dollar Bond Fund 5 5.00% in 1 day w/in 99% Confidence Level
Peso Balanced Fund 10 6.00% in 1 day w/in 99% Confidence Level
Large Cap Equity Fund N/A 7.00% in 1 day w/in 99% Confidence Level
Peso Fixed Income Fund 5 3.00% in 1 day w/in 99% Confidence Level
Long Term Fixed Income 7 .00% in 1 day w/in 99% Confidence Level
Intermediate Term Fixed Income 5 .00% in 1 day w/in 99% Confidence Level
Infinity Prime 3 2.00% in 1 day w/in 99% Confidence Level

Duration and VaR Limits
Duration Limit VaR Limit
Tax-exempt 7 5.00% in 1 day w/in 95% Confidence Level
Dividend Play N/A -
Index Tracker Fund N/A 6.00% in 1 day w/in 99% Confidence Level

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UBP Trust and Investment Services Group

UITF Product Concept

UnionBank of the Philippines – Trust and Investment Services

• Governments use Money Market and Capital

• Corporations use Money Market and Capital Market

UnionBank of the Philippines – Trust and Investment Services Group

o It is where you can invest in

o A company sells shares of

UnionBank of the Philippines – Trust and

The investing public can buy Majority shares must be

Sunday, May 2, 2021 UnionBank of the Philippines 6

Sunday, May 2, 2021 UnionBank of the Philippines 7

o Capital Appreciation – Increase in the market

o Dividends – Distribution of a portion of a

UnionBank of the Philippines – Trust and

UnionBank of the Philippines – Trust and

- Companies are NOT under any obligation to

Sunday, May 2, 2021 UnionBank of the Philippines 10

INVESTOR PURCHASING THE BONDS

Sunday, May 2, 2021 UnionBank Template 12

P 5,000 P 5,000 P 5,000

Sunday, May 2, 2021 UnionBank Template 14

Equity holders are aggressive. They can

UnionBank of the Philippines – Trust and Investment Services Group

INDIVIDUAL/CORPORATE VARIOUS INVESTMENT

UnionBank of the Philippines – Trust and Investment Services

An open-ended trust fund allows clients to invest or redeem

An investor will be able to purchase units in the fund itself

It contrast with a close-ended fund, units are usually being

UnionBank of the Philippines – Trust and Investment Services Group

The NAV per unit is the price at which investors

 (B) Fixed Income/Bond Fund - This type of fund is invested in a mix

• Valuation is NOT on an accrual basis.

• If security has no fair market value, then it shall be assumed to be of no

Market Value of Investments and

- Accrued management fees, taxes

NET ASSET VALUE

UnionBank of the Philippines – Trust and Investment Services Group

NAV per unit

Price at which investors can purchase or redeem

UnionBank of the Philippines – Trust and Investment Services Group

Price at which investors can purchase or

UnionBank of the Philippines – Trust and Investment Services Group

The unit price for the day is known as

The NAVpu changes daily depending

Additional investments and withdrawals

UnionBank of the Philippines – Trust and Investment Services Group

Will serve as the basis of

UnionBank of the Philippines – Trust and Investment Services Group

Nav is used in NAV per unit P 120.00

UnionBank of the Philippines – Trust and Investment Services Group

NAV per unit P 120.00

Additional Investment P 100,000.00

Total Units 1,000 + 833.33

UnionBank of the Philippines – Trust and Investment Services Group

UnionBank of the Philippines – Trust and Investment Services Group

 Investment products: may lose principal

 Past performance is not indicative of future returns

 UIT Funds are not insured by PDIC

 Higher potential returns are associated with higher

 NAVPU fluctuates daily and are computed at the end

Zero Return RETURN High Return

•Assist clients in understanding their return