The BDO Peso Bond Fund UITF (unit investment trust fund) posted a year-to-date return on investment (ROI) of over 6.3% as of December 28, 2020. The performance was undoubtedly much better than Sun Life’s 4.1% and the PSEi (Philippine Stock Exchange Index) return of -8.6%.
Again, past performance does not guarantee future performance. With interest rates now hovering near zero, the performance of bond funds in 2021 is not expected to be as stellar as this year.
BDO seems to be a good choice for future investment. I was wondering, I have 500,000 Pesos, should I place it in UITF or time deposit? Maybe you can shed light on this. Thank you!
-John Cabigting
Hi John, thanks for writing in. Time deposit rates, along with T-bill and other deposit products, are presently close to zero and are not expected to rise anytime soon. It could still even go down further. The low rates are due to the BSP (Bangko Sentral ng Pilipinas) policies applied to combat the effects of covid-19 on the economy.
Bond UITF is better than time deposit but don’t expect the same returns as this year (2020). Equity UITF or stocks could fare much better next year as the economy recovers from the pandemic. However these are high-risk investments which I recommend you not to be delving into unless you do sufficient research and are willing to lose part or all of your investment.