Investing in BDO Equity Fund in Layman’s Term

Hey guys! :P

I recently had the guts to invest in one of BDO’s Unit Investment Trust Fund [UITF]. After careful reading through BDO site, I have decided to not wait any longer and go to the nearest BDO branch. After all, P10K [minimum investment for most of their products – most of them with 30 days minimum holding period] is such a small price for me to risk and also for me to have the opportunity to learn by first hand experience.

I went to this BDO branch November 3rd, 2011 [Thursday]. I was really excited to invest and see my money work for me in real-time and I never though that investing could be so easy:

Step 1: They had me choose which type of UITF I would prefer. Since my quick Investor Profile Questionnaire result has conveyed and since I know for myself that I wanted to take the greater risk – I chose the BDO Equity Fund [suitable for those with higher risk tolerance]. Again – P10K [minimum investment for most of their products – most of them with 30 days minimun holding period] is such a small price for me to risk and also for me to have the opportunity to learn by first hand experience.

Step 2: They asked me to fill out a short form and voila! I gave them my P10k, and my certificate followed a week after. I just needed to monitor the NAVPU [explained below] to check how my money is doing.

Here goes the nosebleed part hehe:

*The Net Asset Value per Unit [NAVPU] at that time was 252.80. Since I have invested P10,000, then P10K/252.80 = 39.55 units [this means I have purchased 39.55 units]

*Watch the value of your units from time to time – In my case, I withdrew my funds 17th Feb, 2012. Current NAVPU at the time was 284.78 [please see below image]. 284.78 [NAVPU] x 39.55 Units = PHP 11,263.049. The sum minus PHP 10,000 [my initial investment] is PHP 1, 263.049. This means I have earned PHP 1, 263.049 in more than 4 months! :) Yehey! :D Not much, but at least my money has worked for me without me doing anything.

After all I went through, here are some tips [most I have experienced for myself] that I find to be very useful in investing in BDO funds:

  • Always watch the growth/drop in the value of your units [NAVPU]. You may check Bloomberg.com from time to time for the latest NAVPU.
  • If the NAVPU goes down, be patient. Wait for it to grow until it is above the NAVPU you have purchased in order for you to earn from your investment.
  • The more you know, the lesser the risk; The lesser you know, the greater the risk. In case you have decided to invest, I suggest that you take time to know what you are going for- before jumping in, and also during the duration of your investment.

I have then re-invested the whole amount [PHP 11,263.049] in the same BDO UITF [Equity Fund]. I will tell you about my second investment at a later post. ;) UPDATE: Click here for Part II

Feel free to comment- let me know what you think, and let’s share our insights so we can help each other build better knowledge and know-how when jumping in to the Investment Jungle.

Sincerely,

FRUSTRATED BILLIONAIRE

Update (02/14/2015): I have published this article, “When Should You Invest in an Equity Fund?", to address one of the most ‘in demand’ questions my viewers have. Enjoy and happy investing!

***Above explanation is for illustration purposes only. Please note that I do not endorse investing in these funds as this will now be based on you, the decision-maker, to determine if investing in these funds will be in your best interest. Please also read through the BDO site for more relevant and accurate information regarding its products and services.