Set up a trust fund

A young professional should start thinking about financial protection and security while he/she doesn’t have a spouse and children to spend money on.
One option is the trust fund.
When “trust fund” is mentioned, we automatically think that it’s only for the rich who want to provide money for their kin. But, there are different kinds of trust funds that cater to people of varied financial capacities. After all, not only the rich need financial protection.
A trust fund is a unique investment. “If you put up a trust fund, you become like an investor. We pool the funds from different investors and look for an investment outlet that would cater to your type of market,” according to Sheila Uygongco, manager of BDO Molo Branch.
She likened it to investing in a stock market with value that changes every day.
“The fund manager has the option where he or she will invest the money based on your preference. If he or she sees there’s an opportunity with government securities, for example, he or she will do so,” Uygongco added.
She also gave an assurance that fund managers are trained to spot good opportunities.

MONEY MARKET FUND
This fund is suitable for risk-averse individuals and corporate investors who are looking for safe and liquid investments with earnings that are higher than savings deposit or time deposit accounts.
“With the money market fund, we advice investors to let their money stay for six months,” Uygongco said.
The minimum investment is P100,000.
The fund’s portfolio composition includes government securities, short-term deposits and corporate bonds.
During the last quarter of 2010, money market continued to be liquid.

PESO BOND FUND
This fund is suited for investors who are willing to let their money stay for three to five years. This is ideal for risk-tolerant individuals and corporate investors who are looking for higher yields.
“We had a client who invested on the bond fund. After three years, he was able to double it,” Uygongco said.
“We push this fund to retirees or those who work abroad,” she added.
The minimum investment is P100,000.
The fund’s portfolio composition includes government securities, short-term deposits and corporate bonds.
The fund enjoyed a positive momentum in the third quarter of 2010.

PESO BALANCED FUND
“This fund is a combination of government securities and the stock market. Those who are updated with the market prefer this because they could see if the value increases,” said Uygongco.
This is suitable for risk-taking individuals and corporate investors who are aware of the opportunity of high yields that stock market investments may provide but are also knowledgeable of the possibility of capital losses in their investment.
Uygongco said to maximize their earning potential, she advises investors to let their money stay for more than three years.
“I encourage young professionals to start investing in this fund so that when they are in their thirties, they will see it grow,” she added.
The minimum investment is P10,000.

EQUITY FUND
This fund is ideal for more aggressive investors because the yield would come mostly from stocks. “The investor should be willing to let his/her money stay for five years,” Uygongco said.
This coming December when young professionals receive their 13th month pay and bonuses, Uygongco encourages them to set aside P10,000 to open an equity fund. “If you put in P10,000 now, five years later, you’ll get to enjoy as much as 30 percent yield a year. The highest that we can give is six percent and that would make you happy already. Imagine earning P3,000 a year without you doing anything or managing anything,” she said.
An investor will be kept updated through the bank’s website. She added that sometimes, one need not wait for five years. “You can take it out when you see it earning well,” she said.

FIXED INCOME FUND
Its portfolio includes government securities, short term deposits and corporate bonds.
“This is relatively higher than time deposit. The earning is constant every month like three to 3.5 percent, depending on the net asset value,” Uygongco said.
The minimum investment is P10,000.
However, the investor is encouraged to let the investment stay for at least three years.

GS FUND
This is purely government securities fund. It is suitable for risk-tolerant individuals or corporate investors who are looking for investments that have moderate risks. Investment should stay for at least three years.
The minimum investment is P100,000.

ADVICE
Uygongco advises that if a person is young, he/she normally develops big savings. It’s best to set aside money for a trust fund. And when one earns more, start to diversify. “Get a time deposit. Or insurance,” she concluded.*(Marie Katherine Villalon,  The News Today, Sept. 6, 2011)

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