An investor earns from a UITF through the difference in NAVPU of the units between the time of subscription and redemption.
For example, an investor invests ₱10,000 in BDO Short Term Fund on January 3, 2019. The NAVPU of BDO Short Term Fund on that day is 103.2837.
No. of Units = ₱10,000 divided by the NAVPU of 103.2837
No. of Units = 96.8206
The following year, the investor decides to redeem his investment. The NAVPU of BDO Short Term Fund on January 3, 2020 is 107.8528.
Amount redeemed = No. of Units of 96.8206 x 107.8528
Amount redeemed = ₱10,442.38
Income = Amount redeemed of ₱10,442.38 less original investment of₱10,000.00
Income = 442.38
Or
Return on Investment = Income of 442.38 divided by original investment of ₱10,000.00
Return on Investment = 4.4238%
*above computation is for illustration purposes only. Past performance is not a guarantee of future returns.
