7/27/2019 HW_RCBC Phoenix Dollar Fund UITF

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Eunice Cerdea FINA402 June 17, 2013

Mark Darrell Mendoza Homework #2 FM4A

RCBC Phoenix Dollar Fund UITF

1. Moneyness

Moderate in moneyness. Since RCBC Phoenix Dollar Fund UITF invests in short-term

securities, they can be converted into cash in two (2) or three (3) years time. Also,

since it is a type of UITF, buying and withdrawal is easy. Going to the bank andrequesting for withdrawal would immediately transfer your funds to your settlement

account.

2. Divisibility and

Denomination

P3.85B fixed rate issued. Based on our research, RCBC Phoenix Dollar Fund UITF

had issued the first portion of its P3.85 billion in fixed rate and zero coupon Long Term

Negotiable Certificates of Time Deposit. Of the amount, P2.033 billion were from fixed rate

and P1.817 billion were from zero coupon Long Term Negotiable Certificates of Time

Deposit (LTNCDs).

3. Reversible

Low reversibility. It has a low reversibility because any fluctations or volatility of the

RCBC Phoenix Dollar Fund UITF would be charged into the account of the investor.

Thus, if fluctuation would be high, it could result to a lesser chance for the investor to

get back his investment in cash.

4. Term to MaturityMaximum tenor of two (2) year. RCBC Phoenix Dollar Fund UITF invests in short term

fixed income securities. Their minimum holding period is thirty (30) days.

5. Liquidity

Moderately liquid. Ever since Unit Investment Trust Funds (UITFs) are launched, they

show a positive increase in the financial market. The RCBC Phoenix Dollar Fund UITF

is moderately liquid because for the past quarter, they showed a positive increase

though fluctuations

6. ConvertibilityNot convertible. RCBC Phoenix Dollar Fund UITF cannot be converted to any other

financial assets.

7. Currency

Peso and Dollar Currency. Based on our research, the RCBC Dollar Fund UITF can

be bought in peso or dollar. RCBC UITFs can be bought for a minimum of PhP 25,000

for peso currency or USD 1,000 for dollar currency.

8. Cash Flow and

Return

Predictability

1.29 USD mutual fund Net Asset Value. On our research, the dividends of RCBC

Phoenix Dollar Fund UITF are included in mutual fund Net Asset Value which has a

value of 1.29 USD. It also shows that there is an additional 0.002% year dividend

growth.

9. Complexity

Complex. RCBC Phoenix Dollar Fund UITF is complex because based on our

research, they are not deposits or obligations and are not guaranteed, or insured of

RCBC and any of its affiliates or subsidiaries. They are also not insured by the

Philippine Deposit Insurance Company (PDIC). Thus, they are complex because they

are exposed to market fluctuations and price volatility.

10. Tax Status

The RCBC Phoenix Dollar Fund UITF is similar to the taxation terms of Common TrustFunds (CTF). Since they are both handled by the trust department of banks, they arenot taxable entities and income paid to these funds is also not subject to income tax.The income of the common trust fund is subject to 20% final withholding tax upondistribution to the investors.