Monday, April 22, 2013

BDO Equity UITF (EPCIBEQ:PM) Now Charges Front and Back Load Fees? It Turns Out That It Does Not

I'm not exactly sure when it happened, but the last time I checked the fund still was not charging sales fees. Now, according to Bloomberg, it is.

When I saw this, it seemed to me that BDO was taking advantage of the growing popularity of UITFs and stocks, and investing in general. But even if it were true, charges like this are not necessarily bad. If the fund is performing better than its peers to a degree that makes it worth paying extra, then there's no reason not to invest in the fund.

What's confusing is that BDO has ANOTHER equity UITF: the BDO Institutional Equity Fund (BDOEQTY:PM). And this one does not have a sales load.

I'm not sure how different these two are in terms of composition--BDOEQTY is not listed on the page where monthly reports for BDO UITFs can be found, and all I can find is this report from last year.

Based on performance, however, these two funds have performed very similarly in the past 5 years, although BDOEQTY has a slight edge over EPCIBEQ:PM.

Remember, sales loads (i.e., the front load and back load) are not reflected by the NAVPU, so the difference between BDOEQTY and EPCIBEQ would be more substantial if we take these additional fees into consideration. If EPCIBEQ does charge sales load fees. But as you'll see in the updates below and the comments section, it really does not.

UPDATE 22 April 2013, 2:14pm

Some readers have pointed out that there has been no mention of the sales load in the BDO Equity UITF monthly reports. Another reader has called BDO, who told her that BDO EQUITY UITF has NO SALES LOAD. So until we get official confirmation, I'll leave the post as is and keep everyone updated.

UPDATE 22 April 2013, 6:52pm

As you see in the comments section below, one of our good friends at BDO Trust, Ms. Ma. Lourdes T. de Vera, went out of her way to clarify the issue. So EPCIBEQ does not charge sales load fees as indicated on Bloomberg. You'll find her full message on the comments section, but for the benefit of other readers, I will post her message in the post body below:


Dear  Investor Juan, 

On behalf of BDO Unibank, Inc. - Trust and Investments Group (BDO-Trust), I would like to inform you that all BDO UITFs, including the BDO Equity Fund, do not charge any sales load (i.e. front or back load fees).  In fact, BDO-Trust prides itself in charging one of the lowest fees in the industry. 

Furthermore, in the event that there will be any such changes in the features or fees of the BDO Equity Fund or any of our funds, we are mandated by Bangko Sentral ng Pilipinas' regulations to go through an approval process which includes a 30-day advance notice to all existing participants or investors (to give them  time to withdraw if they are not amenable to the changes). Such notice has to be posted in our branches and in our website. 

We also wish to inform you that we have  requested Bloomberg to correct the wrong information that the BDO Equity Fund is charging front and back load fees. 

To answer the other question on what is the difference between the BDO Equity Fund and the BDO Institutional Equity Fund, the former is for retail clients while the latter is for tax-exempt entities whose tax-exemptions are supported by Bureau of Internal Revenue (BIR) tax-exemption certicates. 

For additional clarifications, please do not hesitate to call us at tel nos. 878-4265 and 878-4244 or  email us at 

Thank you.

Very truly yours, 

Ma. Lourdes T. de Vera 
Senior Vice President 
BDO Trust and Investments Group  

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