Good news for UITF investors and soon to be investors.
By virtue of BSP Circular 876, BSP has amended the UITF regulations wherein UITFs can now be income-paying, similar to dividends in stocks, without necessarily selling the units owned by the investor.
Currently, Juan can only realize the gains of his UITF investments by selling the units he owns, or for more aggressive investors, a buy-and-sell of UITF strategy.
With this development, soon there will be UITFs that provide passive income via dividends, without the need for Juan to redeem his investment principal. So Juan can just hold on to his principal, enjoy the capital appreciation, while reaping the unit-payment income on the side. Passive income.
Of course this will take time to materialize as BSP-regulated banks that offer UITF try to design their respective products. Here’s another text from BSP as to objectives of this new UITF feature.