How to Invest in the S&P 500 via UITFs in the Philippines
Discover what it is, why it beats the PSEi, what Warren Buffett says, and which local fund is the easiest way in.
Updated on May 27, 2026 · 10 min read
Fact Checked
Quick answer
Filipinos can get S&P 500 exposure either through a peso-denominated feeder UITF or index fund offered by local banks and insurers, or through a foreign broker buying a US-listed ETF directly. Local feeder funds are simpler and need no US paperwork but add management fees and peso conversion; direct ETFs are cheaper to hold but involve currency transfers, US dividend withholding tax, and estate-tax considerations. Both are long-horizon investments exposed to both market and peso-dollar movement.
Key takeaways
- Feeder UITFs invest in an underlying global fund, so you pay both the local and underlying fees.
- Direct US ETF investing exposes non-resident holders to 30% US dividend withholding tax.
- Returns in peso terms combine index performance with USD-PHP movement.
- Peso-cost averaging monthly reduces the impact of entry timing.
- Check the fund's tracking approach, fees, and minimum investment before comparing headline returns.
You've probably heard "just invest in the S&P 500" repeated everywhere — on podcasts, finance subreddits, and YouTube. But if you're a Filipino with idle money sitting in a bank, the real questions are: Can you actually do this without a complex US brokerage account? And is it really better than investing in our own stock market? The answer to both is a resounding yes. Here's the full breakdown.
What Is the S&P 500?
The S&P 500 — Standard & Poor's 500 — is an index that tracks the 500 largest publicly traded companies in the United States. It distills the performance of nearly $60 trillion dollars worth of American enterprise into a single number, updated every second the market is open.
When you invest in an S&P 500 fund, you buy a tiny slice of all 500 companies at once — instantly diversified across every major sector of the world's largest economy. No stock picking. No research required.
The index is self-cleaning by design: underperforming companies get dropped; fast-growing ones get added. You are always holding the current top 500 — automatically, without lifting a finger.
S&P 500 vs. the PSEi: The 5-Year Scorecard
The PSEi (Philippine Stock Exchange Index) is our local equivalent — it tracks the top 30 blue-chip companies on the Philippine Stock Exchange: SM Investments, Ayala Corp, BDO, JG Summit, PLDT, and others. It's a fair barometer of the Philippine economy. But here is where the comparison gets uncomfortable for local market fans.
| Year | S&P 500 Return | PSEi Return | Winner |
|---|---|---|---|
| 2021 | +28.10% | −0.24% | 🇺🇸 S&P 500 |
| 2022 | −18.29% | −7.81% | 🇵🇭 PSEi (less bad) |
| 2023 | +25.74% | −1.77% | 🇺🇸 S&P 500 |
| 2024 | +24.44% | +1.22% | 🇺🇸 S&P 500 |
| 2025 | +15.96% | −7.29% | 🇺🇸 S&P 500 |
Sources: S&P Global, PSE. S&P 500 figures are price returns. PSEi year-end close data from the Philippine Stock Exchange. Past performance does not guarantee future results.
Over those five years, the S&P 500 delivered cumulative gains of over 80%. The PSEi posted negative returns in four of those five years — and in 2025 shed another 7.29%, closing at 6,052.92, well below its all-time high of 8,764 set in January 2018.
The PSEi's core weakness is structural: it's top-heavy. Six conglomerate families (SM, Ayala, JG Summit, etc.) account for over 40% of the entire index. When those holding companies struggle, the whole market drags. Compare that to 500 companies spanning every major industry on earth.
In 2022 — when the US Federal Reserve aggressively hiked interest rates and crushed US equities — the PSEi did hold up better as a defensive market. A split between both remains a sensible long-term strategy. But as a primary growth engine over the past decade, the S&P 500 is in a different league.
Why It's the Gold Standard — and What Warren Buffett Said
There are hundreds of stock indices in the world: the Dow Jones, the NASDAQ 100, the Nikkei 225, the FTSE 100. So why does the S&P 500 get called the gold standard? Four reasons:
The person who argues most forcefully for this approach isn't a personal finance blogger. It's Warren Buffett — arguably the greatest investor who has ever lived.
"My regular recommendation has been a low-cost S&P 500 index fund. Both large and small investors should stick with low-cost index funds."
— Warren Buffett, 2017 Letter to Berkshire Hathaway Shareholders
In his 2013 shareholder letter, Buffett revealed the instructions he left for managing his own family's wealth after he's gone. His directive: put 90% in a very low-cost S&P 500 index fund and 10% in short-term government bonds — because he firmly believes that strategy will outperform most investors, including pension funds and professional institutions, over the long run.
"Just pick a broad index like the S&P 500. Don't put your money in all at once; do it over a period of time."
— Warren Buffett
For Filipinos, this translates directly to peso-cost averaging (or dollar-cost averaging) — investing a fixed amount monthly, regardless of where the market is.
The Philippine Funds Linked to the S&P 500
You don't need a US brokerage account to get started. Philippine banks offer UITF feeder funds (Unit Investment Trust Funds) that accept your pesos, automatically convert them, and invest into instruments that track the S&P 500. The gains flow back to your account.
Here are the main options available as of 2025–2026:
BDO
EastWest Bank
Security Bank
Metrobank
RCBC
BPI BPI Wealth
The Case for US Dollar-Denominated Accounts
The peso-denominated funds above are the easiest starting point — but there's a compelling strategic argument to hold some of your investments in US dollars directly. Here's why history makes this worth considering.
This long-run depreciation means that a Filipino who held assets in US dollars — even in a simple savings account — was automatically preserving purchasing power that a peso account was slowly eroding. Add equity market returns on top, and the dollar advantage compounds significantly.
Fees, Hidden Costs & What to Watch Out For
Philippine bank feeder funds are not free — and the charges layer up in ways that aren't always obvious on the brochure. Here is what is actually being deducted from your investment:
Note on tax: UITF equity funds in the Philippines are generally structured so that gains are realised through NAV appreciation rather than declared interest income, which has historically been treated favourably for retail investors. Consult a tax professional for your specific situation.
Your Action Plan: The Easiest Path In
If you already have a bank account, start there — the path of least resistance wins — but if you have the choice, pick the lower fee. Fee matters more than it looks: the difference between 0.50% and 1.50% compounds over time.
Every bank requires a CSA before you can access equity UITFs. It's a short questionnaire that determines your risk profile — you need to be classified as "Aggressive" to invest in an S&P 500 feeder fund. You can complete this online through each bank's app or website. Answer honestly — it only takes a few minutes.
All six banks allow you to enroll and invest entirely online. Read the Key Information and Investment Disclosure Statement (KIIDS) before confirming — it spells out all fees, risks, minimum amounts, and settlement periods in plain language. Start with whatever you're comfortable with — you can always top up.
Choose a fixed amount you can comfortably add every month. Add it to your calendar as a recurring reminder. This is peso-cost averaging (or dollar-cost averaging): you buy more units when prices dip, fewer when they rise, smoothing your average entry price over time. Consistency beats timing every time.
This is not a get-rich-quick scheme. The market will have years where it goes down — sometimes sharply. But over the long haul, the S&P 500 has proven to be one of the most robust wealth-building instruments in history. Stay the course, keep adding, and let compounding do the heavy lifting.
A blended approach — for example, 70% in an S&P 500 feeder fund and 30% in a PSEi index fund — gives you the US growth engine plus local peso-denominated exposure with no FX risk. PSEi also tends to hold up better during periods when the Fed is aggressively hiking rates.
This is non-negotiable. Keep 3–6 months of expenses in a liquid savings account or a money market UITF first. Your S&P 500 investment must be money you genuinely do not need to touch — if a market crash forces you to sell at the bottom to cover expenses, you will lock in real losses.
Invest in a UITF
Ready to start? Each bank publishes its S&P 500 feeder fund details on its own site.
Frequently asked questions
Disclaimer — This article is for informational and educational purposes only and does not constitute financial, investment, or tax advice. All investments carry risk, including the possible loss of principal. UITFs are not deposit products and are not insured by the Philippine Deposit Insurance Corporation (PDIC). Past performance is not a guarantee of future results. Fee figures and fund details reflect publicly available information as of May 2026 and are subject to change. Always read the fund's Key Information and Investment Disclosure Statement (KIIDS) and consult a licensed financial adviser before investing.
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