Tue | Aug 21, 2018

Proven Wealth exec suggests diversifying away from local stocks

Published:Sunday | November 26, 2017 | 12:00 AMSteven Jackson
Proven Wealth celebrated the performance of its year-old Proven Plus product at an event at the Porche dealership in New Kingston on Wednesday, November 22, 2017. Seen here from left are Assistant Vice President Ryan Reid; Head of Treasury and Investments Melissa Spence; and Assistant Vice President Richard Gordon.

Investors might want to consider diversifying away from local equities next year, according to Ryan Reid, Proven Wealth's assistant vice-president for wealth management.

However, Reid said his own company is yet to determine its own investment path next year.

"The Jamaica Stock Exchange offered attractive returns over the last two years and it may be time to diversify, if heavily weighted in equity, to offset downside risk," he told Gleaner Business.

The main market multiples are performing at 23.1 times earnings, on average, and the junior market 23.6 times earnings, according November 17 data research

from competing entity Barita Investments. Those estimates are from multiples in the single digit realm a few years ago.

Ryan said it's "tough" to reveal the 2018 investment strategy for Proven Wealth at this time, but noted that a more concrete decision would be made by the firm in January.

On Wednesday, Proven fÍted clients at the Porsche Kingston dealership to celebrate annual gains made by its Proven Plus product - nine per cent in US-dollar terms.

Proven Plus, which was launched in May 2016 for high net worth clients, requires a minimum investment of US$200,000 for a tenure of three years. The product focuses on US equities and emerging market bonds but also invests in the local equity market, which offered promising returns.

Investors are charged a 1.0 per cent management fee, and a 0.2 per cent fee once the fund surpasses 6.0 per cent gains.

"So it is a push for management to perform," said Reid.

Jamaica's stock market has been bullish since 2015, which has served to drive up stock market wealth beyond $1 trillion.