Tue | Jan 26, 2021

Unit trust market in bloom

Published:Tuesday | February 6, 2018 | 12:00 AMAvia Collinder

The Financial Services Commission (FSC) regulator of the securities market, says Sagicor Investments Jamaica Limited continues to lead the unit trust market, with nearly half of the assets under management.

In the span of one year, unit trusts and mutual funds, which are classified as collective investment schemes, climbed in value by more than $30 billion or nearly 17 per cent, from $181 billion to $211 billion at the end of September 2017.

It is now a bigger market than retail repos, the latter having fallen to $195 billion at December 2017.

The various unit trust products on the market are yielding annual returns of anywhere between 0.55 per cent and 6.6 per cent, according to the weekly trade report published by fund managers.

The current $211.47-billion estimate of funds under management in the FSC's most recent industry report for the September quarter does not include Proven Fund Managers which made its market entry in the fall, growing the number of fund managers to eight.

The other seven and their market share at September 2017 are: Sagicor Investments, 47.6 per cent; Scotia Investments Jamaica, 17.7 per cent; NCB Capital Markets, 16.8 per cent; Barita Unit Trusts Management, 6.9 per cent; JMMB Fund Managers, 6.4 per cent; Victoria Mutual Wealth Management, 3.9 per cent; and JN Fund Managers with 0.7 per cent.

Proven entered the market with four products, pushing the number available in the market to around 57.

Unit trusts and mutual fund portfolios are composed mainly of fixed income securities, real estate investments, and equities, in different combinations.

The FSC said that for the September quarter, approximately 70 per cent of the funds were invested in fixed income securities, nearly 18 per cent in real estate, and 12 per cent in equities. The equity investments are primarily in stocks on the Jamaica Stock Exchange, the FSC said.

Also during the September quarter, fund managers sold units valued at $17.62 billion, and redeemed $11.33 billion.