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Unit trusts claim more market share from repos

Published:Wednesday | July 26, 2017 | 12:00 AM

Local investment firms are reporting continued growth in funds under management for products falling under the rubric of collective investment schemes.

And new products are still entering the market, the latest being a new US dollar fund from JMMB.

Financial Services Commission (FSC), which regulates the securities market, reports growth of 33 per cent in funds under management for these products between December 2015 and March 2017. The collective investment market comprises seven fund managers, who together offer 50 products, inclusive of JN Fund Managers, which offers mutual funds in a suite of five investment products. Last Friday, JMMB Fund Managers Limited announced that it had launched its second USD product and its eighth unit trust fund overall, called the JMMB USD Giltedge Money Market Fund.

It signals that the shift away from former cash cow, retail repos, is ongoing at JMMB and across the sector as a way to reduce balance sheet risk.

The FSC last valued funds under management for the industry, inclusive of mutual funds, at $189 billion as at March. The market grew by $5 billion or three per cent since December. Meantime, repo liabilities fell to $388 billion in June, down from $403.3 billion in June 2016, the regulator said.

The largest unit trust player, Sagicor Investments, manages an $82.5 billion portfolio made up of 13 funds, and claims 48 per cent of the market.

Tracy Ann Spence, vice-president of investments for NCB Capital Markets, said the company ranked at number three in the unit trust market with $36 billion in funds under management. That puts it almost on par with Scotia Investments Jamaica, whose vice-president of marketing, Yanique Forbes-Patrick, quoted the value of that fund manager's portfolio at $36.4 billion as of April.

Forbes-Patrick did not comment on market position.

JMMB Fund Managers estimates its portfolio at $11.6 billion and says its portfolio grew 53 per cent in the past year.

The unit trust and mutual fund products sold in Jamaica are structured either as equity, fixed income or real estate products or a mix of two or three of those classes.

The most expensive product is a real estate and fixed income fund, the Rea Estate Portfolio, sold by Barita Unit Trust. It's currently trading at more than $5,500 per unit, according to published trading prices. Other unit trust funds trade between $1 and $100 per unit.

JMMB's new product debuted at US$1 per unit.