More hurdles left to clear for Sagicor Select funds conversion
Published:Wednesday | September 3, 2025 | 12:05 AM
Sagicor Select Funds Limited has received shareholder approval to transform into its two exchange-traded investment funds into unit trusts, a process that is expected to conclude with their delisting from the market.
The funds are currently trading one-quarter or $2.15 billion below their value.
The vote on August 19 by holders of Class B and Class C shares in Sagicor Select, which approved the new scheme of arrangement for Sagicor Select Fund Financial and Sagicor Select Fund Manufacturing & Distribution, respectively, was overwhelmingly in favour of the scheme, well above the required 75-per cent threshold, with only a handful of votes against it.
The court is now expected to make a final pronouncement on the scheme. Regulatory approval is also pending for the unit trusts.
Launched in 2019, the funds were seen as an option for the more risk-averse stock market investor.
At the time, Jamaica’s stock market was one of the fastest-growing indices globally, peaking over 500,000 points. Today, the index hovers at 326,000 points. But it is still doing slightly better than the pandemic lows.
The performance of the Sagicor Select funds, which are indexed to the classes of financial and manufacturing & distribution stocks trading on the Jamaica Stock Exchange, has been lukewarm. The funds consistently trade at a discount to their net asset value.
Combined, the funds have a market value of $5.4 billion, well below their net asset value, or NAV, which stood at $7.5 billion at mid-August. This persistent gap between the trading price and the NAV has prompted Sagicor’s management to pursue conversion to unit trusts and delisting of the funds.
“The board and management of Sagicor Select Funds Limited have seen that, consistently, the price at which the shares of each fund trades on the JSE is at a relatively steep discount to the published net asset value of each fund,” the company stated in its June second-quarter report.
“After due consideration, the Board has determined that conversion of the two funds to unit trusts is the most effective solution to the issue facing shareholders,” it said.
Currently, the SELECTF stock trades at $0.43 per share, while its underlying assets are valued at $0.55 per share, according to Sagicor’s NAV disclosure for August 14. SELECTMD trades at $0.84, with underlying assets worth $1.24.
Sagicor Financial Select Fund and Sagicor Distribution & Manufacturing Select Fund trade at $2.15 billion and $3.2 billion in market capitalisation, respectively. The net assets of the funds are worth $2.8 billion and $4.75 billion, respectively.
Sagicor Group Jamaica said shares held in the select funds will be converted to units in the relevant unit trust.
Having received shareholder approval for the conversion, Sagicor will present the findings to the Supreme Court in a second hearing seeking approval of the scheme of arrangement.
“Additionally, we await the approval and licensing of the new unit trusts by the Financial Services Commission,” Sagicor Group said.
“The delisting of the select funds and conversion to the unit trusts will take place providing that the scheme is sanctioned by the court and the FSC approvals are granted,” the financial conglomerate said.