Nigel Ed­wards, the ex­ec­u­tive di­rec­tor of the Trinidad and To­ba­go Unit Trust Cor­po­ra­tion (UTC), says he is “per­son­al­ly grat­i­fied” by the re­sults it has ex­pe­ri­enced in Ja­maica, since the launch of three mu­tu­al funds there in March 2023, in part­ner­ship with Ja­maica’s GraceKennedy Cap­i­tal Man­age­ment.

GraceKennedy Cap­i­tal Man­age­ment is a sub­sidiary of GraceKennedy Ltd, the Ja­maican con­glom­er­ate that is list­ed on the Ja­maica and T&T stock ex­changes. The com­pa­ny has a mar­ket cap­i­tal­i­sa­tion of about TT$3.8 bil­lion and has to­tal as­sets of US$1.45 bil­lion as at March 31, 2024.

The UTC signed a joint ven­ture agree­ment to part­ner in the dis­tri­b­u­tion of mu­tu­al funds in Ja­maica in May 2022.

Ini­tial­ly, three prod­ucts were of­fered to Ja­maicans: the GK US Dol­lar In­come Fund; the GK Ja­maican Dol­lar Mon­ey Mar­ket Fund; and the GK Ja­maican Dol­lar Growth & In­come Fund.

In an in­ter­view with the Busi­ness Guardian at his In­de­pen­dence Square of­fice last Fri­day, Ed­wards ex­plained that in its first year in op­er­a­tion, the mu­tu­al fund op­er­a­tion was prof­itable and al­most hit its tar­get for as­sets un­der man­age­ment.

“We’ve spent the first year in Ja­maica en­sur­ing that we have the in­vest­ment un­der­pin­nings right, mak­ing sure that we struc­tured in­vest­ments in a way that’s con­sis­tent with how we run our funds in Trinidad and To­ba­go, and un­der­stand­ing the core unithold­er and what they want in their in­vest­ments and de­liv­er­ing that. So there’s been a lot of en­er­gy on that,” said Ed­wards.

In an at­tempt to get to know the Ja­maican in­vestors and what they want, the part­ners “al­most de-em­pha­sised the sell­ing of the prod­uct un­til we can get the core prod­uct right,” he said.

Notwith­stand­ing that strat­e­gy, at March 2024, af­ter one year in op­er­a­tion, the mu­tu­al fund part­ner­ship hit about 95 per cent of its tar­get, achiev­ing US$29 mil­lion in funds un­der man­age­ment.

“And so that’s why I was very pleased with that re­sult. We found that we were al­so prof­itable. We had bud­get­ed be­ing in a loss-mak­ing po­si­tion, just be­cause in the first two years of op­er­a­tion, we did not an­tic­i­pate be­ing in a place where we would be prof­itable. I’m pleased to see that in the first year of op­er­a­tion, we ac­tu­al­ly did make a small prof­it of just about TT$1 mil­lion.

The UTC ex­ec­u­tive di­rec­tor said the in­ten­tion is to con­tin­ue work­ing with the brand so that the part­ner­ship con­tin­ues to be prof­itable.

The way the UTC-man­aged mu­tu­al funds in­tend to con­tin­ue be­ing prof­itable, Ed­wards said, is by repli­cat­ing in Ja­maica the breadth of own­er­ship that the col­lec­tive in­vest­ment scheme has en­joyed in T&T af­ter 42 years in op­er­a­tion.

He said part of the UTC’s suc­cess in broad­en­ing its ap­peal is “its mod­el of our agents who op­er­ate through­out Trinidad and To­ba­go, help­ing us to reach those vary­ing de­mo­graph­ics.”

This is im­por­tant, he said, be­cause “part of what we’re try­ing to un­der­stand is how do you reach dif­fer­ent ge­o­gra­phies across Ja­maica? How do you reach dif­fer­ent de­mo­graph­ics? There’s a Kingston de­mo­graph­ic that’s very dif­fer­ent from Mon­tego Bay, and the Ne­gril de­mo­graph­ic is dif­fer­ent from Mon­tego Bay.”

Hav­ing achieved US$29 mil­lion in funds un­der man­age­ment in its first year, the in­ten­tion of the UTC/GK part­ner­ship is to start build­ing that out and to start ex­pand­ing rapid­ly.

“I see us be­ing with­in the top three, in­side of five years,” said Ed­wards.

The Ja­maican mu­tu­al fund mar­ket com­pris­es funds of­fered by Sagi­cor Ja­maica’s Sig­ma, Sco­tia As­set Man­age­ment, JMMB Fund Man­age­ment, NCB Cap­i­tal Mar­ket, Bari­ta Unit Trust, Vic­to­ria Mu­tu­al Wealth Man­age­ment, JN Fund Man­agers and Proven. Sagi­cor Ja­maica is the is­land’s largest mu­tu­al fund provider with over 30 per cent of the mar­ket.

Asked to de­scribe the mu­tu­al fund mar­ket in Ja­maica, the fi­nan­cial ex­ec­u­tive said it is “rel­a­tive­ly small” at this time, with about US$2 bil­lion in funds un­der man­age­ment. That com­pares to the T&T mu­tu­al fund mar­ket, which has close to US$8 bil­lion in funds un­der man­age­ment, said Ed­wards.

In speak­ing about the po­ten­tial of Ja­maica’s mu­tu­al fund mar­ket, the UTC ex­ec­u­tive di­rec­tor told a sto­ry of be­ing on a pan­el in Ja­maica a few years ago with an ex­ec­u­tive whose com­pa­ny op­er­at­ed mu­tu­al funds in the north Caribbean is­land.

“This gen­tle­man said to me ‘you know, we ac­tu­al­ly don’t mind you com­ing to Ja­maica, be­cause if you could do for the mar­ket in Ja­maica, what the Unit Trust did for the mu­tu­al fund mar­ket in T&T, all of us will ben­e­fit’.” Ed­wards said he thought that that was a very en­light­ened way of think­ing about a com­peti­tor be­cause the Ja­maican ex­ec­u­tive saw the UTC com­ing to the is­land as po­ten­tial­ly tak­ing a mar­ket that was then about US$1.8 bil­lion mar­ket in size to some­thing clos­er to the T&T mar­ket of about US$8 bil­lion.

“I gen­uine­ly see us be­ing able to do that in Ja­maica if we can get the same sort of method­olo­gies for reach­ing and ed­u­cat­ing the in­vestor mar­ket. I think help­ing peo­ple to un­der­stand the im­por­tance of se­lect­ing the right in­vest­ment prod­ucts for their needs is crit­i­cal­ly im­por­tant in Ja­maica,” he said.

East­ern Caribbean op­er­a­tions

Last No­vem­ber, the UTC yes­ter­day launched the Glob­al Bal­anced Fund Ltd (GBFL) to po­ten­tial in­vestors at the Har­bor Club St Lu­cia, Cu­rio Col­lec­tion by Hilton, at an event in St Lu­cia.

It was first re­tail col­lec­tive in­vest­ment scheme that is avail­able to in­vestors across the en­tire East­ern Caribbean. The GBFL, which com­pris­es re­gion­al and in­ter­na­tion­al stocks and bonds, is be­ing sold in US dol­lars to in­vestors in the East­ern Caribbean.

In his in­ter­view last week, Ed­wards said sales of the fund in St Lu­cia have been “mod­est” with less than US$1 mil­lion so far since No­vem­ber.

“That is not unan­tic­i­pat­ed. St Lu­cia is the beach­head for our ex­pan­sion in the East­ern Caribbean ter­ri­to­ries. So part of the ob­jec­tive is to spread GBFL through­out the East­ern Caribbean through­out 2024. So we’re work­ing on where the next roll­out will be. That, to a large ex­tent, de­pends on the dis­trib­u­tor net­work,” he said.

On the is­sue of the dis­trib­u­tor net­work, Ed­wards dis­closed that GBFL sales have been through a third-par­ty dis­trib­u­tor, “pri­mar­i­ly First Cit­i­zens in St Lu­cia,” re­fer­ring to T&T’s ma­jor­i­ty state-owned bank, which is list­ed on the T&T Stock Ex­change. Apart from T&T and St Lu­cia, First Cit­i­zens has op­er­a­tions in Bar­ba­dos and St. Vin­cent and the Grenadines in the re­gion.

He said the list of dis­trib­u­tors is like­ly to grow at least in the Caribbean, as “there will be dif­fer­ent com­pa­nies, dif­fer­ent dis­trib­u­tors work­ing in dif­fer­ent ter­ri­to­ries,” adding that it is im­por­tant for the UTC to make it work for those dis­trib­u­tors.

“It’s a true part­ner­ship be­cause if we suc­ceed, they suc­ceed. Our ob­jec­tive is to build the funds and to build all the prod­ucts in a way that makes it for a suc­cess­ful in­vest­ment that is easy for them to dis­trib­ute in the ter­ri­to­ry,” said Ed­wards.

Five-year re­turns

The Busi­ness Guardian asked the UTC to cal­cu­late the val­ue of $100,000 in­vest­ed in both the Growth and In­come Fund (GIF) and the TT-dol­lar In­come Fund (TTIF) from Jan­u­ary 2019 to De­cem­ber 2023, as­sum­ing the rein­vest­ment of the in­come and cap­i­tal ap­pre­ci­a­tion.

The val­ue of the $100,000 in­vest­ments at the end of the five-year pe­ri­od was $111,544.99 and $106,877.06, re­spec­tive­ly. The GIF’s re­turn was 11.54 per cent over the five-year pe­ri­od, an­nu­alised at 2.30 per cent. The TTIF’s re­turn for the pe­ri­od was 6.87 per cent, an­nu­alised at 1.37 per cent.

On the GIF, Ed­wards said while he did not have the num­bers in front of him, he would imag­ine the re­sults of the T&T Stock Ex­change over the five-year pe­ri­od would have “ticked down.”

He al­so not­ed that unithold­ers have ac­cess to their funds the next day “and be­cause of that we have to man­age the funds so that you have the abil­i­ty to do that.”