Home' Trinidad and Tobago Guardian : October 30th 2014 Contents BG6 NEWS
BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 2014 • WEEK FIVE
The Unit Trust Corporation
(UTC) welcomes the proposed
amendments of the UTC of
T&T Act by Finance Minister
Larry Howai in the budget
presentation in September.
"The UTC has long sought to bring the
UTC Act in line with Securities Act. As a
result, we welcome the proposed amendments
to the UTC Act identified by Finance Minister
Larry Howai, in the budget presentation on
Monday, September 8," the UTC s Ian Chi-
napoo, executive director, and Gayle Daniel-
Worrell, vice president, marketing, commu-
nication and distribution channels, said in a
joint e-mailed statement to the Business
Guardian on Tuesday.
The UTC said these amendments address
operational enhancements that will allow the
UTC to better meet the evolving needs of its
unit holders in an increasingly competitive
Among the changes is the definition of
"securities" to make it consistent with the
definition of securities applicable to all market
actors as stated in the Securities Act 2012.
In addition, the definition of income allo-
cated for distribution will now exclude realised
and unrealised capital gains from the require-
ment to distribute not less than 90 per cent
of such income and, by doing so, the UTC
can remove the ambiguity and the unintended
effect of forcing the distribution of capital
from the unit schemes.
"Another proposed amendment is the
removal of the ten per cent concentration and
control investment restriction governing unit
schemes. This will now only be applicable to
equity securities and will bring the UTC Act
in line with the TTSEC s Collective Investment
Scheme (CIS) guidelines applicable to the
"Of significance is the amendment endowing
the corporation with the explicit authority to
close, reopen, suspend and cease to sell units
in or otherwise wind-up a unit scheme."
"It is also worth noting the proposal on the
removal of upper limits on unit prices other
than the First Unit Scheme, that is the TT
Dollar Growth and Income Fund, will allow
the corporation to remove the restriction in
the Act that prescribes the initial price of new
units. In this way, we can set the prices of
units based on the demands of the market."
Central Bank regulation
The statement also said the UTC welcomes
greater oversight of the financial sector and
of its financial services.
"While our management practices are world
class, we welcome greater oversight of the
financial sector, which includes the T&TUTC
and its funds. The T&TUTC works closely
and co-operatively with the Central Bank of
T&T. Both the Central Bank of T&T and the
Ministry of Finance and the Economy are rep-
resented on the T&TUTC s board of directors,
in accordance with the Unit Trust Corporation
of T&T Act of 1981."
The statement said the T&TUTC applies
international best practice in its management
of all unit holders funds and it will continue
to maintain these standards into the future.
T&TUTC s chairman Wendell Mottley said,
"The corporation takes its mandate very seri-
ously and this has allowed us to become one
of the most highly regarded financial institu-
tions in our nation."
Last November, and a day after Central
Bank Governor Jwala Rambarran said the UTC
was one of five systemically important financial
institutions (SIFIs), the failure of which has
"the potential to disrupt the smooth func-
tioning of markets and the economy," like the
collapse of Clico, did, the UTC put out a state-
ment saying it "welcomes greater oversight
of the financial services sector."
The UTC statement last November quoted
Wendy Ho Sing, deputy, inspector policy and
market conduct, Financial Institutions Super-
vision at the Central Bank, as saying: "As the
Central Bank s representative on UTC s board,
I can affirm that the UTC supports the Gov-
ernor s efforts to ensure that all of T&T s
financial institutions align with global best
practice and continues to work co-operatively
and transparently, with the Central Bank."
On the topic of future ownership of UTC,
the statement said the T&TUTC was estab-
lished by an Act of Parliament in 1982, with
the mandate to mobilise the savings of the
national community to channel them into
desirable investments and to provide persons
of modest means, the facility of owning shares.
"The establishment of the T&TUTC was
an important public policy initiative, on the
one hand, to enhance the mobilisation and
allocation of domestic financial resources, and
on the other hand, to ensure that citizens of
the country participated in the income and
capital growth of the country.
"Initial capital contributors were CBTT (50
per cent), life insurance companies (15 per
cent), commercial banks and non-financial
institutions (20 per cent) the National Insurance
Board (15 per cent). The Initial Capital Con-
tributors aggregate seed capital in the sum of
$5.0 million was invested in the Corporation s
very first mutual fund, the First Unit Scheme
(FUS), now called the Growth & Income Fund.
Since then, we went to create new funds in
order in order to meet the needs of our unit
Local equity funds
The UTC said, as part of its
strategic plan, it has focused
on ensuring that resources are
appropriately aligned to
address the needs of unit hold-
ers and position the corpora-
tion for future growth.
"Five years after their launch, the Asia Pacific
Fund, the Latin American Fund, the European
Fund, the Global Bond Fund and the Energy
Fund have not attracted many unit holders.
Instead, unit holders have increasingly sought
to invest in our local equity funds, such as
the Growth and Income Fund. The Growth
and Income Fund has over 230,000 investors,
while the discontinued funds had a combined
total of 903 investors.
"In response to unit holders preferences
and keeping with our strategic intentions to
provide value for unit holders, we are tightening
our focus on the funds that our unit holders
have embraced and which continue to grow
and are eliminating funds that our unit holders
do not find attractive. We will, however, con-
tinue to look for opportunities to innovate and
make decisions that bring value to our unit
In reply to the question as to why it no
longer has merchant banking as part of its
portfolio, the UTC said it has to remain com-
"To remain competitive in a challenging
environment, the UTC must deploy its
resources where it can maximise its returns
or where it can better meet the evolving needs
of our unit holders. Our core focus is the man-
agement and administration of our mutual
funds and bringing value to our unit holders."
The UTC said its funds continue to perform
in a competitive market.
The Growth and Income fund posted an
annualised net return to the unit holder of
4.08 per cent over the one year period, Sep-
tember 2013 to September 2014. For the three-
and five-year periods, ending September 30,
2014, the annualised net return to the unit
holder was 7.53 per cent and 5.71 per cent,
respectively. For the ten-year period, ending
September 30, 2014, the annualised net return
to the unit holder was 2.84 per cent.
The Universal Retirement Fund annualised
net return to the unit holder from September
30, 2013-September 30, 2014, was 5.72 per
The three-year and five-year annualised
net return to the unit holder were 7.96 per
cent and 7.20 per cent, respectively. The ten-
year annualised net return to the unit holder,
ending September 2014, stood at 4.53 per
The North American Fund annualised net
returns to the unit holder for September 30,
2013-September 30, 2014, was 10.63 per cent.
The annualised net return to the unit holder
for the three- and five-year periods was 11.47
per cent and 6.06 per cent, respectively. The
ten-year annualised net return to the unit
holder, ending September 2014, was 2.56 per
The average annualised yield to the unit
holder in the TT$ Income Fund for September
2013-September 2014 was 0.93 per cent.
While the average annualised yield to the unit
holder was 1.17 per cent and 1.61 per cent for
the three- and five-year period, respectively,
the ten-year period saw an average annualised
yield to the unit holder of 3.73 per cent.
For the unit holder in the US$ Income Fund,
the average annualised yield for September
2013-September 2014 was 0.82 per cent.
While the three-year and five-year average
annualised yield for the unit holder was 1.02
per cent and 1.40 per cent, respectively, the
ten-year period saw an average annualised
yield for the unit holder of 3.19 per cent.
to UTC Act email@example.com
Our core focus is the management and administration of our
mutual funds and bringing value to our unit holders.
executive director, UTC
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