Home' Trinidad and Tobago Guardian : January 18th 2015 Contents SBG4 FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt JANUARY 18 • 2015
What is a mutual fund?
A mutual fund is a form of collective invest-
ment where investors pool their money into
one fund by purchasing units in the fund. This
purchased unit should be considered an invest-
ment and is not a bank deposit where the
funds are covered by the Deposit Insurance
The pooled funds are then invested in dif-
ferent types of securities such as bonds, treas-
ury notes or stocks, guided by the investment
mandate of the fund, where they generate
returns which are then passed onto each
What are the pros and cons
of investing in a mutual fund,
as opposed to equities,
bonds, foreign exchange and
Some of the pros of investing in mutual
Lower risk through diversification:
Since mutual funds invest in a wide array
of securities there is instant diversification
with a relatively small amount of investment.
Being diversified allows the portfolio to earn
higher returns without facing equally high
Professional portfolio management:
These funds are managed by full time pro-
fessional portfolio managers who vigilantly
monitor the performance of the funds.
Improved access to the capital market:
Through the fund, individuals gain access
to securities that may not be as easily available
to them as relatively small individual investors.
Investors can easily buy and sell their units
from their mutual fund provider
Easy record keeping:
Mutual fund investors are provided with
regular statements of their holdings in each
fund vs. keeping track of their individual invest-
ments on their own.
Lower trading costs:
When individuals pool their funds, signif-
icant savings in transaction costs can be
achieved arising from fewer transactions in
Some of the cons are:
Investors should pay attention to all the fees
charged to a fund. This would include the
investment management, trustee and distri-
bution fees. While these fees are necessary,
fees reduce overall investment returns to the
investor. Investors should ensure that they
continue to get value for their money by judg-
ing funds based upon their net return.
Potential management abuses:
Investors should review the prospectuses,
financial statements and holdings reports for
the funds they wish to invest. These invest-
ments are owned by each of the investors in
the fund and they have the right to know what
comprises the fund. This disclosure will help
ensure that mutual funds adhere to their
investment mandates and remain as trans-
parent as possible.
Could I have some
background on MFATT.
When was it founded?
The Mutual Fund Association (MFATT) is
a non-profit company incorporated under the
Companies Act, 1995. The members of the
association comprise the largest operators of
mutual funds in T&T.
The association is managed by a board of
directors which meets quarterly and is com-
prised of president and chairman, Kurt Valley
of First Citizens Asset Management Ltd; the
vice-president and deputy-chairman, Baldath
Ramkissoon of Republic Bank Ltd; the treasurer,
Carolyn James of Bourse Securities Ltd, as
well as representatives from the Unit Trust
Corporation, Guardian Asset Management,
ANSA Merchant, and RBC Investment Man-
agement. The corporate secretary is Annette
What was the reason for its
The main reasons for the formation of the
Mutual Fund Association are to, firstly, promote
professionalism and exemplary practice among
members in the ethical conduct of the mutual
Secondly, MFATT would like to raise the
profile of the mutual fund industry to make
T&T the prime location and a domicile for
mutual funds and the preferred choice for the
administration of mutual fund services. This
includes heightening the profile of this industry
in local, regional and international spheres.
Thirdly, MFATT will provide a forum for
members to discuss issues on matters relating
to the mutual fund industry.
As a body we will also represent members
collectively in discussions with, or assist any
member to make any representation or rec-
ommendation to, any government, government
representative or supervisory authority which
is concerned with the mutual fund industry.
Finally MFATT will serve the general society
by providing an avenue for public comment
and feedback, promoting education on mutual
fund investments, serving as an information
resource for research, establishing reporting
standards and supporting the development of
employees of the mutual fund industry through
training, conferences and programmes.
Who are its members?
The current members of MFATT are:
• AIC Financial Group
• ANSA Merchant Bank
• Bourse Securities Ltd
• First Citizens Assets Management Ltd
• Guardian Asset Management Ltd
• RBC Investment Management (Caribbean)
• Republic Bank Ltd (RBL)
• T&T Unit Trust Corporation (UTC)
How does an organisation
like MFATT intend to help
bring greater awareness to
mutual funds as a product?
MFATT aims to increase mutual fund aware-
ness primarily through the website mfatt.org
where users can gain a basic understanding
of how mutual funds work, decipher industry
jargon, as well as access current industry sta-
tistics, along with relevant local and regional
industry news and market activities.
MFATT has also worked closely with Value
Horizon to develop the Caribbean Mutual
In our continuing effort to bring to our readers the range
of savings and investments options available to them,
the Sunday BG spoke to KURT VALLEY, president of the
Mutual Fund Association of T&T (MFATT). Valley breaks
down the concept of mutual funds and how they work to
Continued on Page 5
Links Archive January 17th 2014 January 19th 2015 Navigation Previous Page Next Page