Barita
There were times, not so long ago, when things in the local financial markets were much simpler than they are now. Well up to just a few years ago there were only three unit trust companies operating and about 6 or 7 schemes. At the end of 2014 there were 22 different unit trust offerings and currently there are 27.
NCB Capital Markets added two new ones this year and Barita has just launched two new ones. By the end of 2015 the field is likely to get even more crowded with a number of institutions already indicating that they will be launching new schemes, included are JMMB Securities and Stocks and Securities. Part of the reason for the mush rooming of these schemes is occasioned by the dictates of the IMF and the World Bank who considered the risk financial institutions were taking by issuing repos using government securities as the flip side of the trades as too high and could pose major problems to the financial system. The result is a change in the rules that now require smaller amounts of funds to be routed through managed schemes, where the liability is left with the investors rather than the financial institutions, as is now the case. The market has also changed, with investors looking for a greater number of opportunities to invest in.
Barita Unit Trust is the latest entity to launch new schemes, bringing their suite of schemes to 6 in April. The latest are; the Barita US$ FX Growth Portfolio which invests mainly in international equity, and the Barita JA$ Real Estate Portfolio which invests primarily in commercial and residential buildings for lease or sale.
The US$ FX Growth Portfolio is a US Dollar denominated equity portfolio with investments in foreign currency ordinary and preference shares of countries within the Commonwealth, Caricom and the United States and may extend to other sovereign governments as prescribed by the Financial Services Commission and the Bank of Jamaica. A minimum purchase of 100 units is required to open an account, the current price per unit is US$1.
Barita Property Fund invested in 138 Student Living shares
The real estate portfolio is JA$ denominated with investments in commercial or residential buildings for lease or sale and may also become financiers of real property developments and or participate in construction or financing of such structures.
Real Estate Portfolio investments must be held for a minimum of three years with a moratorium of 6 months’ notice required for encashment of the investment. At the launch, the managers stated that the fund has started off with an investment in 138 Student Living shares that are listed on the Jamaica Stock Exchange (JSE). A minimum purchase of 100 units is required to open an account and the current price is $5,000 per unit.
How the new funds will perform is left to time. What is known is the Cameron Burnett who is associated with the US dollar equity fund, has been investing in the overseas’ market for several years successfully, the fund should benefit from his experience. Hopefully, they will be able to navigate what is set to be a choppy period ahead for the US stock market, with interest rates set to go up.
Locally, real estate values should grow at an increasing pace as the government keeps the target of a balance fiscal operation firmly in sight and be committed to achieving it, which will lead to lower interest rates and higher asset values.
Barita Unit Trust is a subsidiary of Barita Investments a JSE listed stock.
