Scotia Equity Fund tops at 39%

Scotia Investments Capital growth Fund tops in last 12 months.

Getting the best out of one’s investment requires regular reviews and sometimes changes to what we may consider prime holdings. A look at some of the high flying Jamaica Stock Exchange listings this year, tells the story pretty well.
The prices of many rose to exceedingly high valuations, on the back of strong buying, only to see prices fall back later with selling exceeding buying, as investors who bought low, offloaded their holdings, booking profit in the process.
That many may go on to recover losses incurred as a result of buying close to or near the top. In a number of cases, it may take quite some time to recover fully, while other opportunities to profit may go by. The Jamaica Stock Exchange share traded at $13.50 but now trades at $7 or Cargo Handlers trading at a high of $30, and is now at $16 and could fall some more with the price still seeming to be about 50 percent too high. Getting back to the top for these two will be challenging in the short term.
What then is happening to securities that move in a more mild-mannered than stocks but better than money market instruments? Unit trusts are a pooled investment vehicle that are managed by experienced persons.
Many persons only want to know that their investment grow at a reasonable pace and not so much on the rate of return, that will not be good stewardship of their resources. Investors should review their portfolio at least once per year and make changes where needed.
A close look at the Unit Trust bi weekly report that are published in the Jamaica Observer and Jamaica’s Daily Gleaner is revealing. Not all stocks are alike so it is with the pooled Unit Trust investment funds.
The performance of the Unit Trust funds vary from one to another. The equity based growth funds varied from 39 percent growth in case of Scotia Investments Premium Growth Fund, to a low of 28.47 percent for Sagicor Sigma Equity Fund for the last 12 months to date. Coming second, is Barita Investments Capital Growth with 34.55 percent. For 2017 to June 22, NCB Capital Markets equity fund delivered 29 percent for the last 12 months, but is the leading equity linked Unit Trust funds with gains of 21 percent, Scotia Investments Premium Growth Fund, is just behind, at 20.4 percent, edging out Barita Investments with 19.7 percent. JMMB Fund Managers landed 31 percent for the last 12 months and 18.9 percent since January with their Income and Growth Fund.
Sagicor and VM Unit Trust lag in the equity category, while Barita Investments FX Growth Portfolio fell 10 percent for the last 12 months and 5.7 percent since 2017 and the real estate fund, slipped 3 percent for the last 12 months and 5.7 percent for 2017 to date.
Returns on money market funds have been much more competitive with returns mostly around 5 percent annualized.

What is a Unit Trust?

Jamaica Unit Trust started the first unit trusts in Jamaica

Jamaican investors have been blessed with an array of investment opportunities right here in Jamaica, that they can make superior returns from. They just need to know where to look. An easy way, is to leave the choices up to professional managers to make the individual investment decisions.
The investment choices are many, some are quite simple to invest in while others required skills developed over time. For example the stock market may well be the market that delivers the highest returns, but investing successfully in stocks, requires knowledge about the workings of the market as well as a good assessment of the company to invest in as well as learning when to get in and out of a stock. On the other hand investing in Unit Trusts requires little knowledge of the assets the funds invest in, as the reliance should be placed on the management of these funds. In this regard the pass success over time is often a good indicator to be followed when investing in these funds.
An equity linked unit trusts are ideal for persons who want higher returns that the stock market offers without the having to do all the work in identifying the best stocks and the most opportune time to trade stocks, the same applies to fixed interest instruments.
What is a unit trust? Unit Trusts pool funds from numerous investors to invest in a variety of securities. The Trusts are governed by statutory regulations and their own trust deeds which set out the powers and limitations of the management of the funds. One major feature of unit trust is that of diversification of investments especially in the equities. This factor may reduce the growth potential of such funds but it acts as a great protection for investors. Local unit trust prices are quoted daily and are published in newspapers twice per week. The managers of these funds charge a fee for their services which is either taken out at the time of investment as well as an ongoing fee based on the size of the funds.
Upon till a few years ago, there are two main funds managed by fund managers these are equity or money market based. Fees can eat into the returns of investors especially in the case of money market funds. Recently, more funds were added, to include, real estate, foreign exchange and venture capital.
Returns on the money market funds should hover around rates paid on fixed interest securities less the fees the managers get.
When choosing funds to invest in, past performance can be a good guide but not always. Recent top performing funds could be the ones to look at first but it may be useful to look at a longer term period say the last 5 years to see how consistent management has been in delivering the returns. It is useful to determine what financial assets are in the fund at the time that investment is contemplated to see if they are appropriate.
Who are the persons behind the management decisions is the most important. An investment committee that makes decisions as opposed to an individual can make a big difference. Committees respond slowly to changes in market sentiments while individuals can move more swiftly but a committee may well protect against bad decisions. Size can make a difference in performance. A big fund is less nimble than a smaller one.