With new funds, Sagicor ups its game in unit trust market
Published:Tuesday | October 30, 2018 | 12:00 AMHuntley Medley/Senior Business Writer
Sagicor Investment Jamaica will be rolling out three new US dollar denominated fixed income global funds as part of its Sigma suite of unit trust products.
The investment house is marketing the new funds as a hedge against depreciation of the Jamaican dollar and suggests that they will bring better yields than its existing suite of 12 Jamaican dollar funds and three already denominated in US dollars.
The new investment vehicles, Sigma Global Bond, Sigma Global Equity and Sigma Global Corporate hit the market tomorrow, November 1.
“These funds are currently available in JMD as a part of the current Sigma Funds portfolio, but the currency option allows investors to maximise their earning potential while countering devaluation,” says Sagicor Investment in its in-house talking points prepared for the launch.
With three offerings Sagicor Investments would cement its hold on a $263 billion market in which it is already the top player.
The new bond fund will be invested in sovereign bonds, mainly Government of Jamaica global bonds. The equity fund aims to make money mainly from equities listed on recognised global exchanges, while the corporate fund will derive returns mainly from USD global corporate and sovereign debt securities and is targeting returns above the US Treasury 10-year yield.
Sagicor Investments oversees a range of funds already invested in a mix of GOJ and other government securities, Jamaican and Caribbean stocks, real estate, short term sovereign debt, and inflation-indexed sovereign. Three of them are denominated in US dollars.
The investment company has had not responded to Financial Gleaner queries about its expectations for take-up of the new funds, and other details about the new products including timing of the offers. The pricing indicates that it is going after a wide base of investors.
The minimum investment is a low US$50 — which translates to less than $6,500 at current exchange rates, and is “available to all investors” who may “invest any maximum available”, the fund manager said.
The roll out of the new US dollar funds suggests a more aggressive stance by Sagicor in the US dollar investment market and a widening of its underlying investments to embrace global securities and debt instruments. Other investment houses have in recent times rolled out a range of USD and JMD investment products, the most recent of which was VM Wealth, which announced two new funds on Monday.
Two more fund managers joined the market recently, according to the June edition of the FSC Compass, a newsletter of Financial Services Commission, which named them as MoneyMasters Limited and Stocks & Securities Limited. Stocks & Securities is yet to launch its fund or funds.
The USD funds entering the market are indicative of the positioning by investment houses to rake in more US dollar business in a market generally regarded to be liquid with foreign exchange.
In the Bank of Jamaica standard intervention auctions in October, the Jamaican dollar made important gains, with the auction rate dropping over a two-week period from $133.40 to the US to $131.45 at the last auction on October 17, when the central bank sold another US$10 million into the market. Bids for the cash topped US$17 million.
The exchange rate on the spot market has also been trending down, and had fallen back below $129 to the greenback as of Monday.