EXECUTIVE DIRECTOR’S LETTER
Unit Trust Corporation
Annual Report 2012
35
In Barbados, stock market performance was
mixed. The BSE Local Index declined 184.80
points or 5.66 percent, whereas the BSE Cross
Listed Index rallied by 12.88 percent reflect-
ing an annual gain of 147.12 points. As a
result, the BSE Composite Index added 7.97
points yielding a positive return of 1.1 per-
cent for 2012. The indices ended the year at
3,082.38 (Local), 1,289.35 (Cross-Listed) and
730.04 (Composite) respectively compared
to index values of 3,267.18, 1,142.23 and
722.07 recorded at the end of 2011.
Performance Highlights
The following are some of the major highlights
of the Corporation’s 2012 financial performance:
y
y
The Corporation’s asset base grew by 4.92
percent year-over-year from TT$21.72 bil-
lion to TT$22.79 billion.
y
y
Total Funds Under Management grew
by 2.95 percent to TT$22.06 billion from
TT$21.43 billion.
y
y
The Corporation’s Retained Earnings in-
creased by 10.84 percent from TT$774.77
million to TT$858.78 million.
y
y
The mutual funds achieved a TT$1.42 bil-
lion or 7.73 percent year-over-year growth,
expanding from an aggregate fund-size of
TT$18.41 billion in 2011 to TT$19.83 bil-
lion by the end of 2012. The primary con-
tributors of this growth were net sales of
TT$904.9 million and capital appreciation
totalling TT$487.1 million.
y
y
Investment income generated by the
mutual funds rose by 17.07 percent
year-over-year from TT$702.35 million to
TT$822.24 million.
y
y
Other group income grew from
TT$40.49 million as at December 2011 to
TT$218.83 million by December 2012.
y
y
TT$314.32 million of impairments were
recognized in the Income Statement for
2012 given the underperformance of
some regional assets.
y
y
Total expenses incurred (excluding fi-
nance charges) rose by 136.07 percent
from TT$245.90 million to TT$580.51 mil-
lion during the year, due primarily to the
impairments recognized. If the effect of
these impairments is disregarded, expens-
es for 2012 actually rose by TT$20.29 mil-
lion or 8.25 percent year-over-year.
y
y
Total distributions paid to unit holders fell
28.26 percent to TT$259.95 million from
TT$362.37 million.
y
y
The management charge earned by the
Corporation from the mutual funds in-
creased by 6.14 percent to TT$308.7 million
in 2012 fromTT$290.84 million in 2011.
y
y
The customer base grew from 546,820
to 560,731 by the end of 2012, reflecting
2.54 percent growth.
y
y
The total number of registered accounts
rose by 2.56 percent to 804,162 from
784,107 in 2011.
Fund Performances
Owing to the generally favourable perfor-
mances of the global capital markets in 2012,
I am pleased to report that nine (9) of the
Corporation’s ten (10) mutual funds gener-
ated positive returns for investors. Our eq-
uity and balanced funds produced higher
returns in comparison to our fixed income
funds due to the prevailing low-interest rate
environment which characterized the global
capital markets..
TT$ Income Fund
As at December 31, 2012, the TT$ Income
Fund’s fund-size stood at TT$11.15 billion, up
5.66 percent from TT$10.56 billion a year ago.
The Fund benefited from aggregate net sales
during the year ofTT$533.67million and provid-
ed unit holders with a net return of 1.33 percent
for 2011 compared to 1.88 percent in 2010.
In addition to depressed interest rates, the lo-
cal commercial banks generally refrained from
accepting new placements of short-term de-
posits, owing to the elevated liquidity levels.
As a consequence, the Fund encountered in-
creased re-investment risk associated with its
money market component. The TT$ Income
Fund’s asset allocation as at the end of 2012
was: 45 percent bonds, 9 percent money
market securities and 46 percent cash.
Investment income grew by 22.27 percent
from TT$360.6 million to TT$440.89 million
during 2012. Net investment income totalled
TT$146.65 million, down 23.27 percent from
the 2011 figure of TT$191.11 million. The
distribution for 2012 was TT$143.85 million
compared to TT$188.31 million for 2011.
TT$2.8 million was allocated to the Fund’s
Primary Reserve during the year.
US$ Income Fund
The fund-size of the US$ Income Fund at the
end of 2012 was US$711.28 million (TT$4.52
billion), up 10.25 percent relative to its 2011
fund-size of US$645.47 million (TT$4.10
billion). The Fund benefited from aggregate
net sales during the year of US$26.25 million
(TT$166.78million) and provided unit holders
with a net return of 1.10 percent for 2012
compared to 1.69 percent in the previous
year. The lower net return arose due to the
underperformance of some regional assets in
the portfolio in addition to increased levels of
reinvestment risk and lower yields associated
with its money market component.
Total income available to the Fund more
than doubled in 2012 to US$47.98 million
(TT$304.83 million) from US$23.73 million
(TT$150.69 million) in 2011. Net investment
income fell 29.94 percent to US$9.63 million
(TT$61.18 million) compared to US$13.75
million (TT$87.33 million) in 2011. The Fund’s
2012 distribution pay-out was US$6.49 mil-
lion (TT$41.25 million), down from US$12.22
million (TT$77.56 million) in the preceding
year. An amount of US$1.2 million (TT$7.62
million) was allocated to the Fund’s Primary
Reserve in 2012, while a further US$1.94 mil-
lion (TT$12.31 million) was allocated to the
Secondary Reserve. The US$ Income Fund’s
asset allocation as at the end of 2012 was: 49
percent bonds, 28 percent money market se-
curities and 23 percent cash.
Growth & Income Fund
The fund-size of the Growth & Income Fund
