Trinidad and Tobago Unit Trust Corporation
Notes
to the Consolidated
Financial Statements
FOR THE YEAR ENDED
31 DECEMBER, 2012
Expressed in
Trinidad and Tobago dollars
A34
As at 31 December 2012 and 31 December 2011, using the S&P
500 Index, had US equity securities prices changed as a whole by
5% (with all other variables held constant), the respective net asset
values would have changed in both dollar and percentage terms
as follows:
2012
2011
$’000
%
$’000
%
UTC Energy Fund 1,656
5.6
1,540
6.1
UTC European
Fund
257
4.2
292
5.5
UTC Asia Pacific
Fund
506
4.6
484
4.5
UTC Latin
American Fund
341
5.1
353
5.3
UTC North
American Fund
5,781
1.9
859
3.8
The Global Bond Fund does not hold equity positions.
Proprietary Investments
The Corporation holds shares/units in the Collective Investment
Schemes that it has registered as overseas investment companies.
This aggregate shareholding was valued at the equivalent of
TT$260.9 million and as such the exposure to equity price risk is
proportionate to that disclosed in the preceding section.
In addition, the Corporation holds strategic positions in eight (8)
unquoted equities with a total book value equivalent to TT$73.3
million. These positions are assumed to be uncorrelated with
recognised stock exchanges and as such equity price risk is deemed
immaterial for these positions.
Interest rate risk
Collective Investment Schemes – Registered locally as
unit trusts
The Collective Investment Schemes’ holdings of listed and unlisted
debt instruments are exposed to movements in market rates of
interest. In general, rising interest rates expose the portfolios to
deterioration in net assets arising out of lower carrying values for
bonds (fair value interest rate risk). Conversely, falling interest rates
can expose the portfolios to potential diminution in earnings on
variable rate instruments (cash flow interest rate risk).
29) FINANCIAL RISK MANAGEMENT
(continued)
Equity price risk
(continued)
Unit Trust Corporation
Annual Report 2012
