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
A39
Sensitivity analysis was conducted to determine the effect had
US interest rates changed by 1%. With all other variables held
constant, net assets attributable to unit holders and equity would
have decreased or increased as at 31 December, 2012 and 31
December, 2011 as follows:
100 basis point increase
31 December,
2012
31 December,
2011
$’000
$’000
UTC Energy Fund
-
-
UTC European Fund
(1)
(7)
UTC Asia Pacific Fund
-
-
UTC Latin American Fund
-
-
UTC Global Bond Fund
(61)
(62)
UTC North American Fund
(231)
(1,685)
100 basis point decrease
$’000
$’000
UTC Energy Fund
-
-
UTC European Fund
1
7
UTC Asia Pacific Fund
-
-
UTC Latin American Fund
-
-
UTC Global Bond Fund
65
66
UTC North American Fund
243
1,806
Proprietary Investments
The Corporation’s proprietary interest bearing asset and liability
positions are exposed to movements in market rates of interest.
A surplus of interest bearing assets in relation to interest bearing
liabilities exposes intermediation earnings to declines in market
interest rates. Conversely, a deficit of interest bearing assets in
relation to interest bearing liabilities exposes intermediation
earnings to increases in market interest rates.
In general, the Corporation focuses on controlling the rate re-
pricing mis-match between assets and liabilities so as to maintain
a stable, consistent spread over its cost of funds. This is achieved by
maintaining a reasonably substantial variable rate asset portfolio, by
active management of the maturity profile of funding instruments
and by holding a minimum level of readily tradable assets.
29) FINANCIAL RISK MANAGEMENT
(continued)
Interest rate risk
(continued)
Unit Trust Corporation
Annual Report 2012
