RATING DRIVERS
Supporting Factors:
- The Mutual Funds Industry is large and important to the economy of Trinidad and Tobago
- Dominant market share as the largest mutual funds provider in Trinidad and Tobago
- Investment portfolio characterized by good asset quality and healthy investment returns
- Strong risk management supported by improving operating efficiencies
- Continued good financial performance despite the challenging economic and capital market conditions
Constraining Factors:
- Existing legislation could serve to limit growth
- A large percentage of Funds Under Management are held by one age demographic and could impact long term growth.
Rating Sensitivity Factors:
Factors that may lead, individually or collectively, to an improvement in the ratings and /or outlook include:
- Improving market and economic conditions over the next 12-15 months, leading to sustained Net Investment Income growth in excess of 20%.
- Diversification of funds under management across age demographics
- Successful expansion into the Caribbean
Factors that may lead, individually or collectively, to a lowering of the ratings and /or outlook include:
- A sustained decline in equity prices and interest rates over the next 12-15 months, leading to a 20% decline in Net Investment Income
- A deterioration in the credit quality of the fixed income portfolios below investment grade.
COMPANY BACKGROUND
The Trinidad and Tobago Unit Trust Corporation (TTUTC or the Corporation) was established in 1981 by way of the Unit Trust Corporation of Trinidad and Tobago Act (the Act) and commenced operations in November 1982. Upon commencement of operations, the TTUTC introduced its First Unit Scheme (now called the Growth and Income Fund). The Corporation was established to serve two purposes: (i) to mobilize the savings of the domestic population in the Trinidad and Tobago financial system and channel these into desirable investments and (ii) to foster a wider shareholding democracy by providing persons of modest means with a facility to own shares. The initial contributors to the capital of TTUTC were the CBTT, the National Insurance Board, various local commercial banks, non-bank financial institutions and insurance companies.
Since its inception, the Corporation has evolved and expanded to become one of the largest financial services companies in Trinidad and Tobago with funds under management as at December 2021 of TT $24.9 Billion. The TTUTC now manages seven mutual funds consisting of the TTD Income Fund, the USD Income Fund, and the UTC Corporate Fund (3 fixed income funds), as well as the Growth and Income Fund and the Universal Retirement Fund (two balanced funds), the Calypso Macro Index Fund (a closed-ended equity fund), and the Global Investor Select Funds based in the Cayman Islands. The TTUTC continues to offer a range of services including, debit card services, bond processing, pension fund management and trustee services. The Corporation’s client base stood at 568,697(Individual 535,589 and Corporate 33,108) unitholders as at December 2021.
The TTUTC’s funds under management as at June 2021 represented approximately 7% of assets in the Trinidad and Tobago financial system[1]. Given its size and importance to the financial services system as a financial intermediary, in 2013, it was designated as a Systemically Important Financial Institution (SIFI). The Corporation is regulated by the Trinidad and Tobago Securities and Exchange Commission (TTSEC) and the Trinidad and Tobago Stock Exchange (TTSE). In addition, given the Corporations status as a SIFI they adhere to the applicable principles outlined by the Central Bank of Trinidad and Tobago guidelines.
[1] Central Bank of Trinidad and Tobago- Summary of Economic Indicators September 2021.
Analytical Contacts:
Sultan Mohammed
Tel: 1-868-627-8879 Ext. 240
E-mail: smohammed@caricris.com
Keith Hamlet
Tel: 1-868-627-8879 Ext. 229
E-mail: khamlet@caricris.com
Website: www.caricris.com
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