While there is still sig­nif­i­cant eco­nom­ic un­cer­tain­ty glob­al­ly fol­low­ing the COVID-19 pan­dem­ic, the Unit Trust Cor­po­ra­tion (UTC), now in its 42nd year, has found a lane to suc­cess by in­vest­ing clos­er to home.

In the com­pa­ny’s an­nu­al re­port for 2023, both chair Jo-Anne Julien and ex­ec­u­tive di­rec­tor Nigel Ed­wards looked to the UTC’s re­gion­al in­vest­ment in the fis­cal year as a key step to the or­gan­i­sa­tion’s sta­bil­i­ty go­ing for­ward.

“In 2023, de­spite ini­tial con­cerns stem­ming from geopo­lit­i­cal ten­sions and in­sta­bil­i­ty, many ma­jor economies ex­pe­ri­enced mod­er­ate growth. How­ev­er, chal­lenges such as sup­ply chain dis­rup­tions and in­fla­tion­ary pres­sures per­sist­ed, damp­en­ing the over­all eco­nom­ic out­look. Cen­tral banks adopt­ed a cau­tious ap­proach, bal­anc­ing the need for ac­com­moda­tive mon­e­tary poli­cies to sup­port re­cov­ery with mea­sures to mit­i­gate in­fla­tion risks,” said Julien.

“The World Bank’s Jan­u­ary 2024 re­port on “Glob­al Eco­nom­ic Prospects” pre­dict­ed a third year of de­cel­er­a­tion for glob­al growth, from 2.6 per cent in 2023 to 2.4 per cent in 2024, cre­at­ing fresh haz­ards for the glob­al econ­o­my. The re­cent con­flict in the Mid­dle East and the on­go­ing con­flict in Ukraine have height­ened geopo­lit­i­cal ten­sions. To tack­le cli­mate change and achieve key glob­al de­vel­op­ment goals, coun­tries will need to de­liv­er sig­nif­i­cant in­creas­es in in­vest­ments.”

This, she ex­plained, prompt­ed the in­vest­ments and de­vel­op­ments in oth­er Caribbean states, par­tic­u­lar­ly with sev­er­al Cari­com coun­tries show­ing promise fol­low­ing the re­vival of the tourism sec­tor.

The re­vival of the tourism sec­tor has al­so been re­cent­ly hailed by the Guardian Hold­ing Lim­it­ed group as the key to its pos­i­tive fi­nan­cial per­for­mance in 2023.

“Clos­er to home, ex­clud­ing Guyana, which is ex­pe­ri­enc­ing a re­source boom from in­creased oil pro­duc­tion, Caribbean economies are ex­pect­ed to grow by 4.1 per cent in 2024 and 3.9 per cent in 2025, part­ly due to the on­go­ing ex­pan­sion of the tourism sec­tor. Tourism re­mained a key dri­ver of the re­gion­al eco­nom­ic per­for­mance, with ser­vice-ex­port­ing economies grow­ing at an av­er­age of 2.4 per cent, ac­cord­ing to the Caribbean De­vel­op­ment Bank (CDB). Col­lab­o­ra­tive ef­forts to strength­en re­gion­al in­te­gra­tion and co­op­er­a­tion re­main cru­cial in nav­i­gat­ing the evolv­ing eco­nom­ic land­scape and fos­ter­ing in­clu­sive growth across the Caribbean,” said Julien.

She stat­ed with this in mind the UTC ex­e­cut­ed plans to deep­en re­gion­al in­vest­ment over the fi­nan­cial year.

“A year ago, we chart­ed our course for re­gion­al ex­pan­sion, set­ting the stage for broad­en­ing our pres­ence across the re­gion. This in­clud­ed the ex­cit­ing an­nounce­ment of a joint ven­ture part­ner­ship in Ja­maica with Grace Kennedy. We launched three new mu­tu­al fund prod­ucts in March 2023 un­der the um­brel­la of GK Cap­i­tal Man­age­ment (GK Cap­i­tal), mark­ing a sig­nif­i­cant mile­stone in our jour­ney to ex­tend our reach and im­pact with­in the Caribbean.

“Fol­low­ing this, the Cor­po­ra­tion launched the UTC Glob­al Bal­anced Fund Ltd (GBFL) in St. Lu­cia, the first re­tail col­lec­tive in­vest­ment scheme ac­ces­si­ble to in­vestors through­out the East­ern Caribbean Cur­ren­cy Union (EC­CU). This ini­tia­tive rep­re­sents a piv­otal step for­ward for UTC in pro­mot­ing re­gion­al fi­nan­cial in­clu­siv­i­ty and in­vest­ment op­por­tu­ni­ties across the en­tire EC­CU,” said Julien who point­ed to the first share sale event of the GBFL in No­vem­ber as not on­ly a sig­nif­i­cant step for the UTC but a pos­si­ble dri­ver of greater re­gion­al uni­ty.

“I fond­ly re­called the words of Sir K. Dwight Ven­ner, for­mer Gov­er­nor of the EC­CB, who un­der­scored that “the so­lu­tion to our prob­lems lies in the clos­est pos­si­ble in­te­gra­tion of the Caribbean coun­tries,” said Julien, “This sen­ti­ment con­tin­ues to res­onate as we strive for a more uni­fied and pros­per­ous Caribbean re­gion. Our mis­sion is to pro­vide fi­nan­cial op­por­tu­ni­ties and cre­ate an av­enue for wealth cre­ation to as di­verse a range of peo­ple as pos­si­ble, there­by con­tribut­ing to the eco­nom­ic ad­vance­ment of the Or­gan­i­sa­tion of East­ern Caribbean States (OECS), and con­se­quent­ly, the en­tire re­gion. We feel we are now well on the way to achiev­ing this.”

Ed­wards high­light­ed the Caribbean ex­pan­sion as one of the UTC’s key suc­cess­es in his let­ter to share­hold­ers in the re­port.

“Last year, 2023, fills me with a pro­found sense of sat­is­fac­tion de­fined by growth op­por­tu­ni­ties, the spir­it of in­no­va­tion and our ex­pand­ing pres­ence in the dy­nam­ic and promis­ing Caribbean fi­nan­cial mar­ket­place” said Ed­wards in his open­ing line.

Ed­wards said apart from its de­vel­op­ments in the Caribbean the UTC’s de­ci­sions in fis­cal 2023 had al­so been a pos­i­tive with­in the lo­cal mar­ket as it emerged as one of the top stock per­form­ers for the year.

He said, “Re­mark­ably when you com­pare the dis­tri­b­u­tion paid to our unithold­ers in 2023 with the div­i­dends paid by com­pa­nies list­ed on the Trinidad and To­ba­go Stock Ex­change (TTSE), the Cor­po­ra­tion emerges as one of the top five com­pa­nies in terms of div­i­dends be­ing paid to in­vestors. As such, unithold­ers ben­e­fit­ted from a to­tal of TT$308.7 mil­lion in div­i­dend pay­outs, an in­crease of 20.5 per cent over 2022.”

This, along with the re­cent an­nounce­ment by re­gion­al rat­ings agency Cari­cris that UTC’s rat­ings were reaf­firmed had proven that the UTC had been pru­dent with its in­vest­ments.

“Our sol­id fun­da­men­tals were once again re­in­forced by ex­cel­lent rat­ings from Caribbean In­for­ma­tion and Cred­it Rat­ing Ser­vices Lim­it­ed (Cari­cris). We achieved Cari­AA Is­suer/Cor­po­rate Cred­it Rat­ings for­for­eign and lo­cal cur­ren­cy on the re­gion­al rat­ing scale and ttAA on the Trinidad and To­ba­go (T&T) na­tion­al scale, mark­ing our sixth con­sec­u­tive year of high rat­ings. This strong rat­ing per­for­mance speaks to our ro­bust ap­proach to risk man­age­ment and our ju­di­cious han­dling of val­ue-cre­at­ing op­por­tu­ni­ties and strate­gic in­vest­ment prac­tices. It is this con­sis­tent de­liv­ery of healthy in­vest­ment re­turns and qual­i­ty as­set man­age­ment that has helped to make us one of the best-per­form­ing com­pa­nies in the fi­nan­cial ser­vices sec­tor,” said Ed­wards.

He not­ed that Cari­cris main­tained a “sta­ble” out­look on the Cor­po­ra­tion’s cred­it pro­file over the next 12-15 months, cit­ing its strong risk man­age­ment prac­tices and gov­er­nance frame­work. Ed­wards said the UTC’s con­tin­ued ef­forts in tech­no­log­i­cal en­hance­ment are al­so ex­pect­ed to bol­ster our on­go­ing per­for­mance.

The UTC ex­ec­u­tive di­rec­tor how­ev­er not­ed that there were still some chal­lenges that need­ed to be ad­dressed as he ac­knowl­edged cy­ber­se­cu­ri­ty re­mained a ma­jor con­cern across the re­gion as Latin Amer­i­ca and Caribbean have be­come a hotbed for cy­ber at­tacks. On this note, the UTC has tried to em­brace oth­er as­pects of tech­nol­o­gy in the in­ter­est of the coun­try and its clients.

“We un­der­stand that pro­tect­ing your da­ta and funds is im­por­tant which is why we have fo­cused our ef­forts on en­sur­ing that we have risk-mit­i­ga­tion mea­sures and a ro­bust in­fra­struc­ture in place to re­duce the risk of cy­ber in­tru­sion. An­tic­i­pat­ing fu­ture tech­no­log­i­cal con­sid­er­a­tions, we are ac­tive­ly en­gaged in ex­plor­ing the po­ten­tial of Ar­ti­fi­cial In­tel­li­gence (AI) as it re­lates to in­vest­ment and fi­nan­cial man­age­ment,” said Ed­wards, who ex­plained that mem­bers of the UTC in­vest­ment team pre­sent­ed a col­lab­o­ra­tive re­search pa­per at the 2023 Cen­tral Bank of Trinidad and To­ba­go Re­search Re­view Sem­i­nar.

That sem­i­nar fo­cussed on the trans­for­ma­tive po­ten­tial of AI for the in­vest­ment man­age­ment sec­tor in the Eng­lish-speak­ing Caribbean.