Subscriptions to the Scotia DBG Caribbean Income Fund opened in Jamaica Monday at US$3.31 per share, with a minimum required investment of US$5,000.

The fund managers say current income yields fall between 6.5 per cent and 8.0 per cent.

The mutual fund is directed at investors with a medium to long-term outlook.

Caribbean Income Fund (CIF), a US-dollar fund, was first launched in Trinidad, last year, but the product was not immediately available to Jamaican investors because it had not yet been approved by the Financial Services Commission (FSC).

According to Anya Schnoor, chief executive officer (CEO) of Scotia DBG Investments Limited, the fund's introduction has met the organisa-tion's core objectives of diversifying revenue streams.

"As an industry, we can no longer rely solely on interest margins to make our revenue targets, but we must offer products which provide opportunities for our clients to diversify their portfolios," said Schnoor.

The CIF, Scotia DBG's 45th investment offering, joins a portfolio of 36 Canadian- and US-dollar mutual fund products marketed by the firm.

Scotia has $104.4 billion under management, including its mutual fund portfolio.

Investment advisory and fund management services to CIF will be provided by Scotia DBG Fund Managers Limited (SFML), a company incorporated in Jamaica and licensed by the FSC.

Largest unit trust

SFML, which is run by General Manager Brian Frazer, already manages Scotia's unit trust assets - the fixed income DB&G Money Market Fund and the equity-based DB&G Premium Growth Fund.

"Overall, based on the combined size of both unit trust funds, J$6.3b Scotia DBG Fund Manager is the largest unit trust fund manager in Jamaica," said Scotia DBG.

Frazer is also an assistant vice-president for pensions at Scotia DBG. His team at SFML includes Lisa Dixon, senior manager for asset management, and Stephanie Shaw, investment manager.

Schnoor said, at the launch of CIF in Jamaica, that regulatory changes by the FSC - including the decision to lift the moratorium on new unit trust offerings which has just been gazetted and is expected to be implemented before yearend - were permitting Scotia DBG to "move towards fee-based income and away from intermediation."

Investors in CIF will be required to top up their initial US$5,000 investment by at least another US$1,000 over the life of their investment. Subscribers, if they choose, can increase their investment in increments of at least US$100 per month, fund managers said.

Appeal to new investors

The prospectus advises investors to seek tax advice before investing in the fund, which is incorporated under the laws of St Lucia as a public international mutual fund.

CIF invests primarily in USD. Residents of St Lucia, the United States and Canada are not permitted to buy shares.

The new fund, according to its designers is intended to appeal to those who desire income-yielding liquid investment in USD and who have a medium or long-term investment horizon.

The prospectus indicates that at least 50 per cent of the fund will be invested in USD-denominated assets, including: cash or deposits; interest-bearing securities issued or guaranteed by the Government of Jamaica or other sovereign; interest-bearing securities by sovereign states with a credit rating equal or superior to Jamaica's; fixed income securities; and short-term securities such as bills of exchange or promissory notes; and commercial paper issued by authorised bodies with credit rating equal or superior to Jamaica.

avia.collinder@gleanerjm.com