IT'S EASTER - a solemn and sobering season. And while we do not want to detract from the solemnity of the Lenten season, perhaps, now is the time to resurrect your finances as the Government prepares to outline how it proposes to finance the $358 billion budget.
In this issue, Sunday Business encourages you to make that all-important decision to revisit your portfolio, reassess your options and revamp your asset classes.
For the average Jamaican investor the choices available are pretty straightforward, though somewhat limited.
For the conservative investor there is the usual, traditional fixed deposits, for the moderate investor there are mutual funds, unit trusts and Repos. And, for the aggressive among us, there is the equities market - whether local or international.
Now is the time to take a second look at your investment strategies as you attempt to resurrect your investments.
Sunday Business turns to the experts to give you solid advice on how to attain wealth and, more important, how to keep it.
Mutual Funds - For those willing to take risks
Ashford W. Meikle, Staff Reporter
THE REACTION of the audience -comprised mostly of investors - to a fairly standard question asked by portfolio managers displayed the eagerness of Jamaicans to make money.
"Any conservative investors in the audience?" asked First Global Financial Services (FGFS) Safiya Burton as she addressed the gathering at FGFS's Mutual Funds and a Movie (premiering Inside Man) at the Sovereign Centre last week.
There were none among the almost 200 persons which included pensioners.
"No ... not at all," commented Ms. Burton as she went on to explain why investors should diversify their portfolios and "why it is important to not be too conservative."
Burton pointed to the different types of mutual funds:
Growth funds or stock mutual fund. Usually carry high returns. Income fund appropriate for the moderate or conservative investor. Money market fpund: Providing fast, reliable cash, they are ideal for emergencies or opportunities.
She advised the audience to demand a mutual funds prospectus from the manager since it was the investor's legal right.
"The prospectus is a brochure [which] describes the fund's objectives, history, the manager's background and also has the financial statements of the fund to show how the fund has performed. It makes you aware of the risk."
Noting "past performance is never a guarantee of future returns," Ms. Burton issued a caveat. "Mutual funds are not safe, meaning they are not insured or guaranteed in the way other instruments are. However, they have the potential to outperform a lot of the other investment options that are available out there."
And, with an inflation rate that was just under 13 per cent last year, those investors who parked their money in so-called safe instruments actually lost money after withholding taxes were deducted.
First Global offers two types of mutual funds:
GK funds which manages the GK Caribbean fixed- income fund. This has a minimum investment of US$10,000 and is invested primarily in the sovereign bonds of the English-speaking Caribbean. The fund has returned an annualised yield of almost seven per cent since its inception and, since it is registered in Cayman, no withholding tax is paid. CI funds. Ideal for the conservative to moderate investor. There are some 40 corporate class funds offered under the CI funds. The third largest investment fund in Canada, it has consistently been rated highly by indepen-dent investment researcher Morningstar. The fund has over Cdn$70 billion fee-earning assets and over 2 million clients.Later this year, First Global will launch a fund to expose investors to the regional [equity] markets in the Caribbean. According to Ms. Burton, while she was not encouraging investors to go outside the Jamaican stock market "because there are actually some very good buys right now, [but] it is important that you diversify your currency and your country risk."
