Republic opens two mutual funds to Guyanese investors
By Gitanjali Singh
Guyanese can now easily access US or Trinidad dollar investment opportunities by purchasing units of two Republic Mutual Funds, distributed by Republic Bank Limited (RBL) of Trinidad and Tobago. National Bank of Industry and Commerce Limited (controlled by RBL) is now a sub-distributor for Republic Mutual Funds, offering investments in companies listed on Jamaica, Barbados and Trinidad's Stock Exchanges and in companies listed on international stock markets based on the advice of Merrill Lynch Asset Management. The Funds: Republic Global Equity Fund, an offshore US dollar mutual fund and the Republic Caribbean Equity Fund, a Trinidad and Tobago dollar fund, were launched on Tuesday night at Le Meridien Pegasus to mobilise Guyanese savings for investment abroad. (A mutual fund is an investment product that pools together savings of small and large investors and invests these in stocks, bonds or other investments. It is an alternative form of savings for Guyanese individuals and institutions to bank deposits, treasury bills and local equity investments.) The minimum initial investment for the Republic Global Equity Fund (RGEF) is US$1000 with a minimum additional subscription of $100 and the Republic Caribbean Equity Fund minimum investment is TT$2000 (TT$6 = US$1) with a minimum additional subscription of TT$200. The RGEF which was established in September 1995 and has a value of US$19.8M as of October, enjoyed an annualised rate of return of 14.3%. Subscription/redemptions are on Fridays but because the fund is a medium to long term investment outlet, there is an early redemption charge of three percent for redemption in the first year of the investment, two percent in the second year and one percent in the third year. As of 29-10-99, the issue price for units in this fund was US$15.72 whilst the redemption price was US$15.71. The top ten holdings of Republic Global Equity Fund are MCI World Com, Microsoft Corporation, Motorola Inc, Telebras Holdrs (phone company in Brazil), Cisco Systems Inc, Bank Tokyo-Mitsubishi, Tokio Fire and Marine Insurance Limited, Rhone Poulence SPA, Intel Corp and News Corp Limited. In the case of the Republic Caribbean Equity Fund, this was launched only two months ago as an RBL product. The initial subscription price was TT$20. Because of the absence of a stock exchange in Guyana, it would be difficult for the Republic Caribbean Equity Fund or RGEF to invest in Guyanese companies as information on a daily basis is crucial for such investments, Herman Boodoo, Marketing Manager of RBL Trust and Asset Management Division told Stabroek News.
Boodoo and Charles Mouttet, General Manager of RBL's Trust and Asset Management Divisions, were on hand on Tuesday night to market the two funds to local businessmen at a forum hosted by NBIC. Boodhoo and Mouttet noted that mutual funds have become one of the most sought after investments for individuals because they pool the funds of investors allowing for asset diversification and better returns. NBIC's chairman Ashton Chase in lauding the move to launch the mutual funds in Guyana lamented the fact that there is no stock exchange here. He said that a diversified asset portfolio is assured to ensure that the risks are minimised and that the launching was opening a window of opportunity for Guyanese wanting to invest overseas. Nigel Baptiste, Managing Director of NBIC, also expressed the bank's pleasure to be associated with this launch of mutual funds in Guyana. "These are very exciting times for NBIC," he said, and dubbed the launch another bold step in NBIC's arrow of achievement. The Republic Global Equity Fund is registered in the Cayman Islands which is a tax haven. RGEF, therefore, suffers no tax, except from withholding tax on dividends received. The fund pays no dividends, income is reinvested and the benefit accrues to the investor as capital gains. Citizens of the US, UK and Cayman Islands are not eligible to participate in these funds. Its advisor is Merrill Lynch, its custodian is Bank of New York and its manager is Cayman National Trust Company Limited. Its distributor is Republic Bank Limited. Neither of the funds is insured and any investment is at the risk of the investor. Republic Trust and Asset Management Division manages over US$1.1B in assets, providing services in investment management; pension plan management, estate planning, executorship, custodial trusteeship, employees savings plans and profit sharing plans.
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