Sagicor Select Funds Limited To Convert Investment Funds to Unit Trusts

  • Sagicor Select Funds Limited (SSFunds), announced on June 7, 2024, its intention to undertake a strategic reorganisation, subject to obtaining all requisite approvals.
  • The reorganisation would result in the Funds being converted into two unit trusts registered with the Financial Services Commission (FSC) and governed by the Securities Collective Investment Scheme Regulations, 2013 (the CIS Regulations). This reorganisation was discussed and approved by the Board of Directors on May 8th, 2024, and was considered to be in the best interest of the Fund’s shareholders.
  • SSFunds was incorporated on January 19, 2019, and launched two funds: SELECTF and SELECTMD. Presently, both funds are listed on the main market of the Jamaica Stock Exchange (JSE).
  • From the standpoint of the Board, the stocks have consistently traded at a relatively steep discount to their NAVs ranging from 17% to 35% and 40% to 45% for the SELECTF and the SELECTMD, respectively.
  • The Directors and Management of SSFunds believe that the steep discount at which the shares trade on the JSE is primarily due to the illiquid market and weak demand for the shares. Therefore, a shareholder who wishes to sell his shares in a Fund has to reduce his asking price to attract buyers.
  • If the Funds were unit trusts, investors would have the option to purchase or redeem units in the unit trusts at the NAV subject to possible fees and any other restrictions. The benefit to shareholders is that the units held in the new unit trusts would be priced concerning the NAV, reflecting the underlying “real value” to investors.
  • The conversion process will be undertaken as a Court-approved scheme of arrangement. However, there is no guarantee that the conversion of the investment funds to unit trusts will occur as proposed. The change is subject to shareholders voting to pass the resolution to effect conversion and the company’s successful application to the FSC for registration of the new unit trusts.
  • Sagicor Select Funds Limited operates two exchange-traded investment funds; namely the Sagicor Financial Select Fund (SELECTF) and the Sagicor Manufacturing and Distribution Select Fund (SELECTMD).

 (Source: JSE)