Unit Trust sound; no investments in Clico

The Unit Trust Corporation (UTC) does not have any investments in CLICO.

UTC's acting chief executive officer Eutrice Carrington gave investors that assurance Monday at the opening of the UTC's Customer Service Centre at One Woodbrook Place.

"I wish to underscore here this evening that the Corporation's mutual funds or unit schemes have no investment in CLICO," Carrington said. She added, "Since their establishment, the funds have never invested in any security or product issued by CLICO."

However she explained that the UTC funds have investments in Republic Bank and CL Financial, the parent company of CLICO.

Carrington said she wanted to tone down the public's anxiety and assure unit holders that all is well. She explained some of the key principles that have guided the UTC's decision-making process when it comes to investing funds.

"First, the UTC sees preservation of value alongside competitive returns for investors as its top priority," Carrington said. "Second, the UTC is focused on delivering consistent returns to investors on a long-term basis as opposed to volatile, even if attractive, returns on a short-term basis," she added.

The CEO explained that the organisation continued "to hold fast to these principles which are interwoven into the products and plans that we offer to the investing public."

She said, "The Corporation's formula is simple. We build the UTC service and funds around five main operating principles—namely, safety of principal, return on investment, ease of access to funds, diversification, information and disclosure...

"Adherence to the principle of spreading risk ensures that the funds under management are well diversified across assets classes, economic sectors and geography.

"Our enabling legislation prohibits us from investing more than ten per cent of the combined resources of all the funds in any one entity...The enabling legislation provides for the Minister of Finance to appoint a representative to the board."

Carrongton was emphatic that the UTC's mutual funds are safe and are "able to withstand the glare of public scrutiny. We are quite clear on our fiduciary responsibilities towards unitholders."