Many may have heard the good news about investing in Jamaica’s stock market, but most individual investors are probably better off investing in equities through a collective investment scheme says Otis Brae, assistant vice president for portfolio management at JN Fund Managers Ltd.
Mr Brae said mutual funds and unit trusts use the pooled savings of their investors to purchase stocks, bonds, real estate, money market instruments and other assets, he stated. Specific funds have different asset mixes, allowing asset managers to develop portfolios suitable for the level of risk their potential investors are willing to accept.
Using a single fund or a combination of two or more, you can create a solution that is tailored to meet your financial priorities and achieve your plan to build wealth. This investment access especially benefits small investors who would not normally be able to acquire certain high cost assets.
Investors also get the benefit of expert investment managers with the training to make sound judgements about portfolio mixes and the timing of purchase and sales of assets. Those who don’t have the time to conduct their own research on listed companies can also benefit from the pooled investment funds.
Typical funds include:
- Global money market funds – These funds generally invest in US dollar-denominated debt instruments and other foreign currency instruments. This low risk fund may be suitable for investors who are seeking an alternative to ordinary bank deposits or who wish to put away cash earmarked for a particular purpose in the near future.
- Local money market funds are invested in local and foreign currency debt instruments, providing essentially Jamaican dollar money market returns.
This is a low risk Fund which aims to offerring income and liquidity in a relatively safe investment environment.
- Global fixed income funds are invested in both Jamaica dollar and US dollar debt instruments, aiming achieve attractive total return through capital appreciation and income growth.This is a medium risk fund which may be suitable for investors who are seeking to achieve somewhat higher but stable income.
- Global Diversified fixed income funds are invested in both Jamaica dollar and US dollar debt and equity instruments. This is a medium to high risk Fund which aims to provide long term capital appreciation with moderate income growth.
- Global equity funds invest in local, regional and international companies. This is a high-risk Fund which aims to provide income coupled with capital gains. The investment objective of this Fund is to achieve long term capital growth and risk diversification.
To open an account, contact your Jamaican fund manager, which will have a local online contact point.