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JMMB Fund Managers’ Funds Under Management Up 500%

25 October 2021

JMMB Fund Managers Limited (JMMBFM) has recorded approximately 520% growth in its funds under management (FUM) in the last five years, as at August 31, 2021. The subsidiary now holds third position in the market, with over J$41.2 billion in funds under management, having outpaced NCB Capital Markets Ltd. and Barita Unit Trusts Management Ltd.

This growth has been largely driven by the client partnership approach taken by JMMB to assist clients to achieve their goals and the changes in the investment environment, shared CEO of JMMB Fund Managers, Christopher Walker. 

Over this five-year period, Jamaica’s collective investment schemes (CIS) market, which consists of unit trusts and mutual funds, has nearly doubled its funds under management moving from approximately J$146.6 billion in March 2016, and is now valued at approximately J$307 billion in funds under management, as of August of this year. During this period, there has also been a significant uptick in the number of players and offerings, from a mere 5 players managing 12 unit trusts, to now 11 fund managers, offering over 72 collective investment schemes.  

Christopher Walker, outlined the overall growth in the collective investment schemes (CIS) market, has been propelled in part by the regulatory changes made in 2015, by the Financial Services Commission (FSC), which has oversight for this portfolio. The regulatory shift resulted in a contraction of the repurchase (repo) market and set the stage for growth in the collective investment scheme market as investors sought risk-adjusted returns on their investment. With, unit trusts being considered relatively safe investments because the risk is pooled and invested in a diverse range of assets, this became a great investment alternative.

In sharing on the growth of JMMB Fund Managers’ portfolio, Walker revealed, “Although the fund growth would have been impacted by the regulatory changes, a major driving force for the significant growth in our funds has been our client partnership approach which is underpinned by goal attainment, through client education.  Client goals and how to meet their unique needs, such as wealth creation, remains a centerpiece of our client engagement process.  Adding, “In educating our clients we support them in understanding attendant risks, and the varying benefits of investing in these diversified investments solutions and the benefits of improving the overall rate on return on their respective portfolios.”  

The JMMB Fund Manager exec also attributed the longstanding and solid foundation built by JMMB in the unit trust market as another key pillar for the funds growth noting, “we offer value to our clients, backed by consistent performance and a solid research-based process that places clients’ best interest at the forefront, when selecting assets to include in our unit trust suite.”

Walker notes that the changing investment environment has also allowed investors to become savvier in seeking opportunities for greater return on their investment over the long-term. “With a low interest rate environment, collective investment schemes, like unit trust, have become more attractive in delivering value. Unit trusts have proven to provide above-average returns when compared to other assets of similar risk. Using the a typical money market fund, which is a more conservative fund, investors saw more than 2.5% annualized returns, on average, over the last 3 years, compared to a savings account that offered individuals less than 1%, over a similar period.” In addition, even with nominal capital, this investment allows small and large investors, alike, access to a wider range of assets. 

He further pointed to the growth of specific funds citing investors’ appetite as a driving force behind their performance, noting, “With increased interest in the stock market, due to the relatively higher returns that equities provide, in the last 5 years we have seen a growth of over 800% in our JMMB Income and Growth Fund.  This reflects clients’ appetite for better returns, and greater risk tolerance in pursuit of their goals.” JMMB Optimum Capital (unit trust) Fund, which consists largely of real estate and fixed income investments, has also seen a noteworthy increase in its funds under management, growing by 539% over the similar period. This is against the background of the long-term value (capital appreciation and rental/ lease income) that real estate provides.  The Optimum Capital Fund had an annualized return of 8.2%, over a three-year period, ending June 2021, against the industry average of 7.5%.  JMMB Real Value Fund, which is a ‘middle of the road’ fund that provides US dollar exposure to clients who are investing with Jamaican dollars, had the largest growth of funds under management, by over 1000%. Walker attributes this growth to the focus of investors to preserve their investments from devaluation and inflation. 

JMMB Fund Managers’ current suite of offerings includes eight unit trusts, denominated in both US and Jamaica dollars. These funds are largely focused on: real estate, equities, bonds and other fixed income instruments. 

Walker revealed that the subsidiary is also looking to increase its suite of offerings during this financial year, in a bid to offer clients increased diversity in their portfolio and exposure to a wider mix of assets, though not sharing details on the types of funds to be introduced, at this time. 
 

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