Initial Public Offering : Sagicor Select Funds - Class C Shares

The main purpose of Sagicor Select Funds is to trade in securities listed on recognized exchanges. The company is a wholly owned subsidiary of Sagicor Investment Jamaica. As at the end of February 2019, the company consists of one (1) fund – The Financial Select Fund – a close ended non-diversified investment fund. The Sagicor Select Funds seeks to closely mimic select Indices of listed companies on the Jamaica Stock Exchange (JSE).

Company Overview

Sagicor Select Funds was incorporated on the 11th of January 2019 as a public company. The main purpose of Sagicor Select Funds is to trade in securities listed on recognized exchanges. The company is a wholly owned subsidiary of Sagicor Investment Jamaica. As at the end of February 2019, the company consists of one (1) fund – The Financial Select Fund – a close ended non-diversified investment fund. The Sagicor Select Funds seeks to closely mimic select Indices of listed companies on the Jamaica Stock Exchange (JSE).

Subsequent to the successful listing in July, Sagicor Select Funds has returned to the market to list its Class C shares. These shares will operate in the same manner as its Financial Index Fund (Class B share), however, will closely mimic the Manufacturing & Distribution Index.

Analyst’s Opinion

The introduction of Sagicor Select Funds has certainly helped to improve the sophistication of the Jamaican Stock Market with the addition of its listed equity fund. More importantly, this sector consists of some the Jamaica Stock Exchange (JSE) top performing stocks. However, it is important to highlight that though investors in the fund would gain exposure to a wide cross-section in the manufacturing and distribution sector, the fund does not offer investors true diversification across sectors, currency or region.

We note and highlight that the holding of certain underperforming stocks within the fund such as Sweet River Abattoir & Supplies (SRA) and Everything Fresh (EFRESH) could in the short to medium term adversely impact the performance of the fund. Nonetheless, we have a positive view of this IPO and is recommending for investors who are seeking to invest in securities that are long term whilst receiving dividend payments to participate (BUY). However, one should note that this IPO would not be ideal for investors seeking significant short-term gains. Consequently, we encourage you to seek advice from your Wealth Advisor before pursuing this opportunity.

Check out full analysis here.