By Dennise Williams, Staff Reporter
Minna Israel, left, deputy managing director, Scotiabank Jamaica, addresses Janice Robinson (right), general manager of Scotia Jamaica Investment Management Limited while Wayne Powell, senior general manager of Retail Products and Marketing and Lisa McMyn, senior product manager for Mutual Funds, Scotiabank Toronto, look on. There were participating in the Scotiabank Mutual Funds Buying Locally and Investing Globally seminar at the Jamaica Pegasus Hotel last week. - Contributed
MUTUAL FUNDS are good vehicles for capital growth, said Scotia Jamaica Investment Management Ltd. (SJIM) general manager, Janice Robinson.
The Bank of Nova Scotia Jamaica Limited (BNS) presented their Scotia Investor Forum on Mutual Funds at the Jamaica Pegasus Hotel last week. During the presentation, BNS in conjunction with its SJIM subsidiary, outlined the operation of their funds.
"A mutual fund is a pool of investable assets, contributed by unit holders to purchase a group of securities based on a common objective," Ms. Robinson said. "Each unit holder shares equally in the earnings of the underlying securities."
She said Scotiabank mutual funds offer investors the ability, based on their risk profile, to find the right asset mix.
BNS allows investors to create their own specialised mix of investments by selecting various fund types. It offers a Scotiabank US dollar money market fund; Scotia US dollar bond fund; Scotiabank US dollar growth fund; Scotiabank US dollar global growth fund; Scotiabank Canadian growth fund.
There are three basic asset classes, which are cash equivalent investments, investments that give an income stream and investments that offer growth. Here, according to BNS, are possible mixes available to investors.
PRESERVATION OF CAPITAL
Your primary objective is to protect your principal. You can only accept minimal risk that your investments might decline in value, even in the short term. You are willing to accept potentially the lowest return in exchange for the highest security. Therefore, your mix would be: 20 per cent in Scotiabank money market fund and 80 per cent in the Scotiabank US dollar bond fund.
CONSERVATION OF CAPITAL
Your primary objective is to earn a modest income while protecting your principal. You're willing to accept modest returns in exchange for greater security. You accept that the value of your portfolio will fluctuate modestly from time to time. Therefore, your mix would be 20 per cent Scotiabank Money Market Fund, 70 per cent in Scotiabank US dollar bond fund and 10 per cent in one of the Scotiabank growth funds.
INCOME AND
CONSERVATIVE GROWTH
Your primary objective is a high level of income with some growth potential. You accept that the value of your portfolio will fluctuate modestly from time to time. Your ideal mix would then be 15 per cent in the Scotiabank Money Market Fund, 55 per cent in the Scotiabank US Dollar Growth Fund and 30 per cent in one of the Scotiabank Growth funds.
BALANCED INCOME
AND GROWTH
Your primary objective is growth with some income and exposure to the three major asset classes. You accept that the value of your portfolio will fluctuate moderately from time to time. Therefore, you would choose to invest 15 per cent of your money in a Scotiabank money market fund, 40 per cent in a Scotiabank US dollar bond fund and 45 per cent in one of the Scotiabank growth funds.
MODERATE GROWTH
Your primary objective is to achieve a high level of growth with some income potential. You accept that the total value of your portfolio will fluctuate considerably from time to time. Your mix would be 10 per cent in the Scotiabank money market fund, 35 per cent in the Scotiabank US dollar fund and 55 per cent in one of the Scotiabank growth funds.
AGGRESSIVE GROWTH
Your primary objective is to achieve the maximum potential growth over the long term. You accept that the total value of your portfolio will fluctuate extremely from time to time. Therefore you would have invested 5 per cent in the Scotiabank money market fund, 15 per cent in the Scotiabank US dollar bond fund and 80 per cent in one of the growth funds.
"The secrets to successful investing are to invest early and regularly," Ms. Robinson said. "Additionally, investors should stay in the market as the stock market has never caused a long-term loss and it is premature redemption that causes long-term losses. Therefore, investors should incorporate asset allocation, international diversification and style diversification."
