Sagicor Select Funds Limited – Additional Information on the Structure

Posted: August 8, 2019 at 6:25 pm

Sagicor Select Funds Limited was structured with five (5) separate classes of ordinary shares as follows:

  1. The Class A ordinary shares which have been allotted to Sagicor Investments Jamaica Limited, as the Manager of the Company and its various Funds. These shares are therefore referred to as the management share class; and
  2. Class B, C, D and E ordinary shares are each designated as separate and distinct Funds whereby each Fund (share class) shall have specific assets and the attendant liabilities identified and ring-fenced specifically for that class. The Class B ordinary shares has been designated as the “Financial Select Fund”.

The Financial Select Fund shall slavishly track the JSE’s Financial Index, which is weighted by the market capitalization of the stocks that comprise that index. Therefore, the Manager of the Financial Select Fund shall not be required to do much to rebalance or manage the Financial Select Fund once the said Fund has achieved alignment with the Financial Index, which is what the IPO proceeds are to be used to achieve. Given the foregoing, the Manager shall not have much work to do to manage the Financial Select Fund going forward. Hence it is described as being “passive” or “passively managed”.

In short, the Financial Select Fund may be distinguished from some of the “typical” ETFs in that the typical ETFs tend to be actively managed and have many functionaries employed such as: an Administrator, Custodian, Sub-Custodian and a Distributor. The Financial Select Fund has no such features. It is a fund that simply tracks an index.

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