The Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the issuer/corporate credit ratings of ‘CariAA’ (foreign and local currency) on the regional rating scale, and ‘ttAA’ on the national scale to Trinidad and Tobago Unit Trust Corporation (TTUTC). 

These ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in Trinidad and the wider Caribbean, is high. CariCRIS also maintained a stable outlook on the ratings. The stable outlook is based on the high likelihood that over the next 12 to 15 months, TTUTC will experience a turnaround in profitability underpinned by increased management charge income from growth in funds under management (FUM).

Additionally, the continued focus on regional and product expansion is expected to positively impact the corporation’s income. Profitability is, however, expected to be tempered by an increase in expenses as TTUTC intends to implement new technological projects. Moreover, the corporation is expected to remain well-capitalseed with a strong liquidity position.

The ratings of TTUTC continue to reflect the importance of the mutual funds industry to the T&T economy, as well as the Corporation’s market position as the largest mutual funds provider in T&T. Additionally, TTUTC’s investment portfolio continues to be well managed, with good asset quality and healthy investment returns which continues to support the corporation’s profitability. Furthermore, TTUTC’s strong risk management practices support an overall improvement in operating efficiency and underpin the ratings. The existing legislation tempered these rating strengths, which could limit the corporation’s growth. Also constraining the rating is TTUTC’s ageing unitholder base, which could impact long-term growth.

Rating sensitivity factors

Factors that can lead to an improvement of the rating:

• Improving market and economic conditions over the next 12-15 months, leading to sustained Net Investment Income growth, resulting in ROE and ROEA of five per cent and 1.5 per cent, respectively.

• Diversification of funds under management to include a greater share of young investors.

• Successful expansion and implementation of operations into the Caribbean, leading to positive impacts on revenue.

• Improvement in the cost-to-income ratio to 55 per cent or below; sustained for two financial years.

Factors that can lead to a lowering of the rating:

• A deterioration in the credit quality of the fixed-income portfolios below investment grade.

• A 15 per cent or higher reduction in FUM sustained for thre consecutive years.

• A reduction in total investment income to average earning assets to 1.5 per cent sustained for three consecutive years.

The Trinidad and Tobago Unit Trust Corporation was established in 1981 by way of the Unit Trust Corporation of Trinidad and Tobago Act and commenced operations in November 1982.

Upon commencement of operations, TTUTC introduced its first unit scheme (now called the Growth and Income Fund). 

The corporation was established to serve two purposes: (i) to mobilise the savings of the domestic population in the Trinidad and Tobago financial system and channel these into desirable investments and (ii) to foster a wider shareholding democracy by providing persons of modest means with a facility to own shares.

The initial contributors to the capital of TTUTC were the Central Bank of Trinidad and Tobago (CBTT), the National Insurance Board (NIB), various local commercial banks, non-bank financial institutions and insurance companies.

Since its inception, the corporation has evolved and expanded to become one of the largest financial services companies in Trinidad and Tobago with funds under management as at December 2024 of TT $24.6 billion.

TTUTC now manages nine mutual funds and continues to offer a range of services, including debit card services, bond processing, pension fund management, and trustee services. The corporation’s client base stood at 535,519 unitholders as at December 2024.

TTUTC’s funds under management as at March 2024 represented approximately seven per cent of assets in the Trinidad and Tobago financial system.

Given its size and importance to the financial services system as a financial intermediary, in 2013, the corporation was designated as a systemically important financial institution (SIFI). TTUTC is regulated by the Trinidad and Tobago Securities and Exchange Commission (TTSEC), the CBTT and the Trinidad and Tobago Stock Exchange (TTSE).