If you’ve invested in Sagicor Select Funds, then listen up because some big changes are coming your way.

So Sagicor is restructuring its Select Funds into a unit trust to help investors extract more value.

To help you understand, let’s explain what Sagicor Select Funds actually is. The company is listed on the Main Market of the Jamaica Stock Exchange.  It’s what’s known as an Exchange Traded Fund (ETF).  An ETF is a fund that holds a collection of assets, such as stocks, and then trades on the stock exchange like an individual stock.

So for example, Sagicor Select Fund Financial, known as Select F for short, owns stocks in all the financial companies listed on the JSE.  This includes NCB, Scotia, Sagicor, etc.  So when you buy Select F, you’re buying a fund that owns stocks in all the major financial companies in Jamaica.

There’s also Select MD, which owns stocks in all the listed Manufacturing and Distribution companies, such as Seprod, Wisynco, Fontana and Derrimon.

The idea is that investors benefit from diversification and exposure to large companies on the JSE, without having to own each individual stock.  You would still get the benefits of price appreciation and dividends.

But the thing is, the price of the shares ebbs and flows with the market.  And the share prices do not always reflect the actual value of the companies, which is what is happening right now on the JSE.  A lot of Jamaican stocks are greatly undervalued.  NCB comes to mind.  It’s currently trading at just $42, which gives it a market value of $108 billion.  But NCB’s actual book value, which is the value of all of its assets, is $208 billion.  Which means technically, those shares should be worth closer to about $80.

And because NCB is a such a large company, it’s heavily weighted in Select F’s calculations, which drags the value of the entire fund down.  But it’s not just NCB.  Most of the financial stocks have been struggling, so Select F’s trading price has not been reflecting the true value of the assets it owns.

Select F is currently trading at just 46 cents, less than half of its IPO price of $1 in 2019.  But the Net Asset Value (NAV) of all the assets that Select F owns is actually 56 cents.

For Select MD, the discrepancy is even wider.  It’s currently trading at 86 cents, with a NAV of $1.25.

As Assistant VP at Sagicor Investments, Jodian Aris, explained on Taking Stock, investors haven’t been benefiting from the true value of the assets.  The move to a unit trust will instantly unlock that value for shareholders.

So Sagicor will be delisting Select Funds from the stock exchange, and converting them into a Unit Trust.

Now what is a unit trust? A unit trust is a managed fund that pools money from investors to buy diversified assets with the guidance of a fund manager.  The difference between this and an ETF is that a unit trust is NOT listed on a stock exchange, so it’s not subject to the volatility of prices on the stock market.

As Jodi said, a unit trust would allow investors to benefit from the actual value of the assets the select funds are holding.

Shareholders have already voted in favour of the change and the company is now awaiting final court and regulatory approvals.

So how will this impact shareholders?

“There’s going to be a change because currently you’d be a shareholder and under this new system, you now become a Sagicor Investments client. So there will be a process that follows once it takes effect. Because you would now become a Sagicor client, there are certain KYC documents and updates that you’d have for us to be compliant with the FSE,” she said.

“Which would then mean that there will be some things that we may requesting from shareholders,” she added.

According to Jodi-Ann, they’re hoping to have this wrapped up by Q1 of 2026.

And that’s the bottom line.