Although the Unit Trust Corporation’s (UTC) Calypso Marco Index Fund saw a total comprehensive income of $36 million for the three months ended 30 June 2020, these profits were dissolved by the Total Comprehensive loss of $121 million previously reported for the three months ended 31 March 2020.
In the fund’s financial report, UTC Chairman Professor Gerry Brooks said: “Despite improvement in the second quarter, the Fund incurred a Total Comprehensive Loss of $85 million for the six months ended 30 June 2020 compared to Total Comprehensive Income of $41 million for the six months ended 30 June 2019.”
Brooks noted that in the second quarter of 2020, T&T and many countries around the world were able to slowly lift their COVID-19 restrictions and re-open their economies, leading to recoveries in both the local and global financial markets.
In spite of these market improvements the fund still took a huge hit overall for its half-year results because of the losses registered in the first quarter.
Brooks explained: “In our first quarter’s report, the Fund’s performance was primarily a result of non-cash unfavourable fair value movements of $89 million for the six months ended 30 June 2020 compared to fair value gains of $33 million for the corresponding period in 2019.”
The UTC Chairman reminded investors that the Fund continues to make distributions based on the cash income it receives, as defined in the company’s prospectus.
He noted that the Fund paid a 15 per cent increased distribution to shareholders of $0.15 per unit for the quarter ended 30 June 2019.
According to Brooks, the Fund continues to comprise high quality investments, both locally and internationally.
He added that the UTC remains optimistic that short-term price volatility, “even of the current extreme nature”, would not diminish the long-term prospects of the underlying businesses and industries reflected in the Fund’s portfolio holdings.
Brooks highlighted that the corporation’s optimism is also rooted in the way in which the Calypso (closed ended Fund) was created as a 10-year investment fund (expiring in 2025) and structured on the basis that the markets could withstand both positive and adverse cycles which are currently being experienced.
For the three months ended June 30, the UTC posted Net Income of $73 million and overall Net Income of $28 million over the first six months of the year after seeing declines related to the market turmoil in the first quarter.
This comes after it suffered a $44.5 million loss caused by the coronavirus pandemic in the first quarter of 2020.