MUTUAL FUND ASSOCIATION OF TRINIDAD AND TOBAGO - MFATT

Give the gift of a Mutual Fund this Christmas!

With Christmas fast approaching, every year we are all tasked with the responsibility of what gift to give our loved ones, and in particular, our children. While we generally gift toys or clothes, why not be a little innovative this year by giving a financial gift, one which can add long term value to your child’s life and teach them the value of money from a very tender age.

If you want to give something special to your child, gifting units in a Mutual Fund can enhance their future financial well-being. Mutual Fund Investments provide its investors with access to various asset classes with a low initial minimum investing requirement. Mutual Funds are simple to invest in and require no experience or knowledge to be successful, as they are managed by professionals.

Depending on your risk tolerance and the financial goal you set for your child, such as saving for higher education, it will determine the type of Mutual Fund you invest in.

In addition to reducing the toy clutter around the house, investing in Mutual Funds for your children during this holiday season has many other benefits.

Great Learning Opportunity: By discussing the investment you purchased for your child and the importance of letting the money grow untouched, they will improve their financial literacy and start developing an investing mindset from a very young age.
Long Investing Timelines: The earlier you start to invest, you position your child to benefit from the power of compounded growth, meaning small investments today can lead to big fortunes in the future. Consider this example: Parents typically spend an average of TT $500 on Christmas gifts per child. Investing that money each year and assuming a 5% annual return, when the child turns 18, he or she will have an investment account worth $14,066.19.

Parents can make the initial contribution to the mutual fund and subsequently, direct any monetary gifts received from grandparents and other relatives, on behalf of the child, into the fund. As the child is a minor, the mutual fund investment will be operated by the parent or legal guardian, until the child is of legal age.

As the child grows, they can also contribute from their own allowance to this fund, where they would start to understand and appreciate the meaning of saving and investing, whether it’s for a special gift or something bigger like their future education or a down payment for their first car.

So, this Christmas spread the joy of giving by investing in your child’s future. By purchasing units in a mutual fund for as little as a $100 gives the gift of financial wealth and wisdom to your child.

Article by the: Mutual Funds Association of Trinidad and Tobago

Registered Address:
Mutual Fund Association of Trinidad and Tobago
UTC Financial Centre
No. 82 Independence Square ,Port of Spain, Trinidad
Telephone: (868) 625-8648
Fax: (868) 625-5627
Website: http://mfatt.org

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As we approach our 25th anniversary of protecting investors and fostering the orderly growth and development of the local capital market, the Trinidad and Tobago Securities and Exchange Commission (“TTSEC”) remains committed to its mandate. The TTSEC is an autonomous agency which was established as a body corporate, by virtue of the Securities Industry Act of the Republic of Trinidad and Tobago, Act No. 32 of 1995 (“SIA 1995”), which was proclaimed in 1997. In December 2012, the SIA 1995 was repealed and replaced by the Securities Act, Chapter 83:02 of the Laws of the Republic of Trinidad and Tobago (“SA 2012”). This governing legislation authorises the TTSEC to regulate the securities market of Trinidad and Tobago. This week’s article provides an overview of the SA 2012 as well as the By-laws and Guidelines issued by the TTSEC in accordance with this legislation.

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Commonly known as mutual funds, CISs are investment vehicles which allow for the pooling of investor resources to create a more diversified portfolio to receive the benefits of large-scale investment opportunities. Investors effectively own portions of the overall “pool of money”, or fund, through units/shares which are proportional to their contributions. The mutual fund manager then utilises the fund to invest in securities aligned with the associated investment strategy. Investors can earn returns through distributions or capital appreciation based on the fund’s performance.

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There are several economic theories that stress that banks provide services to the economy that differ from those provided by securities markets, predicting that both the operation of banks and the functioning of securities markets have independent influences on economic development. Furthermore, it is stated that better functioning banks and securities markets exert robust, independent, and positive effects on economic activity2.

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Importance of Financial Regulation in the Securities Industry

An English poet, John Donne famously wrote that “no man is an island.” An old adage which can also speak to the interconnectedness of financial markets and how their actions impact the global economy. The global financial crisis of 2007 – 2008 (“the financial crisis”) serves as a stark reminder of the domino effect of the downturn in major financial markets on other economies. Inadequate regulation and supervision in global financial markets and banking systems are one of the main causes of the financial downfall. More than ten (10) years later, regulators worldwide continue to explore the lessons learnt from the financial crisis and have since implemented financial regulatory reforms to lessen the likelihood of the recurrence of such a colossal economic downturn. Adequate and appropriate regulation is critical to mitigate market failures. Through financial regulation, the Trinidad and Tobago Securities and Exchange Commission (“TTSEC”), with the cooperation of other local regulators, aim to mitigate systemic risk. This week’s article explores the meaning of financial sector regulation and its importance to the proper functioning of the securities market.

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