UTC records $73m second quarter profit

The Unit Trust Corporation (UTC) has bounced back with solid second quarter earnings after taking a hit in the first quarter from the covid19 pandemic, which battered global stock markets.

In a release Tuesday, the UTC said it posted a net income of $73 million for the three months ended June 30, and for the first six months of the year, a net income of $28 million, getting back in the black after a $45 million loss in the first quarter.

Assets under management rose to $22.9 billion in the last quarter compared with $22.6 billion in the same period a year ago.

While acknowledging that the uncertainties associated with covid19 remain elevated, the UTC attributed its second-quarter gains to proactive, research-driven investment strategies.

“We continue to be cautiously optimistic that the short-term market volatility will not impair long-term growth prospects,” said UTC chairman Gerry Brooks. “Our team is committed to continuing our strategic, professional and clinical approach to ensure our unitholders get value from every decision we make.”

“We are staying focused and will keep building on our strengths even as we navigate the challenges ahead,” said Nigel Edwards, the UTC’s executive director.

In his chairman’s report, Brooks added that the pandemic continues to define the new normal affecting investment portfolios, markets and the broader economies. “Our corporation has maintained its deliberate and strategic approach of protecting lives whilst continuing to focus on retaining and growing the wealth of our unitholders. This proactive, research-driven, thoughtful approach, notwithstanding covid19, has enabled our corporation to deliver significantly improved results in the second quarter 2020,” he said.

Health and economic uncertainties associated with covid19 continue to be elevated, he said, noting the recent resurgences of the virus in many jurisdictions and markets, which can easily reverse hard won gains from prudent investment strategy and market rebounds from first quarter lows.

Brooks said the UTC’s timely interventions to proactively protect and grow its portfolios provided an anchor for the improved second quarter performance, but noted that these results were sill $36 million short of the same period last year. “This is a stark reminder of the insidious effect of covid19 in markets and broader economies.”

Net change in fair value of investment securities was down $206 million, compared to a positive change of $440.5 million for the same period last year, reflecting related covid19 market declines as described in the first quarter report. Gross income for the half year was lower as companies reduced dividends in response to economic uncertainties, as well as lower interest income because of the declining international interest rates.