p17n63qg7jmbh1r4fin71pds1p454.pdf

Unit Trust Corporation Annual Report 2012
Dear Fellow Investors
It is my great pleasure to present to you
the Executive Director’s Report on the
Corporation’s financial outturn and the
investment performance of its mutual funds
for the year ended December 31, 2012.
eCOnOmIC RevIeW
and OutlOOk
In the 2012 financial year, global economic
performance surpassed expectations as policymakers
across the world intervened, coordinating
monetary and fiscal policies in order
to revitalize global economic growth which
has been decelerating since 2011.
Real GDP in the US rose 2.2 percent in 2012
compared to 1.8 percent in 2011. This increase
was recorded despite declining government
spending and is chiefly reflective of increased
personal consumption and investment
spending along with decelerating imports.
The US housing market showed signs of resilience
and the US Federal Reserve extended
its accommodative policy measures in a bid to
maintain low interest rates. The “debt ceiling
debate” and the looming “fiscal cliff” remain
the key legislative issues which are high on
the agenda for US policymakers as both issues
have the potential the cause serious economic
fallout if not properly managed.
Economic activity in the Euro-area contract-
ed by 0.6 percent during 2012, following an
expansion of 1.4 percent in 2011. This was
prompted by declining export growth, falling
investment levels triggered by increased
capital flight, contracting private consumption
and elevated unemployment levels.
European Central Bank actions to supply liquidity
to the region’s troubled banks have
exeCUtIVe DIreCtor’S Letter
helped to improve overall investor sentiment
towards the Euro-area notwithstanding the
weak economic fundamentals.
Emerging market economic conditions were
tempered by the Euro-area recession as
these regions depend heavily on that area’s
external demand. The Asian region still managed
to grow at a rate of 6.28 percent in 2012
compared to 7.54 percent in 2011, while Latin
America grew at 2.57 percent compared to
4.17 percent in 2011. These regions’ largest
economies, China and Brazil, grew at 7.80
percent 0.87 percent respectively in 2012.
Many Caribbean economies continued to
face challenges of elevated public debt levels,
weak external demand, and adverse terms of
trade. The Jamaican economy encountered
continued difficulties in 2012, however, in
February 2013, Jamaican authorities and the
International Monetary Fund (IMF) reached a
staff-level agreement for an Extended Fund
Facility which should provide some support
in the medium term. Barbados’ economic
growth stagnated in 2012 as the economy
remains challenged owing to the protracted
global economic weakness which significantly
impacts tourism. The Central Bank
of Trinidad & Tobago forecasts GDP growth
of 1.2 percent and 2.5 percent for 2012 and
2013 respectively. Third quarter GDP grew
by 1.5 percent year-over-year following a 3.3
percent contraction in the preceding quarter.
Crude, natural gas and petrochemical
production all deteriorated during the year
and various downstream energy projects
were postponed. notably, however, there
was increased exploratory and drilling activity
in the upstream energy sector during 2012
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