Unit Trust industry collects more than Rs 1.8 billion in 2007/08

Member firms of the Unit Trust Association (UTA) of Sri Lanka had a very successful financial year in 2007/08 having launched three (3) new closed end funds. The overall collection by member companies from 585 unit holders exceeded Rs 1.8 billion, the Association said.

The three new funds namely NAMAL Amana Equity Fund, NAMAL Gilt Edge Fund 1 and Ceybank Gilt Edged Fund increased the number of funds in the unit trust industry to 17. “Out of the 17 funds, 13 funds are open end funds and four are closed end funds. These funds can be further categorized in to Balanced Funds four (4), Growth Funds four (4) , Income Funds eight (8) and one (1) Index Fund,” according to S. Jeyavarman, President of the Association.

The equity funds performed considerably well out performing both stock market indices which declined during the year. On average, the Balanced Funds appreciated 0.81% whilst the Growth Funds declined 3.2% against the All Share Price Index (ASPI) and Milanka Price Index (MPI) published by the Colombo Stock Exchange decline by 8.5% and 17.1% respectively. “These funds have provided more protection to investors than the market,” a press release said.

“The Income Fund has also been showing better results with higher dividend payouts in line with the general increase in interest rates on government treasury securities, corporate debt instruments and bank deposits. The higher level of interest rates created more opportunities for Income Funds to improve the medium term returns whist reducing the down turn risk,” Jeyavarman noted.

The association has also been engaged in a variety of programmes to increase the level of awareness about investing in Unit Trusts amongst the ordinary public. Unit Trusts are a perfect vehicle to save money to earn better returns from the Sri Lankan capital market instruments such as listed shares, government treasury bills, treasury bonds and corporate debt instruments.

The UTA members also participated in many seminars in different parts of the country. Member firms also envisage widening the existing distribution network through more sales people and distribution points to enhance sales. The UTA consists five licensed fund management companies, namely Ceylon Asset Management Co. Ltd, CT Fund Management (Pvt) Ltd, Eagle NDB Fund Management Co. Ltd, National Asset Management Ltd and The Unit Trust Management Company (Pvt) Ltd.