Financial Times - Despite publicity, public still unaware of value of unit trusts

Despite publicity and awareness, Sri Lankans have little knowledge of unit trusts and the usefulness of these investments, it was revealed at the recent 11th annual general meeting of the Unit Trust Association (UTA) of Sri Lanka.

Its President S. Jeyavarman said the general awareness among the public about investing in units is low and the industry lacks proper distribution and advisory channels to reach out to the public in the country though the industry has collected approximatey Rs 500 million in FY05/06. “In the coming year the industry focus would be to create awareness among investors and explore distribution channels to enhance product sale,” he told members.

Jeyavarman said unit trusts’ funds have performed exceptionally well in recent years yielding good rewards to the investors particularly in equity funds.

The industry currently has about 23,820 investors with approximately Rs.4.9 billion worth of funds under management. The UTA together with the Securities and Exchange Commission of Sri Lanka is formulating guidelines to promote close-end funds to extend the range comprising 13 open-ended funds currently marketed by the member companies. This would enable creation of capital protected equity funds and fixed maturity fixed income funds. UTA is also consulting relevant authorities to list close-end funds with long maturities thus promoting trading of units in the stock exchange while providing exit facilities to the unit investors in such funds.

With the introduction of different forms of taxes in the recent years the unit trust investment vehicles have been burdened with these taxes.

The members of the Association have brought up the implications of such taxes with relevant regulatory and fiscal authorities to resolve them on a priority basis to enable further development of the industry on the aforesaid manner and to provide different investment avenues to investors, the president said. In a press release the association said it strongly believes that the unit trust should be placed at the national policy level to enable all people in Sri Lanka to access the capital markets in a convenient and hassle free manner for them to invest as an alternate to the conventional saving instruments.

This would undoubtedly empower the investors to achieve their financial needs in the future.

For the current committee, the following were elected from its representative licensed unit trust management companies namely Ceylon Asset Management Ltd, Commercial Fund Management (Pvt) Ltd., Eagle NDB Fund Management Ltd., National Asset Management Ltd. and The Unit Trust Management Company (Pvt) Ltd:

President - S Jeyavarman, Vice President - Gehan Rajapakse, Secretary - Rachini Rajapaksa, Assistant Secretary - Chitra Sathkumara, Treasurer - Indranee Jayasinghe, Assistant Treasurer - P Asokan. Committee Members - Namal Kamalgoda, Prabodha Samarasekera, Dulindra Fernando and Ruwan Perera.