FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



Latest topics

» DIPD/HAYC/HAYL
by stocknoob Today at 6:55 pm

» GLAS will be winner with Super Gain.
by stocknoob Today at 6:20 pm

» Growing Fear
by Mr. X Today at 4:55 pm

» ???? අප්‍රේල් 16 ???? මේ දින 3 කෙටි සතියත් කොළපාටින් අවසන් වුනා
by Wickyz Today at 12:54 pm

» විජේදාසගේ... voice cut ප්‍රතිඵල
by Mr. X Today at 12:40 pm

» LDEV LDEV LDEV
by Eranga87 Today at 10:27 am

» No trader can flee from making a mistake. It’s just that you need to be careful about not repeating your mistakes.
by Mithooshan Today at 7:42 am

» Daily Foreign Transactions
by Pradeep90 Yesterday at 8:33 pm

» SWISSTEK (CEYLON) PLC (PARQ.N0000)
by Chithi Yesterday at 7:45 pm

» ROYAL CERAMICS PLC (RCL.N0000)
by Jana Yesterday at 6:14 pm

» US dollar trading lower, euro near new high
by target1 Yesterday at 1:38 pm

» LANKA ALUMINIUM INDUSTRIES PLC (LALU.N0000)
by Equity Win Yesterday at 1:23 pm

» LANKEM DEVELOPMENTS PLC (LDEV.N0000)
by Thushara Ayya Yesterday at 11:59 am

» RAIGAM WAYAMBA SALTERNS PLC (RWSL.N0000)
by Eranga87 Sun Apr 18, 2021 4:12 pm

» CIC HOLDINGS PLC (CIC.N0000)
by abey Sat Apr 17, 2021 9:07 pm

» First capital holdings CFVF.N0000
by invest thinker Sat Apr 17, 2021 4:46 pm

» Lanka Walltile PLC Investment Case
by judecroos Sat Apr 17, 2021 8:55 am

» Which is the best at current market condition ? ( At least 30% within 30 Days)
by judecroos Sat Apr 17, 2021 8:39 am

» Big opportunity in Kegalle Plantations
by EquityChamp Fri Apr 16, 2021 2:58 pm

» If you buy a stock that’s not going up in price, you won’t make any money. STOCK market for beginners
by dayandacool Fri Apr 16, 2021 11:31 am

EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Unit Trust industry

Unit Trust industry

Go down  Message [Page 1 of 1]

1Unit Trust industry Empty Unit Trust industry Sun Feb 10, 2013 4:34 am

sriranga

sriranga
Co-Admin
The post-war period has seen the Stock Market growing at a faster phase and the investment climate improving tremendously. With these improvements the number of Unit Trust Funds in operation has increased from thirteen to forty during the period of last ten years, with eight new Fund Management Companies (FMCs) entering the industry amounting to a total of thirteen FMCs in operation. The Assets under Management has increased from Rs 2.1 billion in December 2000 to Rs 30.9 billion in December 2012. In light of this massive growth, P. Asokan, President of the Unit Trust Association of Sri Lanka explains about Unit Trusts and their potential.

What is a Unit Trust?
A Unit Trust is a collective investment scheme where investors pool their monies together to establish a Fund. Investors are allocated units for their investments and they are known as unit holders of the Fund. The Fund will make investment in various asset classes and the returns from these investments are distributed to the unit holders. The FMC and the Trustee play an important role in the operation of a Unit Trust. The Securities & Exchange Commission of Sri Lanka (SEC) grants a license to the FMC to operate a Unit Trust. The FMC does the marketing and manages the investments of the Fund. The Trustee, who is a financial institution will have the custody of all assets of the Fund and will monitor that the Fund is operated as per the rules & regulations specified in the Unit Trust Code and the Trust Deed. Both the FMC and the Trustee are regulated by the SEC.

A brief history of Unit Trusts in Sri Lanka
Unit Trusts were introduced to Sri Lanka during 1991/92 where four Fund Management Companies obtained licenses from SEC to operate four funds. When it was introduced to Sri Lanka, an investment relief was granted to the investors who invested their monies in Unit Trusts during the first year of operation.

Types of Unit Trusts currently operating in Sri Lanka
Unit Trusts can be broadly classified into Open-ended Funds and Close-ended Funds. Open-ended Funds are funds where investors can enter and exit at any time they wish. There is no limitation to the number of units that can be issued by an Open-ended Fund. Close-ended Funds are funds which issue a limited number of units and have a maturity period. Investors could subscribe for the units in a Close-ended Fund only during the initial offer period and they can get their investment together with the returns earned only at maturity. In both these categories there can be different types of Unit Trusts catering to the diverse needs of the investors. They are Income Funds, Balanced Funds, Growth Funds, Index Funds, IPO Funds and Sector Funds etc.

Income Funds will confine its investments only to fixed income securities such as Treasury Bills, Treasury Bonds, Bank Deposits, Repurchase Agreements, Debentures and other Short-term Corporate Debt instruments. Within the Income Fund category there are Gilt Edged Funds, Money Market Funds, Corporate Debt Funds catering to the diverse needs of the investors. The main objective of these funds is to provide a regular return to the investor at low risk.

Balanced Funds are funds which invest in Equity Securities as well as Fixed Income Securities. The main objective of these funds is to provide a regular return and a capital appreciation in the medium to long term.

The asset mix between equity securities and fixed income securities will be decided by the Fund Manager based on the market conditions. These funds are suitable for investors who wish to take some risk in order to achieve some capital appreciation for their investments.

Growth Funds are funds which primarily invest in equity securities with a medium to long term horizon. These funds temporarily invest part of their money in Fixed Income Securities as well. The main objective of these type funds is to provide investors a capital appreciation in the medium to long term. These funds may not declare any dividends to the unit holders but investors can redeem their units when they are satisfied with the growth achieved by the Fund. These funds are ideally suitable for investors who are willing to take a higher risk for a higher growth.

Indexed Funds are funds which invest in an index of equity securities. The Fund Manager can select the equity securities and create an index and then investments are made in these securities in the same proportion each security is represented in the index. The main objective of these type funds is to replicate the performance of the selected index. These funds invest only in equity securities and are suitable for investors who are willing to take a higher risk for the performance of the index.

IPO Funds are funds which invest mainly in Initial Public Offering of shares and dispose those securities when the security starts trading in the secondary market. In the interim, until such time an IPO comes to the market, the fund may place its cash in fixed income securities and earn some interest. These funds are ideal for investors who want to benefit from the IPO market.

Sector Funds are funds which invest in the companies of a particular sector. For example a Banking Sector fund may invest in the shares of some of the selected banks and a Tourism Sector fund may invest in the shares of the selected hotels coming under the sector. These funds are ideal for investors who believe that a particular sector would do well in the market. These funds have the risk of not performing when the sector as a whole is affected due to certain adverse economic conditions. When the economic environment is conducive for a particular sector, that sector fund may perform better than the market.

How can an investor decide on which fund to invest?
First of all an investor must be very clear in his/her mind about the following:-
a) The investment objective: Do I want regular income from my investment or only growth of my investment or both?
b) The risk tolerance level: Am I prepared to take a higher risk for higher return or am I risk averse?
c) The time horizon: How long can I keep my investment? Is it short term or long term?
Once you have answered the above questions you are in a position to select a unit trust that meets your requirements.

The safety for an investor in a Unit Trust
As explained earlier every Unit Trust must have a Trustee, who is generally a financial institution. The Trustee must be an independent party. The main objective of the Trustee is to look after the interests of the investors in the Fund. The Trustee will monitor whether the FMC is managing the Unit Trust Fund in accordance with the rules & regulations stipulated in the Trust Deed and the Unit Trust Code. Further, both the Trustee and the FMC are regulated by the SEC. Therefore the investors are assured that the monies collected from them are utilized to meet the objective of the Fund. However, the investors still need to bear the market risk.

The real benefit to an investor in a Unit Trust
There are several benefits that accrue to an investor who has invested his/her funds in the Unit Trust. First of all, the investor gets the Professional Fund Management service. An ordinary investor who does not know anything about the Stock Market or the Fixed Income Securities Market reaps the benefit of the market through the Professional Fund Management skills of the FMC by investing in the Unit Trust. The Fund Managers usually take an investment decision only after carrying out rigorous research on the companies. This is really a great advantage for the investors in the Unit Trusts.

Secondly, an investor can benefit from the Diversified Investment Portfolio of the Unit Trust by investing even a small amount of money in the Unit Trust. As Unit Trusts have a large pool of funds, the investment portfolios are generally well diversified. This is an ideal opportunity for a small investor to reap the returns from a diversified investment portfolio.

Investors have the privilege of investing a regular sum of money in the Unit Trust of their choice just like depositing in a Savings Account. They can withdraw their investments anytime they wish. The returns from the investments, whether it is dividend or capital gains, are tax free in the hands of the investors.
Performance of Unit Trusts against Treasury Bills and Bank Deposits?

Equity Funds, especially the Growth Funds have performed better than Treasury Bills and Bank Deposits over a medium to long term. The graph below indicates the comparative performance of Treasury Bills, Fixed Deposits, Inflation and Unit Trusts as at December 31, 2012. If an investor had invested a sum of money in all three investments five years ago, his investment in Treasury Bills would have grown by 84%, the Fixed Deposits would have grown by 107% and the Units of the Growth Funds would have grown by 157%. Over a 10 year period the Unit Trusts have provided significantly higher return than the other two investments. In terms of real return (inflation adjusted) the Unit Trusts have provided a much higher real return in all three periods.
(The article was released by the Securities and Exchange Commission of Sri Lanka)
Unit Trust industry Ah10
http://www.nation.lk/edition/biz-news/item/15584-unit-trust-industry.html

http://sharemarket-srilanka.blogspot.co.uk/

2Unit Trust industry Empty Re: Unit Trust industry Sun Feb 10, 2013 4:50 am

rainmaker


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
The unit trust industry can only be developed if the EPF ETF decide to set up unit funds with each individual given a choice where to invest.

Right now the unit trusts invest the bulk in bonds and a few blue chip stocks. You can easily replicate their portfolio without paying fees and charges ----- nothing special!!!

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum