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The time is now opportune to invest in NAMAL Optima Fund for a period upto March 2003 to receive tax-free returns," S. Jeyavarman, Chief Executive Officer of National Asset Management Ltd. (NAMAL), which manages the Fund, said.

"We would recommend prospective investors to invest before the end of February to achieve the desired tax benefits," he said.

NAMAL Optima Fund, which was launched last September, has been structured to provide tax savings to investors while limiting investments to safe and secure instruments. Investors will receive their capital and income in March 2003.

During the three-month period ended December 31, 2001, the Optima Fund recorded a tax-free return of 13.2 per cent per annum to the investor.

Interest rates have been on the decline since September 2001 in keeping with the Central Bank's low interest policy. This policy was implemented by the Central Bank by cutting the reverse repo rate six times during the year. The 12-month treasury bill, which was at 15 per cent per annum when the Fund was launched, yielded 13.74 per cent p.a. as at December 31, 2001, resulting in a drop in interest rates across all comparative investments.

The Optima Fund is a fully fixed income-based fund and interest rate movements are key to maximising returns. Official inflation numbers indicate that market interest rates should be higher than current levels for an investor to realise a real return.

The investment strategy adopted by the Optima Fund is based on the view that interest rates could move up in the medium term. It is in this context that the asset allocation has been made to maximise returns to the investor, Mr. Jeyavarman said.

As at December 31, 2001, the Fund has invested in Treasury Bills (36 per cent), Treasury Bonds (33 per cent), repurchase Agreements (25 per cent) and bank deposits (six per cent).

Many corporate and individual investors have invested in NAMAL Optima Fund with an initial amount of Rs. 853 million. "This fund is different from other schemes available in the financial market today in terms of tax advantage, he said.

NAMAL, the unit trust management company, is owned by DFCC Bank, People's Bank, Asian Development Band and Employees Trust Fund Board. 

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