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NAMAL Income Fund (NIF), an open-ended income fund, recorded 21.9 per cent total returns for the year ended March 2002. Investors in NIF receive half yearly dividends and have the option either to receive cash or reinvest in the fund to enable accumulation towards future needs.

As the fund invests only in fixed income generating financial instruments such as treasury bills, commercial paper and debentures, the investors are exposed to a low level of risk, S. Jeyavarman, Chief Executive Officer, National Asset Management Ltd (NAMAL) said. "In a volatile interest rate environment, it is difficult for ordinary investors to take complex decisions to maximise their income. NIF has demonstrated over a 4 1/2 year period since its launch, that the fund is safe and offers reasonable returns, taking advantage of specific situations in the economy," he added.

NIF is a long-term fund. Investors can invest whenever they want or on a regular basis to save to finance their needs for retirement, child education or other major financial needs.

NIF maximised returns in the financial year 2001/2002 by investing more in the medium and long-term corporates and government bonds. The asset allocation to corporate and government bonds comprised 77 per cent of the fund assets. "The fund enjoyed a substantial increase in its interest income from Rs. 17.9 million in the previous year to Rs. 19.6 million in the year under review. This is a growth of 9.5 per cent. The fund's efficiency also improved as measured by the income to expense ratio," said P. Samarasekera, Fund Manager at NAMAL.

"Although general treasury bill interest rates declined from over 20 per cent to 13.5 per cent during this period, the fund's overall returns improved and dividends of Rs. 1.60 per unit paid to investors is the highest so far paid by a fund.

NIF has paid Rs. 1.10, Rs. 1.17 and Rs. 1.25 per unit in the years 1998, 1999 and 2000 respectively. Its unit price at the end of March 2002 was Rs. 10.77. NAMAL manages four unit trust funds - National Equity Fund, NAMAL Growth Fund, NAMAL Income Fund and NAMAL Optima Fund. NAMAL is owned by DFCC Bank, People's Bank, Employees Trust Fund Board and Asian Development Bank.

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