GAAM launches third fund

By Rohana Jayalal

Guardian Acuity Asset Management (GAAM) launched its third fund - Guardian Acuity Money Market Gilt Fund, last week.

GAAM is a joint venture between Acuity Partners Ltd, Hatton National Bank, DFCC Bank and Ceylon Guardian Investment Trust PLC in which Carson Cumberbatch PLC holds a 67% stake.

The third in a series of unit trust funds from GAAM, the new open-ended gilt fund will target short term Government securities with a one-year maturity period and feature a low minimum subscription of Rs. 1,000 to appeal to more investors.

Preliminary investments into the gilt fund will take the initial fund to Rs. 500 million while GAAM will adopt a daily valuation approach to the fund permitting investors the option of entering or exiting the fund without any additional fees being levied.

Assets will be invested in Treasury Bills, Treasury Bonds and Repos in the proportions of 50%, 10% and 40%.

GAAM Unit Trust Fund Manager Sumith Perera projected a yield of approximately 5.75% based on prevailing market conditions but said that the yield may be subject to change relative to anticipated movements in interest rates over the coming months. Guardian Fund Management Ltd, CEO, Ruvini Fernando said, "As people become more affluent with rising per capita income rates, they would save more and they will need new avenues to invest the savings to earn a good rate of return. As we have an aging population there is a greater demand for better rates of return as more of the country's working population invest their pension, gratuity or provident fund money."

"Sri Lanka's macro-economy, has seen a downwards structural adjustment. We are quickly approaching a single digit interest rate scenario and depositing savings in banks will no longer be enough for retirees or even for young people hoping to build a house or send their children for higher education. It is clear that over time people will look for more sophisticated investment options," she said.