Ceybank Gilt-Edged Fund to offer better returns

by Jayampathy Jayasinghe

[email protected]

The Unitrust Management Company launched its first Ceybank Gilt-Edged Fund last week to offer a better investment opportunity to cash strapped investors in the country.

The initial public offer of Rs. 10 per unit which opened on March 10 will close tomorrow.

The redemption date has been scheduled for tomorrow.

The main feature of the Gilt-Edged Fund is that it will be invested in government securities such as Treasury Bills and Bonds minimising the risk factor and providing a regular stream of dividend income bi-annually.

Chief Executive Officer (CEO), Ceybank Unit Trust, Chithra Sathkumara said low returns on savings have prompted small-time investors to look elsewhere for better yields. With the introduction of Ceybank Gilt-Edged Fund we hope to provide investors with a better yield, he said.

He said most people put their money in savings and fixed deposits. But the problem lies with the increased cost-of-living without interest rates being raised.

He said the Unit Trust business was relatively new to the country with five management companies being granted licences by the Securities Exchange Commission.

There were 14 Unit Trust Funds in the country. “The Ceybank Unit Trust Fund was the largest Unit Trust Fund in the country with a net asset base of Rs. 2.4 billion.

Our Ceybank Century Growth Fund was the largest equity fund in the country. We have been very active in the market generating more than Rs. 1 billion by share trading, adding value to our investors and helping the capital market of Sri Lanka.

“We are confident that Sri Lankan investors would invest with Unit Trust to fulfil their dreams. We provide investors with attractive alternatives for their long term savings with returns above conventional savings deposits.

Asked why a new fund was launched especially at a time when the market was Bearish, he said this was an opportune moment for investment in government securities.

Senior Fund Manager, Rachini Rajapakse said the initial offer was opened on March 10 and will go on till tomorrow. “We have a short period of one-week and will not accept any investment thereafter.

The redemption date has been scheduled for March 17. It is a fixed time period of four years.

The monies will be invested only in treasury bills and bonds without incurring risks”, she said.

Shareholders of the Unit Trust Funds are the Bank of Ceylon, Carson Cumberbatch and Company Ltd, Sri Lanka Insurance, HSBC Investments (Hong Kong) Ltd and Unit Trust of India.

Some of the salient features of the Fund are that individuals or corporations with small or large amounts of funds tend to benefit from a four-year investment. It is also a money market instrument with returns above regular savings accounts.

There is no entry fee or an exit fee but a low management fee of 0.60 per cent per annum and a trustee fee of 0.15 per cent per annum, Bi-annual tax free dividend payment and the investment in Ceybank Gilt-Edged Fund could be made at any of the Bank of Ceylon branches islandwide.