Sri Lanka’s biggest ‘growth’ fund, Ceybank Century Growth Fund with net asset over Rs. 1,200 million, recorded a strong year, growing by 37% for the year 2014 exceeding the growth in benchmark All Share Index by 10.6%. The All Share Total Return Index recorded growth of 26.3% for 2014 driven by historical low interest rates that attracted increased investor participation.
Commenting on the performance, Fund Manager Indika Rajakaruna noted the ‘Tactical asset allocation with increased exposure on growth sectors enabled the Fund to outperform the market in 2014’. He noted that the beginning of year 2014 which came with lots of uncertainty and lack of investor confidence challenged the asset allocation decisions.
However stabilisation of the interest rates at present levels improved the local investor sentiments that resulted in higher equity market activity levels during the year. Though the presidential elections and its outcome would have a temporary impact on the sentiments, Rajakaruna expects reduction of the energy prices in line with the fall in global oil prices, demand stimulating policy framework set out by the Government and continuation of reasonably lower interest rates would improve corporate earnings and the introduction of structural reforms to the economy would help to strengthen the investor sentiments on the medium term.
Ceybank Century Growth Fund is managed by the Ceybank Asset Management Ltd., one of pioneer asset management companies in Sri Lanka founded in 1991, backed by the shareholdings of Sri Lanka’s leading State-owned Bank of Ceylon, and Sri Lanka Insurance, Carson Cumberbatch PLC and Unit Trust of India. In addition to the Ceybank Century Growth fund, the company also manages four other funds catering to a wide spectrum of risk return needs of investors, with a balanced fund, a money market fund and two gilt edged funds.
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Commenting on the performance, Fund Manager Indika Rajakaruna noted the ‘Tactical asset allocation with increased exposure on growth sectors enabled the Fund to outperform the market in 2014’. He noted that the beginning of year 2014 which came with lots of uncertainty and lack of investor confidence challenged the asset allocation decisions.
However stabilisation of the interest rates at present levels improved the local investor sentiments that resulted in higher equity market activity levels during the year. Though the presidential elections and its outcome would have a temporary impact on the sentiments, Rajakaruna expects reduction of the energy prices in line with the fall in global oil prices, demand stimulating policy framework set out by the Government and continuation of reasonably lower interest rates would improve corporate earnings and the introduction of structural reforms to the economy would help to strengthen the investor sentiments on the medium term.
Rajakaruna went on to note that when investing in the equity market one may also need to take in to consideration the long term performance. “The average net return to an investor, who had invested in Ceybank Century Growth fund 10 years ago with reinvesting all the dividends would have been 20% p.a as at December 2014, much higher than the long term interest rates and inflation that prevailed during the same period.” He said.
Therefore he proposes investors to look at a unit trust as a gateway to plan for long term financial needs of any individual, be it your retirement or your child’s education.
Therefore he proposes investors to look at a unit trust as a gateway to plan for long term financial needs of any individual, be it your retirement or your child’s education.
Ceybank AML CEO Chitra Sathkumara said, “Ceybank Century which is Sri Lanka’s first equity fund, has become the largest equity unit trust fund in the country, and has given 20% p.a. return to its investors over the last 10 years. When the financial markets are changing and interest rates have fallen to single digits, the Sri Lankan public cannot remain passive in their savings habits and have to look at other avenues of investments like Unit Trusts, and begin to assume both risks and rewards in this new investment environment. Equity Unit Trusts offer higher long term returns and risks are minimised through diversification.” Sathkumara further said, “Unit Trusts are a simple, cost effective investment product and public trust is created by strong, pro-investor regulation by the SEC which encouraged to take prudent risk.”
Ceybank Century Growth Fund is managed by the Ceybank Asset Management Ltd., one of pioneer asset management companies in Sri Lanka founded in 1991, backed by the shareholdings of Sri Lanka’s leading State-owned Bank of Ceylon, and Sri Lanka Insurance, Carson Cumberbatch PLC and Unit Trust of India. In addition to the Ceybank Century Growth fund, the company also manages four other funds catering to a wide spectrum of risk return needs of investors, with a balanced fund, a money market fund and two gilt edged funds.
www.ft.lk
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