Ceybank Equity Funds distribute over Rs. 400 m in tax free dividends for 2nd consecutive year

Ceybank Asset Management Ltd., the managers for Ceybank Funds, continued to distribute high tax free dividends for a second consecutive year, paying out Rs. 417 million for investors in their equity funds, namely Ceybank Unit Trust and Ceybank Century Growth Fund recently. 

The distribution effectively would translate in to a tax free dividend of Rs. 2 per unit, totalling Rs. 383 million from Ceybank Unit Trust and Rs. 34 million from Ceybank Century Growth Fund for FY 2014/15. This distribution follows the payout of a similar amount of Rs. 417 million for the previous financial year.

Ceybank Unit Trust which began operations in 1992 is the biggest Balanced Fund in the country with a Net Asset value of Rs. 5.7 billion, The Ceybank Century Growth Fund is the country’s first Equity Fund was established in 1997, and has a Net Asset value of Rs. 1.2 billion.

Commenting on the distribution Ceybank AML Chairman Charith Kamaladasa said, “We are indeed happy to have distributed record tax free dividends to our investors for two consecutive years, despite volatile market movements.” 

He further stated, “Our Funds have outperformed the broader market, benefited by asset allocation decisions made by the Fund management team. Additionally capital gains realised by trading of shares enabled us to declare a high dividend this year too.” 

Expressing his views, Ceybank AML CEO Chitra Sathkumara stated that the current dividend of Rs. 2 per unit for both Ceybank Unit Trust and Ceybank Century Growth Fund would translate to a dividend yield of 6.9% and 3.2% respectively to its Unit Holders and an appreciation for the period of 6.03% and 13.25% respectively based on Unit offer prices as at 31 March 2014.

Sathkumara further stated that the both Ceybank Unit Trust and Ceybank Century Growth Fund have achieved commendable returns for its investors over the years. “For example the total return of an investor who had invested in Ceybank Unit Trust 10 years ago as at today would be 248% (CAGR of 13.3%) while it is 390% (17.2% CAGR) if one had invested on Ceybank Century Growth Fund. He further stated the significant Capital gains realised by the funds over the years have enabled the Funds to maintain its regular dividend policy even during the periods of poor market performance. 

“The Ceybank Unit Trust has realised Rs. 3,965 million while Ceybank Century Growth fund realised Rs. 552 million during the last 10 years as Capital Gains from the share trading.”

He further noted “With the current dividend, Ceybank Unit Trust has paid Rs.21.90 per Unit while the Ceybank Century Growth Fund which has paid Rs.17.00 per Unit cumulatively, more than the investment made by the original investor. 

“Had an investor reinvested the dividends back in the Ceybank Unit Trust since inception in 1992 his investment would have grown at CAGR of 11.5% as against All Share Price Index growth of 9.9% while if he had done the same with Ceybank Century Growth Fund since inception in 1997 his investment would have grown at CAGR of 15.0% as against 14.31 growth in the All share Price Index.”

Commenting on the outlook of the stock market, Sathkumara stated that despite 2015 being a somewhat volatile period for the stock market due to the Presidential and Parliamentary elections, “we think that the market has potential to grow with better corporate earnings being reported and the country gradually opening up as a potential investment destination. We are bullish on equities and are looking at providing our unit holders good returns in the medium to long term.”

Ceybank Asset Management Ltd. is one of the pioneer asset management companies in Sri Lanka founded in 1991 and is backed by the shareholdings of Sri Lanka’s leading State-owned Bank of Ceylon and Sri Lanka Insurance, Carsons Cumberbatch PLC and India’s pioneer Unit Trust Fund Manager, Unit Trust of India. In addition to equity unit trust funds, the company also offers products for investors in fixed income through the gilt edged and money market fund series.  The National Savings Bank is the Trustee while the Bank of Ceylon is the Custodian for all unit trust funds managed by the company.