The Ceylon Dollar Bond Fund (CDBF) that invests in Sri Lanka dollar sovereign bonds and bank bonds said yesterday it has recorded a 9% p.a. annualised return in US dollar terms up to 17 May.
Ceylon Asset Management’s Economic Advisor and Director, Rainer Michael Preiss in Singapore said: “The CDBF has been able to enjoy Capital Gains on SL Dollar Bonds from the reducing interest rates following news of the IMF facility extended to Sri Lanka. As I forecasted in April, the high dollar interest rates on Sri Lanka will gradually decline as the economy gains momentum and gains the confidence of international investors. The Fed is unlikely to raise interest rates again in the near future. Therefore, investors can still take advantage of the current interest rate scenario and a strong US dollar.”
The tax exempted unit trust is operated out of Colombo and Singapore. The fund is open to investment exclusively for Sri Lankans living or working overseas, BOI companies and all foreign nationals and companies as well as institutional investors who can invest via Singapore or Colombo. The open-ended fund structure enables investors an easy exit whenever they please, without being locked-in for a fixed deposit. The fund has invested in dollar denominated Sovereign Bonds issued by the Government of Sri Lanka, and Dollar Bonds issued by Bank of Ceylon, National Savings Bank and DFCC Bank.
The only dollar denominated fund in Sri Lanka is managed by Ceylon Asset Management while Deutsche Bank is Trustee and Custodian of the fund. The fund has been awarded a B+ rating by Fitch Ratings that mirrors Sri Lanka’s country dollar rating. The Ceylon Dollar Bond Fund has been approved for investment by the Central Bank of Sri Lanka, while it is the first dollar denominated Unit Trust licensed by the Securities and Exchange Commission of Sri Lanka. Ceylon Asset Management is an associate company of Sri Lanka Insurance Corporation Ltd and Commercial Credit & Finance PLC.