Ceylon Income Fund is top performer in 2011

Thursday, 8 December 2011 00:00 - - {{hitsCtrl.values.hits}}

The Ceylon Income Fund recorded an after-tax net return of 12.39% to emerge as the best performing fixed income fund in Sri Lanka for the financial year ending 31/03/2011.

It is also the best performing fund of all Unit Trusts in Sri Lanka during the 10 months to October 31, 2011* while being amongst the lowest in fees charged.

On 18 August 2011 Sri Lanka lifted restrictions on foreign investment into Fixed Income Unit Trusts (Gazette No. 1719/22). Now foreigners are allowed to invest freely in any Unit Trust via SIA (Securities Investment Account).

The Economic Advisor of Ceylon Asset Management Michael Preiss said: “The oversubscription of Sri Lanka’s USD 1 billion sovereign bond issue reveals strong investor interest in Sri Lanka fixed income returns, which will certainly extend to the Ceylon Income Fund.

The attractive yields of ‘Rated’ Finance companies, regulated by the Central Bank of Sri Lanka, will attract a large quantum of foreign capital via Unit Trusts due to improving risk ratings, a stable currency and healthy growth.”

“The European Central Bank (ECB) has reduced their interest rates to 1.25% to boost the struggling European Union (EU) economy as investors flee Italy and Greece. The US Treasury bill rates pay only 0.11%.

What was ‘risky’ yesterday is not risky today and vice versa. The risk in the west is rising while risk in Asia is declining.”

During the fourth Bank Directors’ Symposium held on 2 November 2011, the Central Bank Governor Ajith Nivard Cabraal said, “Sri Lanka’s licensed commercial banks should reach out to international markets to raise capital and utilize their ratings to attract more foreign funds.”

Ceylon Income Fund is a fixed income Unit Trust that invests in Corporate Debt instruments of ‘investment grade’ (rated BBB- or above).

The fund relies on corporate debt ratings by Fitch or Ram Ratings, while the maximum exposure to a single corporate is limited to 15% of the Fund value.

The open ended nature of the fund allows investors to withdraw their funds at any time without any penalties or exit fees.

The tax exempt returns attract a broad corporate and retail clientele.

The Trustee and Custodian of the fund is Deutsche Bank AG and the fund is audited by PricewaterhouseCoopers, while the fund operates under the regulatory framework of the Securities and Exchange Commission of Sri Lanka.

Ceylon Asset Management (CAM) has an 11 year track record in index fund management to offer stock market returns at minimized risk.

In addition to the Ceylon Income Fund CAM has an innovative portfolio of funds including the Ceylon IPO Fund, Ceylon Index Fund, Ceylon Tourism Fund and the Ceylon Financial Sector Fund.

(*Source: UTA performance reports. Please note that past performances are not indicative of future performances.)