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The country’s unit trust industry, considered to having high potential and viewed as catalyst for widespread capital market, will see the launch of two new additions with its promoters and managers promising a choice of good, reliable and flexible returns via solid investments.
The SEC approved two unit trusts are branded MoneyMax and MoneyMaker. They are promoted by Guardian Acuity Asset Management Ltd., a joint venture fund management company formed by Ceylon Guardian Investment Trust Plc of Carson Cumberbatch Group., and Acuity Partners Ltd., the investment banking arm of HNB and DFCC. The new investment opportunities comprise a fixed income fund and an equity growth fund.
MoneyMax has several options depending on the requirement of the investor. MoneyMax Dhaksha is aimed at those wanting solid returns to finance children’s education, MoneyMax Dheerga for senior citizens or those saving for retirement and MoneyMax Pragathi for investors wanting money to start up a business.
The promoters said the three products were launched following research, which revealed that people were saving or investing for retirement, finance children’s education or to start up a business.
These savings plan combine a mix of equity and fixed income investments in appropriate mixes depending on the time horizon preferred by each investor. For the more sophisticated investor Guardian Acuity Asset Management Ltd. (GAAM) has on offer an investment plan named MoneyMaker which gives the choice to decide his or her own risk level with a suitable combination of equity and fixed income investments.
Further strengthening the concept of long-term investing, the savings plan allow for periodic topping up of investments on a regular basis. This, the promoters said, encourages the savings habit among investors
Flexibility to switch between funds at no extra costs allows investors the freedom to vary their equity and fixed income investment proportions to suit their risk taking ability as well as volatility in stock prices and interest rates.
GAAM’s entry is into a seemingly crowded market funds wise as there are around 24 unit trust funds. However, despite being in existence for two decades, the unit trust industry hasn’t penetrated or marketed sufficiently. The country has only around 27,000 unit trust holders whilst the fund base is Rs. 23 billion, less than 1% of the total bank deposit base.
HNB Managing Director and CEO Rajendra Theagarajah said that GAAM has taken cognisance of some of the challenges as well as opportunities. “By making the minimum investment at Rs. 1,000 with no entry fee, we have addressed the affordability aspect,” he said.
With regard to marketing it to a wider investor base, Acuity Partners Group CEO Ray Abeywardena said initially 65 branches of the HNB covering all provinces would aggressively promote the new funds in addition to GAAM’s own team of personnel.
Ceylon Guardian Investment Director Chandima Gunwardena said the portfolio of opportunities from GAAM were market structured mechanisms backed by sound and proven management expertise so as to offer good returns for discerning medium to long-term investors.
The promoters said that unit trusts were a good medium for the saving public to tap the opportunities arising from the equities market. It was revealed that over a 10-year period ended in 2011, investing in equities had provided greater returns as opposed to fixed income option though the former had demonstrated some degree of volatility.
Other advantages of investing in unit trusts are benefits of professional fund management input, diversification, liquidity and tax exemptions.
Ceylon Guardian Group has an investment portfolio of Rs. 30 billion comprising equity and private equity investments. Acuity Group provides a suite of investment banking products and services, including stock broking, primary dealership, corporate finance, venture capital and financial advisory services with an asset base of nearly Rs. 6 billion.
