Saturday Aug 23, 2025
Saturday Aug 23, 2025
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The unit trust industry has grown 7.7%, with total Assets Under Management (AUMs) reaching Rs. 613.2 billion as of end-July 2025, up from Rs. 569.2 billion a year ago, data from the Unit Trust Association of Sri Lanka (UTASL) shows.
Unit trust funds with equity exposures continue to generate gains in 2025, while fixed income and money market funds are delivering single-digit returns that appeal to cautious investors.
The benchmark All Share Price Index (ASPI) of the Colombo Stock Exchange (CSE) had gained 23.2% during the first seven months of 2025, compared to an annual growth of 49.7% in 2024. The active S&P SL20 rose 18.5% in the seven months of 2025, down from 58.5% for the full year 2024.
Out of 84 unit trusts covered in the latest UTASL performance report, 28 are equity-related. Of these, 13 funds outperformed the ASPI benchmark, while the rest trailed it.
Among equity-focused funds, the NAMAL Growth Fund gained 31.4% in the first seven months of 2025, while the JB Vantage Value Equity Fund returned 26.4% and the Senfin Growth Fund returned 24.8%. The Astrue Alpha Fund returned 25.2% and the NDB Wealth Growth Fund gave 26.4%. The Senfin Dividend Fund returned 23.9%
Balanced funds also performed strongly, with the Senfin Consumer Staples Fund returning 35.4%, the NDB Wealth Growth & Income Fund 34.4%, and the National Equity Fund 30.2%, while the Senfin Financial Service Fund returned 26.9%. Both the CT CLSA Equity Fund and the Ceylon Financial Sector Fund returned 24.7%.
Money market funds remain the industry’s largest segment. Yields across money market funds were in the 4% to 5% range, offering predictable returns amid uncertain conditions.
Over the longer term, the five-year compound annual growth rates highlight the equity risk premium in Sri Lanka’s markets.
The ASPI grew at a compounded annual growth rate (CAGR) of 30.8% over five years.
Out of the 84 unit trust funds, only seven beat this benchmark, including the CAL Quant Equity Fund (35.2%), First Capital Equity Fund (35.3%), Astrue Alpha Fund (33.5%), JB Vantage Value Equity Fund (33%), CT CLSA Equity Fund (33%), Senfin Growth Fund (33%), and the Arpico Ataraxia Equity Income Fund (31%).
By contrast, most fixed-income and gilt-edged funds reported CAGRs between 8% and 14%, while money market funds delivered 10% to 14%.
The divergence across fund types reflects the nature of risk and return. Funds not exposed to equity can be expected to generate lower returns over the long term because they avoid the volatility that drives compounding in equity markets. Their purpose is to preserve capital, provide liquidity, and deliver predictable income, making them useful for investors with short time horizons or low risk tolerance. Equity and balanced funds, by contrast, have the potential to outperform the market but carry higher volatility.
The UTASL report can be accessed here: https://utasl.lk/wp-content/uploads/2025/08/Performance-Report-%E2%80%93-July-2025.pdf
