CAM funds emerge as top-performing unit trusts in...
Ceylon Money Market Fund – 8.23% p.a. Ceylon Financial Sector Fund – 21.08%
The Ceylon Money Market Fund managed by Ceylon Asset Management (CAM) emerged as the top-performing money market fund for 2021 1Q, reporting an annualised return of 8.23 percent p.a.
Meanwhile, the Ceylon Financial Sector Fund emerged as the bestperforming stock market fund for 2021 1Q, reporting a return of 21.08 percent as at March 31, 2021, as per the data published by the Unit Trust Association of Sri Lanka.
Furthermore, the Ceylon Dollar Bond Fund, the only sovereign bond unit trust fund in Sri Lanka, reported a yearto-date (YTD) dollar return of 10.59 percent as at March 31, 2021.
CAM has engaged in asset management for over two decades and currently manages eight unit trust funds that involve both stock market and fixed income categories, including the above funds. The funds are licensed by the Securities and Exchange Commission of Sri Lanka (SEC) and Hatton National Bank (HNB) acts as the trustee and custodian for the rupeedenominated funds.
The Ceylon Money Market Fund is a fixed income fund that invests in short-term fixed income instruments of investment grade companies that offer attractive interest rates. Investors are allowed to withdraw their investments at any time, with interest that is accrued on a daily basis.
“We are pleased to note that the unit trust industry has attracted investor attention, given the low interest environment to surpass Rs.200 billion in assets under management by endmarch 2021, the highest in its history. The Ceylon Money Market Fund has maintained its top performance in the money market category until May 2021, as per the last reporting date of the industry. This fund continues to offer an attractive yield for investors to reap higher benefits, reporting a return of 8.10 percent p.a. as at June 23, 2021,” a statement from CAM stated.
CAM pioneered index management in Sri Lanka, including two sectors. The Ceylon Financial Sector Fund (CFSF) is an index fund that invests in top seven banks and three finance companies listed on the Colombo Stock Exchange (CSE). The fund tracks over 55 percent of the total market capitalisation of the banks and diversified finance companies in Sri Lanka and this sector is one of the most lucrative sectors in the country. Investors are allowed to invest and exit at any time.
“We believe investors have an opportunity to secure capital gains through the financial sector fund, due to the prevailing valuations of the industry,” the statement further stated.
CAM also manages the only dollardenominated sovereign bond fund in Sri Lanka, formally known as the Ceylon Dollar Bond Fund (CDBF), offering investors a unique opportunity to invest in Sri Lanka International Sovereign Bonds (SLISBS) traded on overseas exchanges. This fund is also licensed by the SEC and Deutsche Bank AG acts as the trustee and custodian of the fund.
The CDBF reported a YTD return of 10.59 percent in US dollars for 2021 1Q. It is currently trading at a deeply discounted unit buying price of US $ 0.8647 on June 15, 2021, in comparison to the pre-pandemic unit buying price of US $ 1.0922 on February 12, 2020 (source: Ceylon Asset Management), offering investors an opportunity for capital gains with improving Sri Lanka economic fundamentals.
CAM is an associate company of Sri Lanka Insurance Corporation, with a partnership of over 10 years.
“The index funds offer efficient risk-adjusted returns to capture the fast-improving profitability of the CSE,” noted CAM Managing Director Dulindra Fernando.