The Ceylon Asset Management together with Deutsche Bank AG recently launched the first ever tourism sector fund, the Ceylon Tourism Fund, to capture returns from the top 10 tourism companies listed in Colombo Stock Exchange (CSE).
This is an open ended equity fund with an initial investment of Rs 200 million. The flexibility of the fund will enable it to expand up to 500 million within the next three months.
The CSE viewed the unit trust industry as a vital component of the capital market, since it is the best conduit to mobilize savings of the less sophisticated investors. “Over the years the unit trust industry has played a significant role to channel capital in to the real economy. However, the industry in Sri Lanka is yet to reach its full potential compared to other regional developed markets where the majority of retail investments are channeled to the capital market through unit trusts, mutual funds and exchange traded funds,” said Ravi Abaysuriya Director at the CSE, at a news conference to launch the new fund.
Last year in 2009, the All Share Price Index recorded a growth of 125.3 % while the Milanka Price Index reflected a growth of 135.9 % making it the second best performing market in the world in terms of index performance. This year, both indices have gained over 39 %. Furthermore, the hotels and travels sector of the CSE outperformed the market last year recording a gain of 199 % indicating the optimism that exist in this industry.
This new fund is also designed for less sophisticated investors to participate in the growth of the hotels and travel sector and to diversify their investments, he said.
In spite of the resurgence of the market, the unit trust industry has remained largely static at around 23,000 unit holders although the Net Asset Value has grown to around Rs 12.5 billion as at 30th April 2010. The present need is for the unit trust companies to reach out to the provinces and capture the wider share of investors by broadening their distribution channels. Financial institutions and post offices should be instrumental in the marketing and distribution of unit trust funds instead existing distribution structures.
The need to innovate and introduce new products to unlock the true potential of the industry is also needed, Mr Abeysuriya said.
He said as the regulator, the CSE will continue to facilitate and support the industry to explore and crystallize the vast opportunities available in the market. It is important to work collectively to ensure that the unit trust industry becomes a vehicle for the working people to build retirement savings and increase the capital productivity of the country. The unit trust industry will continue to develop to meet the evolving financial needs of the investors, Mr Abeysuriya said. |
E-mail
