Ceylon Dollar Bond Fund now open to local investors
View(s):Local investors are now eligible to invest in the Ceylon Dollar Bond Fund (CDBF) which invests in Sri Lanka Development Bonds (SLDBs), Dollar Sovereign and Bank Bonds.
All Personal Foreign Currency Account (PFCA) holders (formerly NRFC, RFC, RNNFC, SFIDA, etc) or Business Foreign Currency Account (BFCA) holders (formerly FEEA, Exporter’s Foreign Currency Accounts, etc) can now invest in the Fund, the company said in a media release.
CDBF, the only dollar denominated unit trust in Sri Lanka, is approved by the Central Bank (CB) and is licensed and regulated by the Securities and Exchange Commission of Sri Lanka (SEC). Deutsche Bank AG is the Trustee and Custodian of the fund, which is managed by Ceylon Asset Management.
The fund reported a net return of 6.95 per cent in 2016 and 5.25 per cent in 2017, while the annualised return as at February 28, 2018 was 4.34 per cent. However, due to the recent political instability, the dollar SLDBs rates now yield over 6 per cent per annum, the release said.
Previously limited to Sri Lankans living or working overseas, BOI companies and foreign investors, the fund is now open to any investor from US$1,000 upwards. The open-ended fund structure enables an easy exit whenever investors require, without being locked-in for a fixed period.
Chairman of Ceylon Asset Management, Nilu Wijedasa, commended the CB and the SEC for paving the path for Sri Lankan investors to access competitive returns available through CDBF. He added that the replacement of the country’s previous Exchange Control Act, which was succeeded with the new Foreign Exchange Act, legislation has advanced Sri Lanka’s foreign currency management systems to be on par with international standards.