WealthTrust Corporation promotes prudent investments - Chairman

Hiran H.Senewiratne

WealthTrust Corporation (Pvt) Ltd, a wealth management company is involved in correcting anomalies in Sri Lanka’s savings and investment structure, said its Chairman Ranjit Fernando.

“We are offering a service to the public especially in this turbulent time, because it is crucial to manage wealth and save our customers’ money prudently,” Fernando told the official launch.

He said that savings play a very significant role to function as a fund management company to manage customers’ funds. Private wealth management does not utilise a predetermined model to fit a client. All portfolios are custom designed for the client based on the investment guidelines and based on the income or cash flow requirements of customers, he said

Fernando said that normal banks pay interest between 12 per cent to 14 per cent, which is much below the inflation rate.

This resulted in losing value for deposits for customers. Therefore, depending on the needs, goals and risk tolerance, customized allocations within the portfolio may include equities, fixed income securities mutual funds and subsequently property funds for customers, he said.

He said that people are knowledgeable about the negative impact from inflation and savings and are tempted to invest in dubious finance companies for higher returns.

The recent scandals demonstrated that people who had invested funds were educated and well informed individuals. WealthTrust Corporation (Pvt) Limited has obtained the licence from the Securities and Exchange Commission (SEC).

In Sri Lanka low risk instruments give higher returns while high risk instruments give lower returns and unless this is corrected the capital and corporate debt markets cannot develop which in turn would impede growth in the economy, said Executive Director Mangala Boyagoda.

Fund Managers of the company would manage the portfolios for the clients whose funds will be directly invested in their names and not through the balance sheet of the company.

Sri Lanka is still a savings nation and not an investor nation and it is an opportune time to change our savings habits, shifting from the traditional passbook saving practice to investment, because investment is the driving force behind any economy, he said.

At present about Rs 1,300 billion is invested in banks while 50 per cent of them are savings accounts where interest rates are around six per cent and 20 per cent in current accounts. For Sri Lanka to develop people need to move away from being savers to investors. Therefore, people need to be educated on the rewards and risk factors on other alternative investment products, he said.

Boyagoda said that in Sri Lanka, the corporate bond market is far behind many other countries in the region because high rates on government securities make it too expensive for corporates to issues bonds and investors do not trade their corporate bonds listed on the CSE preferring to hold them till maturity thus maintaining little in the market.