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Ravi
Abeysuriya |
Unit trusts for less sophisticated
Sanjeevi JAYASURIYA
Investing in Unit trusts is an ideal instrument to mobilize savings
of less sophisticated investors in the country.
The Securities and Exchange Commission of Sri Lanka (SEC) Director
Ravi Abeysuriya said the SEC 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 into the real economy. However, the industry in Sri
Lanka is yet to reach its full potential compared to other regional
developed markets where majority of retail investments are channeled to
the capital market through unit trusts, mutual funds and exchange traded
funds,” he said. The unit trust is designed for less sophisticated
investors to participate in the growth of the different 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 April 30, 2010.
|
Good response
for Tourism Fund
The IPO of the first ever
tourism sector fund, the Ceylon Tourism Fund received a good
response yesterday. Ceylon Asset Management Managing
Director Dulindra Fernando commenting on the IPO said the
response is fantastic.
“We have inquiries across
the country and the response is overwhelming. It showed an
enormous level of interest. There were inquiries from
foreigners too. The offer has Rs 60 million commitment and
confident that fund could reach Rs 500 million before three
months. This shows public confidence in the hotel and travel
sector,” he said. (SJ) |
There is a need for the unit trust companies to step out of Colombo
and reach out to the provinces to capture a wider share of investors by
broadening their distribution channels.
They need to consider financial institutions and post offices to
market and distribute unit trust funds instead of relying solely on
existing distribution structures. They also need to innovate and
introduce new products to unlock the true potential of the industry,
Abeysuriya said.
It is important to inculcate market awareness and educate investors
about the diverse investment opportunities existing in unit trust for
the growth of the industry.
The SEC has taken various measures to help develop the unit trust
industry including granting approval for the listing of the first close
ended fund and supporting a study undertaken by the Unit Trusts
Association to develop a strategic marketing plan to popularize unit
trust products in the country. “We have also taken action to frame
suitable guidelines to encourage the introduction of new funds namely
Real Estate Investment Trusts and Exchange Traded Funds.
The SEC is confident that the benefits of the stock market can
trickle down to all segments of society through unit trust funds, he
said.
As the regulator, we 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 become 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, Abeysuriya said. |
