Category Archives: Unit Trust

First Capital CEO panelist at 5th Annual Capital Market Conference

Mr. Dilshan Wirasekara, CEO First Capital Holdings PLC will be sharing his insights and expertise at the 5th Annual Capital Market Conference.

This year’s conference marks the 3rd consecutive year in which our CEO has been invited as a guest panelist representing the capital market industry in Sri Lanka.

The 5th Annual Capital Market (CAPM) Conference, organised by UTO EduConsult in conjunction with KPMG and Adl Capital as the Key Knowledge Partners, will be held for the fifth consecutive year on 21 February.

The event will witness senior personnel of the industry, including CEOs, Partners of Accounting and Legal firms, Investment Bankers, Realtors, Regulators et al participating in various panel discussions on the significant changes and developments taking place in the capital markets industry.    Read Full Article >

 

More Details on the Conference >

 

 

 

First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management,  retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory. 

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

 

 

About Unit Trust – Isura Sirasa TV 15th January 2017

Sewwa 15

WHAT ARE THE BENEFITS OF INVESTING IN A UNIT TRUST?

THE DIFFERENCE BETWEEN INVESTING DIRECTLY IN THE STOCK MARKET  VS  INVESTING VIA UNIT TRUST

WHAT THE DIFFERENT TYPES OF UNIT TRUST FUNDS AND WHAT ARE THE RISKS INVOLVED?

HOW CAN A NEW INVESTOR START THEIR INVESTMENTS WITH UNIT TRUST?

THE HISTORY OF UNIT TRUST FUNDS IN SRI LANKA

SETTING INVESTMENT GOALS ETC..

Watch the full episode >> 

Conversing on the significance of Unit Trust as an investment option on “Isura” a TV Show spearheaded by the Securities and Exchange Commission of Sri Lanka – Senior Manager- Dealing Securities & Margin Trading Sewwandi Kathriarachchi.

Find information on investing in Unit Trust here >>

 

 

 

 

Sri Lankan shares fall to over 8-month low; Seylan deal weighs

FIRST CAPITAL’S HEAD OF RESEARCH, DIMANTHA MATHEW, SPEAKS TO REUTERS.

Sri Lankan shares fell for a sixth straight session on Tuesday to hit its lowest in more than eight month led by financials as a Seylan Bank share deal cancellation weighed on sentiment.

Stockbrokers said the Colombo Stock Exchange cancelled the 1.3 billion rupees ($8.7 million) Seylan Bank foreign deal on the request of the broker with the consent of both buyer and seller.

Prime Minister Ranil Wickremesinghe ordered a reversal and a probe into the deal as it failed to follow proper procedure.

The Colombo stock index fell 0.45 percent to hit 6,222.33, its intraday lowest since April 8, but recovered to close 0.25 percent weaker at 6,234.75, its lowest close since Nov. 29. The bourse has fallen near 1.7 percent in six straight sessions through Tuesday.

“The market trading was quiet. We expect the turnover levels to fall further. The next supporting level is at 6,000. We expect the index to fall in thin trade,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Dealers said the cancellation of Seylan Bank has hurt the sentiment of potential foreign buyers.

Turnover stood at 537.6 million rupees ($3.61 million), less than this year’s daily average of around 744.7 million rupees.

 

Foreign investors bought a net 80.3 million rupees worth of shares on Monday, extending the year-to-date net foreign inflow to 697.5 million rupees worth of equities.

Shares in top private lender Commercial bank of Ceylon lost 1.53 percent, while Hatton National Bank fell 1.87 percent to drag down the overall index.

($1 = 148.7500 Sri Lankan rupees)

(Reporting by Shihar Aneez)

 

Make the most of your Savings!

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First Capital Money Market Fund is an open-ended fund that invests in corporate debt and government securities which mature within one year.

The fund  is a good substitute for savings accounts and short term fixed deposits. The fund gives higher tax-free returns on your investment with the flexibility of withdrawing your investment at any time.

The Unit Trusts Funds are managed by First Capital Asset Management Limited a subsidiary of First Capital Holdings PLC, a full service investment bank rated A- and listed on the Colombo Stock Exchange.

First Capital Asset Management Limited is regulated by the Securities and Exchange Commission of Sri Lanka, while the Bank of Ceylon acts as the trustee and custodian of the funds.

Unit Trust Solutions

First Capital Holdings PLC is a full-service investment bank with a 30-year history, which offers an array of investment solutions to its clients including services in capital markets advisory, fixed income, equities and wealth management.

The company’s wealth management suite serves individual and institutional investors through unit trusts, financial planning and discretionary portfolio management.

Currently, the company is focusing on promoting its unit trust products to the market, which offers a low-risk investment option. Unit trusts are well suited for both corporates and individuals, as it allows for capital to be invested and managed professionally. The unit trusts funds act as a pooling vehicle in which funds from multiple investors are accumulated, allowing for larger investment in certain instruments with negotiated terms.

First Capital unit trusts products cater to a large base of high-net-worth and institutional clientele including SME and mid-level corporates.

The funds are managed by professional fund managers, who ensure that risks are diversified over a multitude of assets, while the largest state bank, the Bank of Ceylon acts as an independent trustee. Investors are given further peace of mind through the stringent monitoring and regulatory control of the unit trust industry by the Securities Exchange Commission (SEC).

Globally, the unit trust sector asset  base exceeds that of the banking sector. According to the Central Bank of Sri Lanka the bank deposits at LKR 4.7 trillion as at year end 2014, is leaps ahead of industry assets under management LKR 133 billion. Considering the tax exemptions given to unit trusts investments and that retail investors are seeking higher-yield alternative investments away from conventional bank-deposits, the company sees potential for growth in this segment.

Striving to excel in its customer centricity, First Capital encourages potential investors to consider their risk appetite, objectives, and purpose for investing prior to getting involved, ensuring that customers choose the most fitting investment option. “We profile the client, looking at age, responsibilities and commitments, and help them understand what sort of risk they should be taking, to fulfil their goals in life,” explains CEO, Dilshan Wirasekara. The company conducts financial planning on behalf of its clients to help them assess where they stand in relation to achieving their goals.

First Capital has a range of unit trust products targeting varying investor requirements. For the passive investor, it provides a gilt-edged fund, which invests purely in government securities, while providing a money-market fund for moderate risk-takers giving a return of 7-8% per annum, giving a higher rate than short-term bank deposits.   For the more aggressive risk-takers who want high returns, the company offers an equity fund, maintained on ethical grounds.

The company’s flagship unit trust fund – First Capital Wealth Fund was the best-performing fund in its category in 2013 and 2014, and has outperformed the unit trust industry in terms of Annual Equivalent Rate (AER) for the five years ended December 2015.

First Capital even offers customised portfolio management for investors with larger funds, and provides investment advice covering many business sectors.

Wirasekara comments: “The Company differentiates itself by the ability to navigate varying market cycles in multiple asset classes. Its superior performance in unit trust is a result of the ability to identify advantageous trends coupled with exemplary risk management.”

First Capital’s asset management business is only one aspect of its total offering. “We are a fully-fledged investment bank, having many other business lines,” avers Wirasekara adding that “being a primary dealer, we have insights into the bond market and interest-rate direction.” As testimony, First Capital claims to have been the largest manager of debt issuance in the market last year, raising LKR 25 billion of debt.

The company enjoys an unparalleled advantage with its research-backed market insights and expertise, which enables its fund managers to make notable capital gains by capitalising on movement, through risk mitigation and locking-in long-term rates at high yields.

First Capital has extended its local footprint through branches in Colombo, Kandy, Matara and Kurunegala. The company is geared for its journey towards growth in unit trust investments and customer-centric wealth management.

 

Published in May 2016 on the LMD Magazine – Digest Segment on Wealth Management

First Capital Equity Fund

Equity Fund in Sri Lanka

 

First Capital Equity Fund is a collective investment scheme that invests in shares of companies listed on the Colombo Stock Exchange. They are long term investments, ideally suited for investors with a 5-10 year investment horizon in mind. Investments in listed shares have higher risk than investments in fixed income instruments and they can be expected to yield higher returns. You can enjoy tax-free income and loan facilities against your investment fund.

The Unit Trusts Funds are managed by First Capital Asset Management Limited a subsidiary of First Capital Holdings PLC, a full service investment bank rated A- and listed on the Colombo Stock Exchange.

First Capital Asset Management Limited is regulated by the Securities and Exchange Commission of Sri Lanka, while the Bank of Ceylon acts as the trustee and custodian of the funds.

Investing in Unit Trusts: What You Need To Know

Navigating diverse investment tools can be perplexing for the average investor. Investor education is crucial as knowledgeable and empowered investors contribute towards a vibrant market. Unit trusts are one of many investment options available to investors. The following explores the mechanisms and types of unit trusts in the Sri Lankan market.

Understanding Unit Trusts

Think of a unit trust as a pooling vehicle, where you gather relatively small investments from a large number of investors to make one large fund. This pool of funds is then invested in different financial instruments. The income earned from these investments is shared by the respective unit holders in proportion to the number of units owned.

A unit trust and portfolio of investments is typically overseen and managed by a professional Fund Management Company while an independent trustee maintains custody over all the assets. The minimum amount for investing in a unit trust can be as low as Rs. 1,000 depending on the Fund.

How Unit Trusts Differ From Other Investment Tools

The biggest advantage that unit trusts offer is the diversification to a portfolio of investments, which an individual without a large base of savings will otherwise not be able to obtain on his own. A diversified portfolio has investments in a number of companies, thereby reducing risk while enhancing returns. Because of a large fund base, the asset manager will also be able to negotiate better rates, getting a higher return on his asset pool while bringing in economies of scale.

The management expertise and knowledge of the asset manager is also an added benefit of a unit trust, making it less time-intensive for the investor. An experienced fund manager will be more aware of interest rate movements and know how to minimize risk, generating higher risk adjusted returns over the long term.

The Role of Trustees and Regulators

When investing in a unit trust, investors are assured of the active involvement of regulatory bodies and a high level of transparency. An independent entity is appointed as trustee and maintains custody of the Fund’s assets, representing the interests of the investors. Moreover, the trustee monitors transactions carried out by the Fund on a daily basis. Financial statements are circulated regularly to investors which provide details of the Fund’s progress and statement of financial performance. The Securities and Exchange Commission of Sri Lanka (SEC) licenses and regulates unit trust funds, conducts periodic on-site audits, and rigorously examines the qualifications of fund managers.

Types of Unit Trusts

There are different Unit Trusts, each addressing a specific investment requirement. No single Unit Trust will cater to the requirements of all investors. It is the Asset Manager’s role to match a specific fund to an investor’s requirements. The main types of Unit Trusts in Sri Lanka are Income Funds, Money Market Funds, Gilt Edged Funds, and Equity Funds.

Income Funds invest in income generating investments such as government securities, debentures, commercial papers, structured debt instruments, and even bank and finance company fixed deposits. These funds are suitable for medium to long term investments, for income generation and capital growth. A well-managed Income Fund will generate higher returns over the long term than equivalent bank or finance company deposits.

Money Market Funds make similar investments to Income Funds, except that all investments mature within one year. As a result, the return on Money Market Funds is lower but its attraction is its high level of liquidity. They are good substitutes for savings accounts as your investment can be withdrawn at any time.

Gilt Edged Funds restrict investments to securities issued by the Government of Sri Lanka. Government Securities are widely considered risk-free instruments and are suitable for investors wishing to eliminate all default risks associated with an institution. They are the safest investments in terms of payment of underlying principal and interest when due. However it must be noted that Government Securities carry ‘interest rate risk’ and the value of instruments rise or decline based on interest rate changes.

Equity Funds invest primarily in shares listed on the Colombo Stock Exchange. Investments in listed shares have higher risks than investments in fixed income instruments and they can be expected to yield higher returns. They are long-term investments – ideally an investor should have a 5-10 year investment horizon in mind when investing in an Equity Fund.

Sri Lanka’s Unit Trust Industry

Unit Trusts were introduced to Sri Lanka in 1991 to provide an alternate investment for people to benefit from the capital market. The SEC as the licensing authority has the power to permit a Fund Management Company (Fund Manager) to launch a unit trust under the SEC Act.

There are currently 14 Unit Trust Management Companies in Sri Lanka operating a total of 75 funds as at 31 January 2015, while assets under management in the entire market have grown to Rs.126Bn as at 31 December 2014. The Unit Trusts Association represents the industry to the SEC, the Government and CBSL.

It also strives to maintain high professional and ethical standards in the Unit Trust Industry and disseminate information to existing and potential investors about Fund Managers, performance of current funds and the process of investing in Unit Trusts.

– END –

Note

This article is a part of First Capital Holdings PLC’s Investor Education Series. The Investor Education Series is aimed at improving investment education and financial literacy in Sri Lanka and enabling investors to make informed decisions about investments and the financial market and is not an endorsement of specific products.

About the Writer

Dinesh Fernando – Senior Manager First Capital Asset Management Limited

Dinesh Fernando has over 20 years’ experience covering a wide range of financial service businesses including fund management, research, investment banking, commercial banking, and project financing. Prior to joining First Capital he was the fund manager at one of Sri Lanka’s oldest unit trust management companies. Dinesh is a CFA Charterholder.

Gilt Edged Fund

UNIT TRUSTS
FC UNIT TRUSTS

The First Capital Gilt Edge Fund invests exclusively in government securities (treasury bills and bonds) issued by the Central Bank of Sri Lanka which are default risk-free instruments. It provides a tax-free income and offers you the option of withdrawing your investment at any time.

The Unit Trusts Funds are managed by First Capital Asset Management Limited a subsidiary of First Capital Holdings PLC, a full service investment bank rated A- and listed on the Colombo Stock Exchange.

First Capital Asset Management Limited is regulated by the Securities and Exchange Commission of Sri Lanka, while the Bank of Ceylon acts as the trustee and custodian of the funds.

First Capital Money Market Fund

UT Money Market Fund

First Capital Money Market Fund is an open-ended fund that invests in corporate debt and government securities which mature within one year. The fund  is a good substitute for savings accounts and short term fixed deposits. The fund gives higher tax-free returns on your investment with the flexibility of withdrawing your investment at any time.

The Unit Trusts Funds are managed by First Capital Asset Management Limited a subsidiary of First Capital Holdings PLC, a full service investment bank rated A- and listed on the Colombo Stock Exchange.

First Capital Asset Management Limited is regulated by the Securities and Exchange Commission of Sri Lanka, while the Bank of Ceylon acts as the trustee and custodian of the funds.