Friday, 23 July 2010 00:00
Ceybank Unit Trust, Sri Lanka's largest equity linked Unit Trust Fund with net assets over Rs. 3,700 million as at end March 2010 and managed by Ceybank Asset Management, has performed admirably to report 121% growth (net asset value per unit) during the financial year ending 31 March 2010.
"This performance of over 120% was possible due to the aggressive growth-oriented investment strategy taken by the fund managers," Ceybank Asset Management CEO/Executive Director Chitra Sathkumara said.
The Manager, CeybankAML, with the concurrence of the Trustee to the Fund, Bank of Ceylon, has announced an increased dividend of Rs. 1 per unit to all the registered unit holders of the fund as at 31 March 2010.
This amounts to an increase of 100% over the previous year's dividend of -/50 cents per unit. Based on the Ceybank Unit Trust offer price as at 1 April 2009, this gives a dividend yield of 8.6% to its unit holders, in addition to the capital appreciation.
The fund realised its biggest-ever trading profit of Rs. 615 million as capital gains from share trading during FY09/10, up 383% from Rs. 127 million in the previous year. The Manager has decided to utilise Rs. 157 million for distribution for the FY 09/10.
The unit holders have the option to reinvest this dividend in the fund without the usual 5% front-end fee, and the majority of the investors reinvested their dividends back in the fund expecting more capital growth, said Sathkumara.
The investors, who have invested Rs. 100,000 in Ceybank Units on 31 March 2009, could have earned Rs. 211,665 by 31 March 2010. If they had invested the same amount in a savings account giving 6% interest p.a., they would have earned only Rs. 106,000 or in a fixed deposit which gives 12% p.a. only Rs.112,000.
The fund was launched in March 1992 by then Unit Trust Management Company Ltd (UTMCL). Bank of Ceylon, Merchant Bank of Sri Lanka, Carson Cumberbatch, Unit Trust of India and HSBC Asset Management promoted the UTMCL.
However, in late 2001, Sri Lanka Insurance Corporation acquired the Merchant Bank of Sri Lanka's stake in UTMCL. In the last quarter, BoC acquired HSBC's shareholding. Carsons also divested part of its holding to BOC and SLIC. With BoC becoming the largest shareholder, UTMCL changed its name to Ceybank Asset Management.
The fund manager, with the intention of achieving capital growth with the expected upward movement of the market in the medium term, has done major changes in the asset allocation. Taking advantage of the downturn in the market, some of the blue chip shares of potential value, especially in the Hotel Sector, have been aggressively acquired at very low prices and disposed of less potential ones.
The fund's investment in the equity has been increased to gain from the expected post war rally in the Colombo stock market. Investments are well diversified and the equity is heavily weighted towards Hotels and Manufacturing Sectors. These sectors are expected to rebound and therefore Ceybank Unit Trust is well-placed to take advantage of the expected upward market movement.
This aggressive strategy has paid off, as shown by the exceptional performance. During 2010, the ASI has grown by 36% and Ceybank Unit bid price appreciated by 44%, up to end June. Therefore, investors of Ceybank Units can expect fair capital gains in the medium term, said Sathkumara.
From Daily Mirror published on Friday, 23 July 2010 00:00
