Sri Lanka’s pioneering Unit Trust Manager

FAQ

  • What is a Unit Trust?

    A Unit Trust is a collective investment scheme which pools the money of investors in a diversified portfolio of securities. Unit trusts will have differing investment objectives such as stock market investment, fixed income investment or balanced funds that invest in both stocks and fixed income securities.

    A Unit Trust is either open-ended or close-ended. An open-ended Unit Trust issues and redeems units on a daily basis. A close-ended unit trust only issues units at the initial offer period and redeems units at the fixed maturity date.

    The Unit Trust is managed by the Managing Company (NAMAL) while the assets of the Unit Trust are held by the Custodian and the interests of the unit holders are protected by the Trustee.

    Unit Trusts are regulated by the Securities and Exchange Commission of Sri Lanka (SEC) under the SEC Act and Unit Trust Code. Every NAMAL Unit Trust has been licenced by the SEC.

  • What is the role of the Managing Company?

    The main role of the managing company (NAMAL) is to manage the investment of the Unit Trust in accordance with the objectives. NAMAL will invests the funds in shares, government bonds and bills, corporate debt and money market instruments.

    NAMAL is responsible for the administration of the Unit Trust including calculating the daily NAV and selling units and redeeming units for investors.

  • What is the benefit of investing in a Unit Trust instead of investing directly?

    Investing in Unit Trusts allows you to plan and invest for your future financial wealth, significant life milestones and a prosperous retirement.

    The benefits from investing in Unit Trusts are:

    • Your money is managed by a professional fund management team with vast experience and performance track record
    • You are investing in a portfolio of investments that are diversified over a number of asset classes, sectors and companies reducing risk
    • As your money is pooled with other investors to create a larger portfolio you will benefit from higher investment returns
    • You will benefit from investment alternatives that are not available to retail investors
    • You can invest or redeem your units on a daily basis
    • A range of Unit Trusts to choose from according to your investment objectives
    • You will benefit from professional risk management
    • All NAMAL Unit Trusts are regulated by the Securities and Exchange Commission.

  • Who should invest in Unit Trust?

    NAMAL Unit Trusts are suitable for both retail and corporate investors.

    NAMAL offers a range of unit trusts to meet the investment objectives of all retail investors. Corporate investors benefit from the Unit Trust tax rate of 10%

  • How do I make money?

    You will make money from capital gains – an increase in the unit price. You can realise this capital gain by selling your units to NAMAL.

    Some funds pay a regular dividend which is tax free.

  • How can I get my money back?

    You can redeem your investment on a daily basis. We will buy your units at the Manager’s Buying Price and make payment by cheque or fund transfer.

  • Do I have to pay tax?

    No. As an investor all dividends, capital gains and sales proceeds are free of all taxes. The Unit Trust pays tax at 10%.

  • I only have Rs. 10,000 to invest. Should I invest with you?

    Yes. Unit Trusts are very beneficial to small investors as they can obtain professional fund management and benefit from having their investment pooled to form a large investment fund. You can invest in the capital markets whilst having the peace of mind.

  • Is my money safe?

    NAMAL has an experienced fund management team that chooses investments to protect and grow your money. The NAV is published daily and we send you a statement with your investments every 6 months.

    The assets of the Unit Trust are held by the Trustee and Custodian, Deutsche Bank. All assets of the unit trust are held in the name of the Trustee, who is responsible for protecting your interests.

    All NAMAL Unit Trusts are regulated by the SEC.

  • What is meant by the Investment Ojective?

    The investment objective specifies the strategy that each Fund will adopt.

    Growth Funds – aim to provide medium to long term capital gains by allocating majority of the fund to shares. Growth funds are suitable for investors looking for higher returns and willing to take more risk.

    Balanced Funds – aims to provide capital growth and regular income. The fund is allocated between shares and fixed income securities. The fund is suitable for investors who want capital gains but with the guarantee of a regular income at moderate risk levels.

    Income Funds – invest in fixed income securities to provide regular income at low risk levels. These funds provide above deposit rate returns with the added advantage of regular liquidity.

  • Who can invest?

    • Citizens of Sri Lanka, companies and institutions incorporated in Sri Lanka
    • Pension Funds, Provident Funds and other legally constituted bodies incorporated in Sri Lanka
    • Minors under the age of 18 years may apply for units, but the application should be made by a parent or guardian on behalf of such a minor.
    • Foreign institutional investors, corporate bodies incorporated outside Sri Lanka and individuals resident outside Sri Lanka may invest via a Securities Investment Account (SIA A/C) opened with any licensed commercial bank in Sri Lanka.

  • I live outside of Sri Lanka, can I invest?

    Yes. Foreign institutional investors, corporate bodies incorporated outside Sri Lanka and individuals resident outside Sri Lanka may invest via a Securities Investment Account (SIA A/C) opened with any licensed commercial bank in Sri Lanka.

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