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What are Unit Trust Funds?

Unit Trust Funds Overview

Unit Trust Funds are financial instruments that pool money from multiple investors, managed by fund Management Companies. These funds comprise a diversified portfolio of stocks, treasury bills, and bonds etc, giving unit holders proportional ownership.

Investment Options

Unit Trust Funds cater to various financial goals by offering different investment options.

Equity Unit Trust Funds : Primarily invest in the stock market for capital appreciation.

Debt Funds : Focus on money and bond markets, aiming to generate regular income.

Selecting a Unit Trust Fund

Choose schemes managed by fund managers with a strong long-term performance track record.

Review historical performance using a UT calculator to guide your decision.

What are Fixed Deposits?

Fixed Deposits Overview

Offer a fixed interest rate over a tenure ranging from 1 month to multiple year periods, where interest is paid at maturity.

Interest Compounding Example

if a bank offers a 6% interest rate (compounded annually) on a 3-year FD, an initial deposit of Rs 100 would grow to Rs 106 after the first year. In the second year, the 6% interest would apply to Rs 106, earning you an additional interest of Rs 6.4.

Unit Trust Fund Category Fixed Deposits
Variable and market-linked. Check Historical returns to track the record of top performing funds
Interest Rate Different
Fixed
Paid Daily
Interest Income Different
Paid at Maturity
Flexible, minimum 1 Day
Instant redemption available*
Lock-in Period Different
Till Maturity
Any day*
Withdrawal Different
At Maturity
LKR 100.00
Minimum Investment Different
Varies
5% Withholding Tax (WHT), Realized interest income liable for income tax*
Tax Same
5% Withholding Tax (WHT), Interest income liable for income tax

Why Choose Unit Trust Funds?

Attractive Returns

Unit Trust Funds at CAL are designed to provide more attractive returns by tapping into into the growth potential of diversified investments in stocks and bonds.

Flexibility

CAL offers a range of Unit Trust Funds tailored to different risk appetites and financial goals, whether you prefer the higher potential returns of equity funds or the stability of debt funds.

Strategic Investment

For investors looking to achieve long-term growth, Unit Trust Funds at CAL provide a more dynamic and potentially rewarding option.

Professional Management

Our funds are managed by experienced professionals who actively adjust portfolios to optimize returns, unlike FDs, which offer fixed returns.

Regulatory Assurance

As a licensed Fund Manager in Sri Lanka, CAL adheres to strict regulatory standards set by the SEC, ensuring that your investments are managed with the utmost care and transparency.

Attractive Returns

Unit Trust Funds at CAL are designed to provide more attractive returns by tapping into into the growth potential of diversified investments in stocks and bonds.

Flexibility

CAL offers a range of Unit Trust Funds tailored to different risk appetites and financial goals, whether you prefer the higher potential returns of equity funds or the stability of debt funds.

Strategic Investment

For investors looking to achieve long-term growth, Unit Trust Funds at CAL provide a more dynamic and potentially rewarding option.

Professional Management

Our funds are managed by experienced professionals who actively adjust portfolios to optimize returns, unlike FDs, which offer fixed returns.

Regulatory Assurance

As a licensed Fund Manager in Sri Lanka, CAL adheres to strict regulatory standards set by the SEC, ensuring that your investments are managed with the utmost care and transparency.

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Features of Unit Trust Funds

Diversification

Unit Trust Funds actively manages risk by investing in a diversified portfolio of stocks, treasuries, corporate debt and more.

Market Exposure

Different types of Unit Trust Funds, such as equity funds and debt funds, come with varying risk profiles.

Equity funds are inherently more volatile but offer the potential for higher returns over the long term, making them suitable for long-term investment goals. Conversely, debt funds are less volatile and are better suited for short to medium-term financial goals.

Regulation

Managed by professionals regulated by the Securities and Exchange Commission (SEC) of Sri Lanka, ensuring adherence to strict investment standards.

Features of Fixed Deposits

Safety

Often considered safer due to guaranteed interest and principal upon maturity.

Risk Factors

The safety and liquidity of FDs depend on the financial health of the bank or financial institution.

Regulated by the Central Bank of Sri Lanka (CBSL), which enforces prudential lending norms.

Past Concerns: Instances of withdrawal restrictions, imposed limits, or even suspension of withdrawals have occurred in in the past, affecting depositor access to funds.

Key Difference Between Unit Trust Funds and Fixed Deposits

Unit Trust Fund Category Fixed Deposits
Unit Trust Funds are subject to market risks. Different type of schemes have different risk profiles. Invest according to your risk appetite
Safety Different
Very safe (Subject to financial strength of the bank)
Open-ended funds are highly liquid
Liquidity Different
Medium to high liquid. Penalties may apply on premature withdrawals.
Market Linked.
Returns Different
Assured Returns.
Regulated by the SEC
Investors Interest Protection Same
Regulated by CBSL

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Disclaimer Relating to Unit Trust Funds

We’ve included below a few considerations a potential unit trust fund investor should make when investing in unit trusts.

  • The fund is regulated by the Securities Exchange Commission (SEC).
  • The annualized YTD is variable and subject to change. The, past performance is not a definitive indication of future performance.
  • Investors are advised to read and understand the contents of the explanatory memorandum before investing.
  • The suitability of the investment is based on the investment objectives, financial situation and particular needs of individual investors and suitability should be assessed by the Investor.