Sri Lanka’s Guardian Acuity launches liquid gilt fund

COLOMBO (EconomyNext) – A mutual fund invested in zero-risk government securities where investors can easily enter and exit as easily as a bank deposit has been launched by Guardian Acuity Asset Management, officials said.

The Guardian Acuity Asset Management Money Market Gilt Fund is invested in government securities with maturities below 12 months and gilt-edged reverse repurchase deals.

"It is purely invested in government securities and is therefore meant for investors who have the lowest risk profile," Ruvini Fernando, Chief Executive of Guardian Fund Management said.

The Guardian Acuity Asset Management, is a joint venture with Guardian Fund Management which is part of the Sri Lanka’s Carsons Cumberbatch group and Acuity Partners, an investment banking owned DFCC and Hatton National Bank.

Fund Manager Sumith Perera said there would be no entry or exit fees allowing investors to place money or take it out of the fund as easily as a bank deposit. The fund will be valued daily.

Its expense ratio was 0.49 percent including trustee and management fees.

Investors could downloand forms online from GuardianAcuity.com and also used Hatton National Bank branches to enter and exit the fund, officials said.

The fund will however pay higher returns than savings deposits, which closely tracks Treasury bills. Due to the short term nature of the investments it can also follow market interest rates.

General Manager Mohan Thangarajah said the GAAM money market gilt fund is targeted at professionals such as doctors who do not have time to spend on managing their savings.

The returns from the mutual funds are also tax free.

The gilt fund could also be used by corporates to place excess cash for short periods and collect cash to pay dividends or redeem debt, Thangarajah said.

The firm’s GAAM Fixed Income Fund which invests in gilts, fixed deposits, commercial paper and securitized paper.

GAAM Equity Fund has outperformed the Colombo All Share Price Index returning 70.3 percent from February 2012, higher than the 33.2 percent of the stock index, Perera said.