NAMAL Flexi Income Fund - better returns for investors
The first close ended fund in Sri Lanka, the NAMAL Flexi Income Fund
(NFIF) pays quarterly dividends to investors as proposed in its initial
offer in March 2007, a media release from the National Asset Management
Limited (NAMAL) said.
With a two-year duration and part capital redemption features, NFIF
paid two dividends of Rs 0.43 and 0.46 in 2007 and four dividends of Rs
0.40, 0.46, 0.48 and 0.45 in 2008 and one dividend of Rs 0.41 in 2009.
This scheme will be retired in March 2009, the release said.
“Being a pioneer Unit Trust Manager we created this fund to
essentially invest in corporate papers and trust certificates to
generate these market interest rates with a tax advantage to corporate
This scheme also provides an opportunity to individual investors to
participate in the corporate debt market said Chief Executive Officer of
NAMAL, S. Jeyavarman. “We have managed this fund prudently selecting
investments to yield better returns over the prevailing Treasury bill
yield thus achieving an annual compound return for the period up to
January 30, 2009 of 17.9% and the tax effective return of 27.7 %,” he
The uptrend in interest rates since the launch of NFIF has helped us
to deliver an increased return to the investors than expected. When the
fund was launched the one-year Treasury bill rate was around 14.5% and
this rate peaked at 19.96% in December 2007 and declined thereafter.
We think the current limited bank credit to the corporate sector
would increase the appetite for the corporate to seek funds more from
the capital market instruments such as debenture, commercial paper and
A fund of this nature can match the investor need with that of the
“Currently the interest rates seem on its decline and our Flexi
scheme can provide the opportunity for investors to lock in their
capital for a fixed period to generate better returns compared to other
forms of savings,” he said.