The National Equity Fund (NEF), Sri Lanka’s pioneer unit trust, has reported a total income of Rs. 43.3 million for the half year ended September 30, 2001, up from Rs. 34.7 million a year earlier.

With direct expenses declining marginally to Rs. 6.5 million from Rs. 6.7 million a year earlier, NEF had a pre-tax income of Rs. 36.8 million during the period under review, up from Rs. 28 million a year earlier. There was no tax obligation.

NEF saw a net realised loss of Rs. 23.3 million on the disposal of securities during this period compared to a loss of Rs. 82.5 million a year earlier. Against that, there was a net unrealised appreciation of securities of Rs. 38.3 million during this period, down from an appreciation of Rs. 117.5 million on this account a year earlier.

The net gain on investments during the half year was Rs. 15 million, down from Rs. 35 million a year earlier and the total earnings for the period was Rs. 51.9 million, down from Rs. 63 million a year earlier.

NEF posted a total return of Rs. 51.2 million for the period under review, down from Rs. 62.6 million a year earlier and said that unit holders funds from investments activities had increased by this amount during the half year.

The fund had allocated 49% of its net assets for share investment and 51% on fixed income securities and cash with the fixed income securities equally distributed between long and short terms as a hedge against interest rate volatility.

The fund manager, Mr. Praboda Samarasekera, said that NEF’s income improved from a year earlier both from interest and dividends and the hedging strategy had so far appeared to be successful with the returns to the fund improving.

"This would enable a better dividend distribution in the future," Samarasekera said.