The Unit Trust industry while celebrating its 17th year in 2008, recorded a collection of

Rs 3,242.6 million in 17 funds in the year 2008 which are managed by the members of the Unit Trust Association of Sri lanka a release stated. This inflow mitigated the impact of the downtrend in the stock market consequent to the global crisis in the financial markets in general and stock markets in particular. As a result the equity funds in the industry contracted in value during the last quarter of the year. The inflows in to the funds are mainly attributable to the launch of new close ended gilt funds during this period.

The member companies offer Equity, Balanced, Income, Gilt, Money Market and index type of funds to the general public to effectively plan their financial needs by selecting appropriate funds. "The Unit Trusts provide safety through trustee and custodian mechanism where the funds are held by a reputed bank in Srilanka and our member companies provide expert management of those funds to achieve the stated investment objective of each fund" explained S.Jeyavarman, President of the Association.

In the year 2008, the Colombo Stock Market fell by 40.8% as measured by All Share Price Index. The Unit Trust funds which invest in listed shares in average only suffered 26.3 % in this period. This illustrates the importance of diversification of investments to protect our savings from adverse fall of markets. Unit Trust managers select investments prudently to ensure safety within the regulatory guidelines for the industry while optimizing the returns to investors. The general interest rates had been higher in this period and helped the fixed income investors to generate better returns in a higher inflationary environment. "The Unit Trust funds which invest in pure fixed income instruments such as government securities, corporate debt, and trust certificates paid good return to investors while providing safety to the capital of the investors" he added. Investors in Unit Trusts can enjoy professional management at low cost and other benefits of liquidity, tax advantage and diversification of investments. It is an appropriate investment for small investors, professionals and others have no time to manage their financial affairs and institutional investors to enhance their tax adjusted returns.

The Unit Trusts are subject to proper external audit and comes under the regulatory supervision of the Securities and Exchange Commission of Srilanka. Unit Trusts are required to submit its reports to the investors every six monthly intervals.

The investors can invest in open ended Unit Trust Funds on a regular basis or lump sum at once at prevailing selling prices whereas they can withdraw at the prevailing buying price. It is important to note most of our funds are for long term savings and the facility to withdraw is a feel good feature to the investors. Meanwhile investors can participate in close ended schemes at the time of Initial Public Offer (IPO) the release further stated.