Recognising progress, encouraging accountability: CFA Society Sri Lanka Unit Trust Award framework

THE Best Unit Trust Fund award was first presented at the CFA Society Sri Lanka Capital Market Awards back in 2016, with the objective of recognising and rewarding fund management companies that place unit holders’ interests first, whilst providing adequate disclosures to existing and prospective unit holders to make informed decisions, adopting strong risk management and compliance practices, and implementing best practices in asset management including research which contributes to effective investment decisions.

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Today, the unit trust industry in Sri Lanka, while smaller compared to regional peers, has seen notable growth amidst a favourable interest rate environment over the past two years and a rebounding stock market, surpassing Rs. 550 billion in assets under management (AUM) — which corresponds to approximately $ 1.9 billion — with many new entrants, and the number of units issued having doubled in 2024.

Best Unit Trust Fund Award Committee Chairperson Ruvini Fernando observes strong progress in the adoption of robust governance and compliance practices across the industry, with a number of companies becoming Global Investment Performance Standards (GIPS) compliant over the past few years.

“Companies have also improved the quality of information disseminated to clients and are engaging more actively through various methods of communication to provide regular market updates. Some companies have also enabled secure online subscriptions and redemptions, offering greater convenience to retail investors. Furthermore, it has been encouraging to witness growth in the retail investor base across most funds,” she remarks.