Unit trusts in Sri Lanka: Growing investment trend

An expert conversation with Unit Trust Association of Sri Lanka (UTASL) President Christine Dias Bandaranaike

- 

Christine Dias Bandaranaike, CFA Charterholder since 1999, brings over 15 years of experience in pooled funds both locally and internationally. As the current UTASL President, she has been at the forefront of a remarkable transformation in Sri Lanka's unit trust industry — one that has seen investor numbers double and assets under management almost triple within five years. Here, she shares her insights on why unit trusts matter, how they work, and why they are poised to become a cornerstone of financial inclusion in Sri Lanka.

When we think of investing, most Sri Lankans still stick to fixed deposits, gold, or stocks. How exactly do unit trusts work and why are they relevant for personal wealth management?

Unit trusts are pooled investment vehicles that break down traditional barriers to accessing professional investment management. Unlike direct share investments, which require knowledge, time, and risk-taking, or fixed deposits that restrict liquidity and often underperform inflation, unit trusts offer low entry points (as little as Rs. 1,000), daily liquidity.

SEC-regulated fund managers professionally manage them. This means every day, people, not just high-net-worth investors, can access diversified portfolios and expert oversight. It’s a simple, accessible way to start investing and growing wealth systematically.

What risk-free alternatives exist in Sri Lanka, and how do unit trusts fit in?

Government securities like Treasury bills and bonds are considered the traditional “risk-free” options because the State backs them. But not everyone can access them easily due to minimum investment sizes or a lack of knowledge. That’s where gilt-edged unit trusts come in. These funds invest in government securities and repurchase agreements, giving investors similar low-risk exposure, with much easier access and liquidity.