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The Guardian Acuity Equity Fund is an open ended unit trust fund that invests in stocks listed in the Colombo Stock Exchange. (CSE)

The Portfolio is actively managed using a bottom up stock selection approach where investee companies are evaluated by the fund managers and research team using fundamental research and the team's extensive experience in capital markets.

Fund Facts

  Performance

Fund cumulative growth since inception (Till end May 2019)

41.13%

Benchmark ASPI cumulative growth since inception (Till end May 2019)

0.0%

Fund CAGR since inception (Till end May 2019)

4.86%

Benchmark CAGR since inception (Till end May 2019)

0.0%

  GENERAL FACTS

Inception Date

February 2012

Fund Size (End May 2019)

LKR 244.63 Million

Investment Objective

Achieving medium to long term capital appreciation

Minimum Investment

LKR 1,000

Trustee

Deutsche Bank

Unit Price as at 2019.06.13

RS 0.0

  ASSET ALLOCATION

Equity

40% (MIN) - 95% (MAX)

Cash & Cash Equivalents

5% (MIN) - 40% (MAX)

  FEE STRUCTURE

Management Fee

2.25% per annum

Trustee & Custodian Fee

0.3% per annum

Exit Fee

2% (applicable only for withdrawals during the first year of investing)

To understand the current status of the Fund, refer to the latest Fact Sheet.

Commentary BY FUND MANAGER, ASANKA JAYASEKERA

First four months’ upbeat in global equity markets ended in May as trade negotiations between US and China soured. Investor nervousness further grew with the announcement of 5% new tariff on all Mexican imports. Albeit the current dovish (declining) outlook on interest rates which predicts three US Federal Reserve’s rate cuts for this year, negative global economic outlook, driven by the trade tensions, dominated the market sentiment. Against this backdrop, all major equity markets around the world dropped during the month, notably US and other Asian equity markets dropped by more than 6% in May. Colombo Stock Exchange recorded another negative month while already weak investor sentiment was dashed by rising economic concerns and pollical uncertainty following the Easter day attack. All Share Price Index fell by 3.1% and more liquid S&P 20 index dropped by 6.0% in May. The net foreign inflow in April (Rs 1.7bn) reversed in May recording a Rs 1.2 bn outflow. The recent quarterly earnings of listed corporates showed mixed trend but tilted more towards negative growth. Elevated lending rates, rising costs and muted consumer demand dampened profits for many manufacturing and retail players. Banks and Finance companies’ earnings were affected mostly by rising non-performing loans which is evident in a sluggish economic environment. However, March ending quarter reported some encouraging revenue growth numbers in some sub sectors of FMCG, F&B and even construction which could have been leading indicators of an economic recovery unless the terror attack occurred. The fund reflected a similar performance to that of the CSE, where it experienced a drop of 2.82% for the month and 12.46% for year to date period. The top three contributors to the month’s drop were Sampath Bank (-12.2% MoM), NTB Bank (-9.9% MoM) and Ceylinco Insurance (-7.5% MoM). The top detractors from the drop were Dialog Axiata (+6.9% MoM) and The Lanka Hospitals (+5.5% MoM). Bank, Finance and Insurance sector of the CSE fell by 5.3% recording the largest drop among the top ten sectors of ASPI. This was led by fundamental reasons such as rising risk of non-performing loans as the economy came to a cross road and market related reasons such as foreign selling pressure together with right issue anxiety. Meanwhile, current positive changes for equity markets include sharp declining trends in interest rates, improving balance of payment situation and stable currency, a better agriculture output, fiscal stimulus (salary increments, economic revival programs by government) etc. will stimulate investor confidence and activate much needed retail investor base to revive the market.

Why invest in the Equity Fund

Exposure to multiple stocks

Investment in the Equity Fund provides the investor exposure to all stocks the fund is invested in

Liquidity

Investors can gain exposure to equity without having to worry about liquidity

Switch Between Funds

investors have the flexibility to switch to the money market anytime at no cost in response to capital market movements

Well researched investment decisions

Stock calls are made by fund managers based on thorough research and insights by the internal research team

Hassle free; monitoring and execution

All transactions are executed by a separate operations team


INVESTMENT STRATEGY and stock selection process

In line with the bottom up stock selection approach we follow, the focus is more on identifying fundamentally strong securities trading at reasonable valuations, from a long term perspective.

stock selection process

RISKS OF INVESTING IN THE FUND

investment value is subject to change based on movement in the stock market.

As such the ability of the Fund to achieve its investment objectives will depend on the performance of the equity market, interest rate environment and overall economy.

The Unit price of the Fund can increase as well as decrease depending on the performance of the stock market

Trading on the stock exchange as a whole is subject to the level of liquidity of the market, which at times could be low especially if faced with volatility due to external developments.

This liquidity situation may inhibit the Fund's ability to obtain shares in quantity without having a marked effect on the shares' market price and may further prevent the Fund from being able to liquidate a position at the prevailing market price.

The GUARDIAN ACUITY MONEY MARKET FUND is an open ended unit trust fund that invests in investment grade (Rated BBB- or Above) fixed income securities maturing within 365 days.

NOTE :

Current yield is calculated based on average unit prices of past seven days and it is variable and subject to change

Current yield is based on past performance of the funds and the past performance of the fund should not be taken as indicative of its future performance.

Fund Facts

  Performance

Fund cumulative growth since inception (Till end May 2019)

106.59%

Benchmark cumulative growth since inception (Till end May 2019)

82.11%

Fund CAGR since inception (Till end May 2019)

10.51%

  GENERAL FACTS

Inception Date

February 2012

Fund Size (End May 2019)

LKR 4342.25 Million

Investment Objective

To maximize fund yield at a relatively low risk level

Minimum Investment

LKR 1,000

Trustee

Deutsche Bank

Unit Price as at 2019.06.12

RS 0.0

  FEE STRUCTURE

Management Fee

0.60% per annum

Trustee Fee

0.15% per annum

To understand the current status of the Fund, refer to the latest Fact Sheet.

COMMENTARY BY FUND MANAGER, SASHIKA WICKRAMATHILAKE

As we correctly anticipated in our previous comment, the policy rates were brought down by the Central Bank during the month by announcing a 50 bps drop in policy rates. Given the current local & global macro dynamics, it seems inevitable for the CB to continue on its monetary easing path during the remainder of the year. The already below capacity economic growth should be further impacted by the Easter attacks. The economic growth projection has been lowered accordingly to 2.9% from the previous forecast of 4%. Adding to the woes, the cumulative credit to private sector indicated a contraction during the Jan-April 2019 period for the first time since May 2014. External pressures likely to be muted during the rest of 2019 having passed a rocky path with the bulk debt repayments that fell due in 1Q2019. Trade balance has recorded a significant improvement so far in 2019 due to drop in imports whilst exports managing a modest growth. The positive impact from the drop in imports will however offset by the projected drop in tourism earnings as we discussed before. The IMF receipts and another USD1.5 bn sovereign bond issue in the pipeline would further mitigate any impact from slowdown in USD inflows due to attacks. However our view of subdued external sector pressure could deviate if current trend in credit and imports reverse in an unprecedented manner due to unseen policy changes. With the unfolding global economic growth concerns, most advanced and emerging economies have become increasingly dovish (easing interest rates). It also provides a strong case for the Central Bank to continue with its monetary relaxing. On the inflation front we saw a marginal pick in May with headline inflation recording 5% YoY from 4.5% YoY in April 2019 mainly driven by increased food inflation. However currently we do not foresee any risk of inflation deviating substantially from the target mid-single digit levels. Following CBSL’s steps to inject liquidity to the system via SRR cuts and also ceiling rates imposed on FD rates, the overall market interest rates have adjusted down. We expect government security rates and deposit rates to further decline in the coming few months provided the significant excess cash available in the market (overnight liquidity surplus Rs. 48 bn as at 13.06.2019) and no sign of credit demand picking up so far. The bank lending rates that remained stubbornly high, have started to drop gradually last 2 weeks. The rates have dropped in the range 50-200 bps.

INVESTMENT STRATEGY

INVESTMENT STRATEGY

RISKS OF INVESTING IN THE FUND

The ability of the Fund to achieve its investment objectives will depend on the interest rate environment and the performance of the economy.

dividend paid and Unit price of the Fund can increase as well as decrease depending on interest rate fluctuations in the market.

The Fund is subject to interest rate risk, liquidity risk and default risk.

Interest Rate Risk - Changes to interest rates will cause the market values of the instruments in the portfolio to fluctuate which will have a direct bearing on the Unit price of the Fund.

Liquidity Risk - Liquidity risk is the ease at which an instrument can be sold without a significant change in value. The Fund will have a limited exposure to liquidity risk as a result of a higher exposure to more liquid government securities.

Default Risk - Default risk arises from the inability of the debt issuer to meet timely principal and interest payments.

The Guardian Acuity Money Market Gilt Fund is an open ended unit trust fund that invests in government securities maturing within 365 days.

Fund Facts

  Performance

Fund cumulative growth since inception (Till end November 2018)

34.61%

Benchmark cumulative growth since inception (Till end November 2018)

33.23%

Fund CAGR since inception (Till end November 2018)

8.39%

  GENERAL FACTS

Inception Date

February 2015

Fund Size (End November 2018)

LKR 247.35 Million

Investment Objective

To provide a secure annual income by investing in a portfolio of government securities maturing within 365 days

Minimum Investment

LKR 1,000

Trustee

Deutsche Bank

Unit Price as at 2019.06.13

RS 0.0

  FEE STRUCTURE

Management Fee

0.60% per annum

Trustee & Custodian Fee

0.2% per annum

To understand the current status of the Fund, refer to the latest Fact Sheet.

COMMENTARY BY FUND MANAGER, SASHKA WICKRAMATHILAKE

An upward movement in T bill rates was seen in November with the one year Treasury bill rate increasing to 11.20% from 10.39% % in the previous month. A sharp increase in weighted average prime lending rate (AWPLR) was seen during the month reflecting a drop in private sector credit demand. AWPLR decrease to 12.03% from 12.82% in last month.

RISKS OF INVESTING IN THE FUND

The ability of the Fund to achieve its investment objectives will depend on the interest rate environment and the performance of the economy.

The dividend paid and Unit price of the Fund can increase as well as decrease depending on interest rate fluctuations in the market.

The Fund is subject to interest rate risk and liquidity risk.

Interest Rate Risk - Changes to interest rates will cause the market values of the instruments in the portfolio to accrue interest at varying rates, which will have a direct bearing on the Unit price of the Fund.

Liquidity Risk - Liquidity risk is the ease at which an instrument can be sold without a significant change in value.

The Fund will have a negligible exposure to liquidity risk as a result of a full exposure being to liquid government securities.

Get In Touch with our Investment Advisors

+94 11 2039 386

Operational Support

+94 11 2 449 500

General Contact

No: 61, Janadhipathi Mawatha,
Colombo 01, Sri Lanka.