Compared to many of its regional neighbours, Sri Lanka still lacks a robust investment culture among its populace. One main reason for this is a lack of general awareness regarding investments and investment avenues. Nevertheless, efforts are underway to change this situation by creating an investment culture in the country, particularly among young people and Softlogic Invest is one of the driving forces behind this endeavour.
When Chairman of Softlogic Group Ashok Pathirage decided to launch Softlogic Invest in July 2020, the COVID pandemic was already raging. Softlogic Invest was launched as the asset management company of Softlogic Capital PLC with two “Unit Trust Funds,” namely Softlogic Equity Fund and Softlogic Money Market Fund. A “Unit Trust Fund” is a collective investment pool made by many investors with a common investment objective. This pool of money is used to purchase a portfolio of financial securities. In exchange for the money invested, the fund issues fund units to each investor, who are then known as unit holders.
“It was a bold decision by our Chairman who insisted that we launch despite it being the height of COVID. It was challenging but there was opportunity for the investors,” Niloo Jayatilake, Director / Chief Executive Officer of Softlogic Invest told Newswave.lk in an interview. Three years on, the company has made rapid gains in the investment market, acquiring 14, 000 unit holders within that timeframe.
Currently, the two unit trusts that Softlogic Invest offers cater to different investor preferences.
The Money Market Fund focuses purely on short-term fixed income securities where 60-70% is invested in government securities – mirroring savings products. This fund is ideal for someone who is looking to invest for a short term (typically 12 months or less) and get good returns within that period. Investors to this fund can enter and exit the fund at any time with no extra charges.
The Equity Fund meanwhile, focuses on investing in the Colombo Stock Exchange (CSE) and is targeted to clients who are looking for long-term returns with a slight risk appetite. It is ideal for people who can invest in the long-term.
An investor can enter either fund with a minimum initial investment of Rs. 5000 or more.
The Softlogic Money Market Fund now has Rs. 1.4 billion in Assets Under Management (AUM) said Uvin Atukorale, Fund Manager at Softlogic Invest. AUM is the total market value of assets being managed by a financial institution. The Softlogic Equity Fund meanwhile, has a total fund size of Rs. 80 million.
“The reason we launched the two funds were due to different specifications and the target market was different,” said Ms. Jayatilake. The Money Market Fund has the same concept as a savings account. But the company is able to give a better return than a bank’s savings rate because the feature of these funds is that you can invest today and take out the money giving one day’s notice. Ms Jayatilake stated that they have kept the minimum entry-level investment at Rs. 5000 because they want this Unit Trust to be broad-based so that it is affordable for any investor.
This strategy has brought results because the Unit Trust industry currently has only 100, 000 investors and Softlogic Invest has 14, 000 of those, though it was only launched in 2020, she further noted. “Though our AUM is small, our philosophy in reaching the masses has worked,” she emphasised.
Investing is easy, said Mr Atukorale, outlining that Softlogic Invest has a simple five-step process whereby anyone can commence their investment journey. “All you need to do is go to www.softlogicinvest.lk. You need to submit some information which includes your NIC Number, name, contact number and the email ID. As soon as that’s done, one of our agents will get in touch with you and the account can be created in a matter of hours.”
Each investor’s fund is managed by a qualified fund manager. They will be working towards getting the investor the best possible return, keeping in line with the highest ethical standards. Investors can go to Softlogic Invest’s website to easily check their return.
One main focus of Softlogic Invest is to drive an investment culture among young Sri Lankans. Explaining reasons for this, Mr Atukorale said the company was looking at young people, including school-leavers as with them, they can go on a long investment journey.
Being a retail focused brand, Softlogic’s retail strength gives the company better visibility to tap the youth market. “We have also been in touch with some of the private universities and stockbrokers. We are trying to educate the students on what a Unit Trust is for them to start an investment journey with us,” said Mr Atukorale.
“This is a well-regulated industry and governance is very high,” emphasized Ms Jayatilake. The Unit Trust is regulated by the Securities and Exchange Commission (SEC). There is also a trustee and for Softlogic’s two funds, it is Hatton National Bank, which comes as the custodian bank. They safeguard the assets of all the people who come into the fund.
In the month of August, Softlogic Invest had the best running yield out of all the money market funds. “We are a fund that is still growing,” said Ms Jayatilake. The company has now set its sights on attracting investors from beyond the Western Province. “We feel there’s a lot of potential beyond the Western Province. We are looking to bring in those investors. It is a harder task but we feel that it is a longer term journey which will be beneficial to all the investors.”
Softlogic Invest is also looking at product innovation in terms of launching several more funds to suit the various appetites of investors, she further revealed.
For more info visit: https://softlogicinvest.lk/news/
