First Capital seeks shared growth in banking partnerships to expand unit trust market

By Nishel Fernando
First Capital Holdings said it sees room for shared growth in partnerships with the banking sector  to broad base  the unit trust investment market in the country.
First Capital this week announced a  groundbreaking  partnership with HNB to introduce ‘First Capital Money Plus Fund’ which includes a real time digital withdrawal and payment facility for unit trust  investors for the first time in the country.
Speaking at the occasion, First Capital Holding  CEO Dilshan Wirasekara who’s also the current Colombo Stock Exchange Chairman highlighted that partnership with a bank such as HNB would instill the much needed confidence of the unit trusts among the public.
Although, Unit trust market has grown by Rs.100 billion to around Rs.350 billion, he noted that lack of confidence and lack of awareness mainly deriving from low levels of financial literacy among the public as the key barrier for growth of unit trusts as well as capital market products.
While some bankers view units trusts as competition, he stressed that collaborations with banking partners would result in benefits for both parties.  In this situation, he noted that HNB would gain new customers who decide to apply for the real time digital withdrawal and payment facility. 
“We see that as a situation where two plus two can be five or six,” he added.
In agreement with Wirasekara , HNB, wholesale Banking Group- Deputy General Manager Damith Pallewatte  shared similar views on shared growth. In particular, he noted that HNB’s cutting-edge digital products could play a leading role in broad basing unit trust products in the country.
The new Unit Trust Fund approved by the Securities Exchange Commission (SEC) under the new SEC Act, which is considered a  milestone , provide investors with instant access to their investments through over 3500 ATMs, and digital payment gateways available island-wide. Typically, unit trust investors are required to inform prior to 9.30 a.m. on market day to withdraw their funds within the same day.

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In terms of returns , Wirasekara shared that First Capital plans to mirror some of the strategies used in its flagship ‘First Capital Money Market Fund’ in combination of assets such as corporate bonds, equities, government securities and fixed deposits at NBIFs which currently provide industry leading annual return above 16 percent to investors.
“Staying true to our brand promise, ‘performance first’, we are introducing this revolutionary solution to the investment market, providing convenient and instant access to funds that give attractive returns over conventional investment instruments. We are hoping to bring this new facility to the market very soon, and I am confident that this initiative is going to be an important milestone in living our vision ‘to improve the lives of all Sri Lankans through financial solutions,” elaborated Frist Capital Holdings, Executive Vice President - Asset Management, Kavin Karunamoorthy.