Marks a noteworthy addition of unitholders during a challenging year
Softlogic Invest, posted a positive performance for the year ending in December, 2021. The Softlogic Equity Fund marked a 58% (for the year ended December 2021) return to investors while the Softlogic Invest Money Market fund posted an annualized return of 7.68% (As at 31st December 2021).
Since its inception in July 2020, the vibrant young Asset Manager secured returns of 73% (as at 31 December 2021) since inception for its equity fund investors amidst a challenging backdrop coloured by a debilitating global pandemic. Unlike most of the other unit trust funds, the Softlogic Equity Fund does not charge any front‐end fees and allows unit holders to invest the full value of their investment in the fund, without the deduction of any fees at the time of investment. The past year saw over 440 new unit holders joining the company’s equity portfolio, marking a significant growth in unit holders for the 2021 calendar year.
“We are delighted to post these numbers for the year 2021 while also remaining bullish on a commanding financial sector growth in 2022 driven by current rising interest rates and attractive valuations. Right now, our equity fund is well positioned to perform with a defensive and growth portfolio mix capable of optimizing portfolio returns, while investors with small ticket size values are able to gain from the buoyant stock market that prevailed during 2021. We believe that our rapidly increasing customer base is a strong indication of consumer trust in both our credibility and promising market conditions, and we are aiming to deliver an extremely rewarding year ahead as they continue to regularly build on their investments in 2022,” remarked Softlogic Invest Chief Executive Officer Niloo Jayatilake.
With an optimistic view of the year ahead, Softlogic Invest will distribute the total equity allocation for 2022, with impressive sector allocations to the Industrial sector (40%) followed by Financials (28%), Transportation (22%), and Consumer Discretionary (10%). The company’s top five equity allocations are Expo Lanka Holdings PLC, Royal Ceramics PLC, LOLC holdings PLC, HNB Bank PLC and Sampath Bank PLC. Expo Lanka Holdings PLC is projected to perform well in the current market context as its revenue is earned in USD and freight rates still portray a rising trend, while Royal Ceramics PLC will be able to command higher margins in the local market as the ban on tile importation has allowed the local tile manufacturer to utilize optimal plant capacity.
In turn, the Softlogic Invest Money Market fund, posted an annualized return of 7.68% by the year ending on 31st December, 2021, and thereafter moving up to 8.02% as of 19th January, 2022. The company delivered these outstanding returns with investments of 76% in “A” category investments, to a bolstered investor base that grew by 3,500 new unit holders during FY2021, an impressive growth in unitholders.
“While we are thrilled to announce the exceptional performance of the fund during the past year, we sincerely believe that there is further room for yield improvement soon, since most of our lower-yielding investments are maturing and reinvestments are continuing to happen at higher yields. The money market fund’s weighted average portfolio duration is about 6.4 months and 43% of the portfolio investments will mature within the next six months, placing the fund yield in an extremely favourable position to gain yield advantage due to these maturities. Therefore, investors will continue to leverage the advantage of rising interest rates while being able to invest in a highly liquid diversified money market vehicle. Bolstered by the success of the past year, we believe the company is well‐placed to continue to deliver high quality, long‐term growth for all stakeholders in 2022,” Softlogic Invest Fund Manager Daham Hettiarachchi, stated.
With an ICRA Lanka ”(SL) A mfs” rating, the Softlogic Money Market Fund is an open-ended Unit Trust Fund approved by the Securities and Exchange Commission of Sri Lanka (SEC). The fund invests in government treasury bills, bonds and other government securities, investment grade corporate debt securities such as debentures, commercial papers, securitization papers and repurchase agreements with maturities of less than one year which can be readily convertible to cash. The overall objective of the Fund is to earn a return of interest income while preserving investor capital and liquidity.