LRA Assigns Initial Fund Stability Rating to CAL Five Year Closed-end Fund

The primary objective of the CAL FIVE YEAR CLOSED-END FUND (“The Fund”) is to optimize income at current market rates by investing in fixed income asset class. The Fund has the mandate to invest in (i) Government Securities; (ii) Quoted and unquoted debentures, securitized papers and corporate debt securities; (iii) Repurchase agreements; (iv) Deposit in Commerical Banks. However, the Fund is expected to primarily stay invested in Government Securities. This is a closed-end fund with a term of 5 years from the date of execution. The Fund has approval in principle from the Colombo Stock Exchange for the listing of the Fund’s units. The portfolio composition as at October 31, 2024, includes Reverse Repo Against Government Securities (~72.1%) and Treasury Bonds (~27.9%). Future returns are subject to market conditions, especially the interest rate environment. In terms of credit risk, ~99.9% of the Fund’s net assets are placed in government securities. The Fund has very small proportion of investment, mainly deposit in A-rated banks. The rating of the Fund takes comfort from the current composition of the portfolio. The fund has Weighted Average Maturity (“WAM”) at 321 days as of October 31, 2024, exposing it to market risk. This will be reflected in the price of fund units, once it is listed. The Fund will continue to invest in accordance with its approved investment policy and market expectations.
Any material changes in the Fund's asset allocation, duration or maturity profile, and returns, compared to peers, will have an impact on the Fund's rating.

About the Entity
Capital Alliance Investments Limited (“The Asset Management Company” or “The AMC”) is licensed by the Securities and Exchange Commission of Sri Lanka Act, no. 36 of 1987 License to operate as a Unit Trust Management Company. The AMC was incorporated on 5th April 2011 and has over 13 years of experience in asset management (collective investment schemes and private wealth management). The AMC operates 13 Collective Investment Schemes (“CIS”) with Asset Under Management (“AUM”) of LKR ~ 125.3 bn (as at Oct’24), making it the second largest AMC in Sri Lanka in terms of AUM. The Board of Directors comprises of three highly qualified and capable members with strong industry experience. Mr. Kanishke Mannakkara is the Group CEO of the AMC with over 15 years of experience in the capital markets. He has been part of the AMC since 2018 and before that has held numerous positions locally as well internationally. He holds a degree in Economics and Finance from the University of Bristol.