‘Alpha Plus’, Sri Lanka’s first dual return investment plan, is now available to investors as a result of a partnership between Alliance Finance PLC (AFC) and Guardian Acuity Asset Management (GAAM), a leading unit trust management company which is part of Carson Cumberbatch PLC, HNB and DFCC banks.
“Alpha Plus is a dual return investment plan, where plan funds are invested in both fixed deposits and in equity, thereby giving investors exposure to returns of two asset classes, with a single investment. The recommended mix of investment being 70 percent in fixed deposits and 30 percent in equity,” explained GAAM Fund Manager Asanka Jayasekara.
A dual return enables the investor to benefit from both fixed deposits as well as equity funds as the investment plan invests in both fixed deposits and equity, hence the return to investors will stem from these two sources, making it a dual return investment plan.
When an investor invests money in the Alpha Plus plan, a fixed deposit (FD) will be opened with Alliance Finance with a portion of the money and the balance will be allocated towards the ‘Guardian Acuity Equity Fund’, which will be managed by a specialized fund manager.
“The recommended investment plan is to invest a minimum of Rs.2.5 million for a period of three years, with an investment mix of fixed income of 70 percent and equity 30 percent. However, although this is the recommended mix, the plan is flexible to suit an individual’s risk/return profile. Alpha Plus was initiated with the objective to create an opportunity for customers to yield a better return for their investments in the capital market in line with Alliance Finance’s triple bottom line concept,” said Alliance Finance Company PLC Chief Operations Officer Emmanuel Muttupulle.
The benefits of investing in Alpha Plus include a potential higher return, stemming from attractive FD rates (based on the rates offered for AFC deposits) and equity returns (based on the performance of GAAM equity unit trust portfolio), while the investment will be in the hands of skilled professionals who have a long-term proven track record to their credit. Investors will also have the opportunity to diversify their investment portfolio, while having a hassle-free investment experience with regular updates on returns, as well as a tax-efficient investment given that unit trust returns are tax free in the hands of unit holders. The FD can be used as a source of income with interest withdrawals or the interest can be retained along with the equity investment to add to capital appreciation.
“Alpha Plus is open to both corporates and individuals who seek a long-term exposure to the equity markets while at the same time enjoy a guaranteed long-term fixed deposit return,” said Guardian Acuity Manager Business Development Roshan Fernando, who is responsible for servicing the Alliance Finance clientele.
“While we recommend that investors stay invested for the entire period to earn the maximum benefit from equity investments, investors always have the options for early withdrawals from both the FD and the equity investment in case they have an unforeseen cash requirement. A 2 percent early withdrawal fee will be charged if investors pull out their money from the equity fund before the end of the first year of the investment but otherwise we have no front end or exit fees,” he further said.
Although early redemption is not recommended since the equity returns can be volatile. “Furthermore, the returns from the equity fund are tax free in the hands of the investor,” he noted.
The investment processes is made easy with the product available in select branches of Alliance Finance and investors can also contact their relevant relationship manager.