Ceylon IPO Fund

Attempting to encourage retail investors cashing in on the increasing number of Initial Public Offering (IPO) listings on the Colombo Stock Exchange (CSE), Ceylon Asset Management yesterday launched the Ceylon IPO Fund.

Aiming to take advantage of the large number of IPOs and the regulations of the Securities and Exchange Commission (SEC) that have reserved 10% of each IPO for unit trusts, the new fund aims to encourage retail investors towards long-term commitments in the CSE.

http://www.ft.lk/2011/06/22/first-ever-ceylon-ipo-fund-to-hook-retail-investors-to-cse/


Fee Structure

Front end fee 2%.
Management fee of 1% per annum. Plus an additional 1/20 of the net return charged quarterly.
Exit fee of 1% for redemptions within six (06) months of investing. For exits after 06 months of investing, an exit fee will not be charged.

duke wrote:Attempting to encourage retail investors cashing in on the increasing number of Initial Public Offering (IPO) listings on the Colombo Stock Exchange (CSE), Ceylon Asset Management yesterday launched the Ceylon IPO Fund.

Aiming to take advantage of the large number of IPOs and the regulations of the Securities and Exchange Commission (SEC) that have reserved 10% of each IPO for unit trusts, the new fund aims to encourage retail investors towards long-term commitments in the CSE.

http://www.ft.lk/2011/06/22/first-ever-ceylon-ipo-fund-to-hook-retail-investors-to-cse/


Fee Structure

Front end fee 2%.
Management fee of 1% per annum. Plus an additional 1/20 of the net return charged quarterly.
Exit fee of 1% for redemptions within six (06) months of investing. For exits after 06 months of investing, an exit fee will not be charged.

Might be a good one for the patient investor.

duke wrote:Attempting to encourage retail investors cashing in on the increasing number of Initial Public Offering (IPO) listings on the Colombo Stock Exchange (CSE), Ceylon Asset Management yesterday launched the Ceylon IPO Fund.

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I had very bad experience with the above company . I invested in ceylon financial sector fund last year launched by the above company. After keeping my money in the fund for months, Sold all the units on a Green day and managed to recover the capital. I would not invest with them again.

Looking at the fee structure it looks very profitable for the management of the fund running on investors' money. Investors will probably get nothing.

milanka wrote:

duke wrote:Attempting to encourage retail investors cashing in on the increasing number of Initial Public Offering (IPO) listings on the Colombo Stock Exchange (CSE), Ceylon Asset Management yesterday launched the Ceylon IPO Fund.

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I had very bad experience with the above company . I invested in ceylon financial sector fund last year launched by the above company. After keeping my money in the fund for months, Sold all the units on a Green day and managed to recover the capital. I would not invest with them again.

Milanka,
I beleive they did well during 2009 -2010. But that was during time when everything went up. Now no harm be extra cautious with our investments due to the nature of the market.

I believe that the Ceylon IPO Fund is a unique balanced fund that saves investors from the hazzle of applying for each IPO one by one. If the Management Company can get the Unit Trust allocation granted by SEC for each IPO, it will be excellent. I too believe that the funds did well in 2009 and 2010. From October 2010, the market was down and I think that they launched the Financial Sector Fund in November and that is bad timing in general.

In 2009, 2010 even if you invested in a demolished hotel or even just having a stock symbol you would have earned double or triple or more.
These people's charges are very high. 3% at the start and 5% from your profits every quarter. And just for an IPO fund?

above charges for per annum as i know , Ceylon IPO fund more profitable to investor with the higher oversubscribe even you have to pay 1% of annual charges+ additional performance fee of 1/20th (5%, because 15% of your investment will be allocated for your investment and balance will be invest in short term fixed income securities at rate of 7% (minimum investment rate).

and balance amount will be rollover for next IPO

As a satisfied customer of Ceylon Asset Management, I have to correct some of the opinions expressed here. They charge the lowest fees in the entire Unit Trust industry.
The Ceylon IPO fund is a smart fund, where our capital is safe fund being invested in T Bills, and only invest in winning IPOs. I thought this is very safe due to declining stock market these days.
Main advantage of Ceylon IPO Fund is with heavily oversubscribed IPOs where, investors get a small amount of allocation, while Unit Trusts are entitled to 10% of any IPO allocation. So investors can get a bigger allocation, if an IPO is oversubscribed.
The annual fee charged is only 1% per annum plus an additional performance fee of 1/20th (5%)of my net return, only if I make money first. The 2% charge is a once only fee at entry point.
Its great concept perfect for current mkt conditions. Also saves the hassle of investing for each IPO, that seems to be coming almost weekly these days.
Each investor can make their own personal judgment. This is my experience.

fingihan wrote: because 15% of your investment will be allocated for your investment and balance will be invest in short term fixed income securities at rate of 7% (minimum investment rate).
and balance amount will be rollover for next IPO

1) Can you explain this ' because 15% of your investment will be allocated for your investment'

2) And the rest in short term fixed income? How do they put it in fixed income if they need to get them out suddenly for future IPOs?

duke wrote:

fingihan wrote: because 15% of your investment will be allocated for your investment and balance will be invest in short term fixed income securities at rate of 7% (minimum investment rate).
and balance amount will be rollover for next IPO

1) Can you explain this ' because 15% of your investment will be allocated for your investment'

2) And the rest in short term fixed income? How do they put it in fixed income if they need to get them out suddenly for future IPOs?

always better to get details straight from the horse's mouth
http://www.ceylonassetmanagement.com/index.php?page_id=26&fund=ipo

and
http://www.ceylonassetmanagement.com/IPO%20Low%20res.pdf

innam wrote:

duke wrote:

fingihan wrote: because 15% of your investment will be allocated for your investment and balance will be invest in short term fixed income securities at rate of 7% (minimum investment rate).
and balance amount will be rollover for next IPO

1) Can you explain this ' because 15% of your investment will be allocated for your investment'

2) And the rest in short term fixed income? How do they put it in fixed income if they need to get them out suddenly for future IPOs?

always better to get details straight from the horse's mouth
http://www.ceylonassetmanagement.com/index.php?page_id=26&fund=ipo

and
http://www.ceylonassetmanagement.com/IPO%20Low%20res.pdf

As i know, according to the unit trust law, any unit trust company can invest only 15% 0f its Net Asset Value, i think thats why they allocate 15% of your money in one IPO and rest of the amount will invest in ST fixed income securities until next IPO ( your investment will be rollover for next IPOs) come.