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The need for investor education about risk-taking and Unit Trusts

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Jeevan Sukumaran

Interview with Jeevan Sukumaran, Secretary, Unit Trust Association, Sri Lanka

What does “risk” really mean in investing, and why should the public not be afraid of it?

At the mention of the word risk in terms of investing, especially in a Sri Lankan context, there can be a significant level of fear or stigma attached to it. To some degree, this is fair given the country’s history of civil war, investment company scams (such as Golden Key/Ceylinco and Sakvithi and in more recent times, the Easter Attacks, Covid and the Economic crisis. This has led to a large majority of potential investors being afraid to venture very far beyond commercial banking products and, therefore, losing out on the earnings potential of other asset classes.

In investing, risk means the possibility that the value of your investment might go up or down and not a guarantee of loss, but more a chance of fluctuation. For example, share prices rise and fall all the time. While those movements may look worrying in the short term, history shows that markets generally grow in the long run. As such, investors shouldn’t necessarily fear risk, but should instead understand the different types of risk (both in general and based on the asset class) as well as risk’s relationship to return.

What are the main types of risks (market, credit, liquidity) that investors should understand?

Several different types of risks affect investors in terms of capital markets (and unit trusts); however these can be classified into direct and indirect risks. The three most direct risk types that can affect investors are;

Market Risk – The broadest form of risk, which can be further subclassified into systematic and unsystematic risks. Systematic risks are high (macro) level risks that tend to affect the entire economy as a whole and are harder to diversify if all investments are within the country. Examples in Sri Lanka would be the Economic Crisis of 2022 with high inflation, currency depreciation, and political instability. Entire markets were affected, with even well-run and profitable companies seeing downturns. Unsystematic risks are connected to specific sectors/industries/companies that are affected by an industry/sector/company-specific issue and can be reduced through diversification. Examples of this could be the export sector being negatively impacted by tariffs.

Credit Risks – Credit risk is the risk that arises due to a counterparty being unable to meet their obligations on time or at a lower than agreed yield or not being able to settle at all (default risk). To a large extent, reports from rating agencies such as Fitch and Lanka Ratings will enable potential investors to gauge the level of credit risk they could potentially face by investing in a specific company/instrument. This, coupled with investing in companies with strong corporate governance, clear transparency and strong regulatory oversight, will enable investors to reduce their exposure to credit risk.

Liquidity Risk – deal with how easily investments can be turned into cash. Market liquidity risk appears when assets cannot be sold quickly at a fair price, which often happens in stressed or thinly traded markets. Funding liquidity risk is slightly different: it is the danger that an investor or institution cannot meet short-term payment or redemption obligations, even if they hold valuable assets. Both forms of liquidity risk can amplify market shocks, making them especially important to watch during times of financial stress.

Secondary or indirect risks may not be visible daily, but can amplify core risks. Operational risks include failures in systems, processes, or people, as well as fraud, compliance breaches, or cyberattacks. Event and external risks stem from political changes, regulatory shifts, wars, sanctions, natural disasters, or climate events. Behavioural risks arise from investor psychology, such as overreaction, herd behaviour, speculative bubbles, or reliance on flawed models. Instrument-specific risks relate to specific products, including reinvestment or prepayment risk for bonds, concentration risk from overexposure to one asset or sector, leverage and derivatives risk that magnifies gains and losses, and custody risk where assets held by a custodian could be lost.

How do Unit Trusts help reduce or balance these risks through diversification, and what safeguards are in place to help protect investors?

There are three main ways in which Unit Trust Investments help reduce/balance risk.

Diversification – Unit trusts enable investors to diversify their investments across various assets, reducing the risk associated with putting all their eggs in one basket. This can be particularly beneficial for smaller investors who may not have the capital to build a diversified portfolio on their own. By spreading investments across different sectors, companies, and asset classes, unit trusts can help mitigate the impact of poor performance in any single investment.

Regulatory Protection – Capital market regulators set rules on how Unit Trusts must operate. These include requirements for transparency, reporting, and fair treatment of investors. Unit Trusts are heavily regulated by the Securities & Exchange Commission of Sri Lanka with strict rules and regulations (CIS Code) governing investments and fund operations. In addition, all assets of the fund are held by and invested through an independently appointed Trustee whose responsibility is to safeguard the unitholders’ funds and prevent misappropriation.

Professional Fund Management – Managed by experienced (and SEC-approved) fund management professionals and backed by dedicated research/financial analysts. Advantageous to investors who may not have the time, resources or expertise to monitor global, macro and micro conditions regularly.

How can investors identify their personal risk appetite before choosing a fund?

Investors first need to understand the different risks applicable to different asset classes clearly. As such, knowledge of the various asset classes and the risks that can affect those assets is the most crucial step for an investor. After this point, the investor should identify their own risk appetite and how much of a risk taker they are (from conservative to aggressive). This should also be coupled with their investment horizon and both short- and long-term liquidity requirements.

What types of Unit Trusts are best suited for conservative, balanced, or aggressive investors?

Conservative investors – Money market funds or government security-based funds. These fund types are generally low risk and offer high liquidity whilst offering steady, regular returns.

Balanced – Longer-term Income/Bond/Corporate Funds as well as Balanced funds (Equity and Fixed Income). These funds offer better returns whilst attempting to reduce significant volatility and capital erosion.

Aggressive investors: Growth/ Equity funds/Sector Funds, which invest mainly in listed equities. Given the nature of the stock market, higher volatility is to be expected; however, significantly higher returns can also be obtained.

6. Why is investor education about risk essential for building long-term confidence in Unit Trusts?

Investor education about risk is essential because it transforms fear into informed decision-making. Many people avoid investing simply because they don’t understand how risk works, or they overreact to short-term market fluctuations. By learning about different types of risk, investors can gain a realistic view of what to expect and/or how to respond.

Education also helps investors understand how Unit Trusts mitigate risk through diversification, professional management, and regulatory safeguards. Knowing that their money is being managed according to clear rules and spread across multiple assets gives investors confidence that short-term volatility is normal and manageable.

Finally, educated investors are more likely to stick to their long-term investment plan instead of making impulsive decisions during market swings. This discipline is key to benefiting from the compounding effect of investments over time and achieving financial goals. In short, risk education builds trust, reduces anxiety, and empowers investors to make smarter, more confident investment choices in Unit Trusts.



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UNDP, together with partners, brings together immersive insight into the cruel realities of SGBV

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UNDP 16 Days of Activism against Gender Based Violence held at the Sri Lanka Foundation.

The 16 Days of Activism Against Gender-Based Violence is a global campaign observed annually from 25 November to 10 December, beginning on the International Day for the Elimination of Violence against Women and concluding on Human Rights Day. The campaign aims to raise awareness and inspire collective action to end all forms of violence against women and girls.

This year, in line with this, the United Nations Development Programme (UNDP), together with its key partners through ongoing flagship project initiatives, is taking a unique, never-before-seen approach to advocacy. ‘Through Her Eyes,

wef.aoEiska, அவளின் பார்வையில்’ narrates the heart-wrenching journey of ‘Sara’ in her search for justice through multi-medium storytelling that merges stage theatre, film and creative audio production techniques.

‘Through her eyes’ is in line with three UNDP Sri Lanka projects; Enabling Access to Justice for Victim-Survivors of SGBV in Sri Lanka funded by the Government of Canada and implemented together with UNFPA Sri Lanka; the Support to Justice Sector Project (JURE) funded by the European Union in partnership with the Ministry of Justice, and implemented together with UNICEF Sri Lanka; and the Action and Anticipation for The New Agenda for Peace (AAA) supported through UNDP’s Funding Windows with funding from the Governments of Denmark, Luxembourg and the Republic of Korea.

Commenting on the timeliness of such public activations, Azusa Kubota, Resident Representative, UNDP in Sri Lanka, stated, “As the country recovers from one of its worst natural disasters in its recent history, the focus on gender equality, inclusion, and structural change is more vital than ever. We all know SGBV leaves a deep scar in survivors, those around them and the society they live in. Yet, do we really know what it is like to live through that experience? In a crisis, how do we address root causes of SGBV that get exacerbated? We wanted to mark this year’s 16 days differently – by creating an experience where we, irrespective of our gender, culture, and all other differences, put ourselves in the shoes of those who live through the pain and hardships, and collectively think through ways in which we can tackle persistent challenges confronted by many. Our advocacy efforts aspire towards a nation and world free from SGBV- to achieve gender equality and empower. ‘Through Her eyes’ is a unique experience that is designed to bring this issue in front of a broad demographic audience, by bringing together stakeholders from across the Government, private sector, development partners, youth and CSOs, as we stand together to end SGBV and support Sri Lanka to build back better.”

Sharing the perspective from the Government of Sri Lanka, Minister of Justice Harshana Nanayakkara commented, “Through Her Eyes’ invites us to pause and truly understand the lived realities of survivors. It is a powerful reminder that every survivor who comes forward does so with immense courage. Their pathway to justice must be dignified, safe and free from fear. Ensuring the safety and empowerment of women and girls is not a task that can be achieved in isolation. A holistic approach is vital. Law enforcement, the judiciary, health services, social services, educators, civil society, the private sector and communities must stand together as allies.”

As a key partner, Kiril Iordanov, Head of Cooperation at the High Commission of Canada noted, “Addressing GBV is a shared responsibility. Canada continues to collaborate with partners to design and champion innovative solutions. Our approach is rooted in the belief that promoting gender equality and empowering women and girls has a multiplier effect on development. By placing women and girls at the centre, we contribute to building a more peaceful, inclusive, and prosperous world.”

The Safe Space of this immersive production also highlights the support and work being carried out by the projects, to support better access for justice for victim-survivors of SGBV, capacity building for relevant public sector institutions, media ethics when reporting SGBV and the promotion of male allyship and bystander intervention as a mechanism to eradicate SGBV in Sri Lanka.

Highlighting the priorities of the European Union, Carmen Moreno, Ambassador of the European Union to Sri Lanka and the Maldives, commented, “Gender-based violence endures when access to justice is made difficult by fear, stigma or indifference. This exhibition invites us to understand the experience through the eyes of the victim, and it forces us to question—and dismantle—the barriers that allow violence to continue without consequences. Justice systems Justice systems must act with determination in confronting this problem, but they cannot do so in isolation. Real change requires a society that supports women, recognises the realities of gender-based violence, and refuses to look away.”

In light of the current situation of the country, the event also hosted an interactive dialogue on the theme ‘Delivering Economic Independence for Survivors of Sexual and Gender-based Violence during Crises’ on the sidelines of the event. With participation from key individuals, including the Government, development partners, private sector leaders, civil society organisations and youth groups, the dialogue looked at key areas of Gender-responsive and intersectional crisis planning; protection, safety, and justice built into disaster preparedness and humanitarian response; safeguarding shelter design, ensuring access to health and reproductive services, psychosocial support, and safe reporting mechanisms.

The campaign aims to raise awareness and inspire collective action to end all forms of violence against women and girls. It calls on governments, organisations, and individuals to challenge harmful gender norms, support survivors, and demand accountability from perpetrators.

‘Through Her Eyes, wef.aoEiska, அவளின் பார்வையில்’ is open to the public from the 2nd to 7th of December from 10 AM to 7 PM at the Sri Lanka Foundation Institute.

To know more and engage in the immersive experience: https://go.undp.org/through-her-eyes

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Outstanding AI & Fintech Governance Leadership Award 2025 for Sopnendu Mohanty

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Asian Digital Finance Forum and Awards Convener and Global Fintech Institute (Singapore) Industry Fellow Rajkumar Kanagasingam (left) presents the award to Sopnendu Mohanty during the GFTN Insights Forum held in conjunction with the Singapore FinTech Festival 2025 at Marina Bay Sands, Singapore.

Sopnendu Mohanty, former Chief FinTech Officer of the Monetary Authority of Singapore (MAS) and current Group CEO of the Global Finance & Technology Network (GFTN), has received the Outstanding AI & Fintech Governance Leadership Award 2025 for his global contribution to responsible fintech advancement, cross-border policy innovation, and AI governance.

While the recognition was announced at the Asian Digital Finance Forum & Awards held at Port City Colombo, the formal handing-over ceremony was held recently in Singapore, during the GFTN Insights Forum that took place in parallel with the Singapore FinTech Festival 2025 at Marina Bay Sands Expo & Convention Centre.

Presenting the award, Rajkumar Kanagasingam, Convener of the Asian Digital Finance Forum & Awards and Industry Fellow of the Global Fintech Institute (Singapore), lauded Mohanty’s unique global impact.

“Sopnendu has set global benchmarks in innovation-friendly regulation, Kanagasingam said.

“From cross-border payment connectivity to AI ethics and multi-CBDC frameworks, his leadership has not only shaped Singapore’s fintech ecosystem but has helped entire regions transition into the digital economy responsibly.”

He added that Mohanty’s strategic influence continues beyond regulatory leadership.

“His ability to galvanise central banks, policymakers and innovators onto common platforms is rare. What he built in Singapore is now influencing multiple jurisdictions, and that continuity through GFTN is immensely valuable.”

Serving from 2015 to 2025 as MAS’s inaugural Chief FinTech Officer, Mohanty is widely acknowledged for transforming Singapore into one of the most forward-looking and trusted digital finance environments.

Mohanty has also endorsed Sri Lanka’s initiative to shape the Colombo International Financial Centre (CIFC) at Port City Colombo as a South Asian fintech gateway. He was presented with an interim policy blueprint during the DigiEcon Global Investment Summit.

By Ifham Nizam

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Sales team of Maliban Group triumphs at SLIM National Sales Awards 2025

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(From left to right) Andra Baduge Chathuranga Lakmal (Area Sales Manager), L. H. T. Madushan (Front Liner), A. L. Lashan Priyadarshana (Sales Executive), Madagedara Tharanga Manoj Kumara (Sales Executive), M. G. D. M. Bandara (Sales Executive), Dayan Pandithasekara (Group Head of Sales), Hetti Arachchige Kapila Sanjeewa (Sales Executive), M. K. Dilan Sanjaya (Area Sales Manager), H. T. N. Priyadarshana (Sales Support Executive), and Koonara Mudiyanselage Lahiru Sampath Bandara (Front Liner).

The Maliban Group Sales Team emerged among the distinguished winners at the SLIM National Sales Awards 2025, reaffirming the Group’s leadership in sales excellence and its enduring commitment to performance, innovation, and teamwork.

Recognized for their exceptional results during the 2024/25 financial year, the Maliban Sales Team’s achievement reflects the Group’s dynamic approach to market development and its ability to sustain strong growth across highly competitive product categories. The win stands as a testament to Maliban’s continued focus on people, process, and purpose the three pillars driving its success story over eight decades.

Organized by the Sri Lanka Institute of Marketing (SLIM), the National Sales Awards (NSA) is the country’s most prestigious platform dedicated to recognizing excellence in sales and marketing. NSA is known for its rigorous evaluation process that selects the elite from among the best, celebrating professionals and organizations who set new standards for performance, leadership, and innovation in Sri Lanka’s corporate landscape. To be recognized at NSA is not only a mark of achievement but also of distinction, earned through consistency, strategy, and excellence in execution.

This year’s recognition holds special significance for the Group, as Maliban Biscuits, Maliban Milk, and Little Lion competed together as a unified team after several years, marking a powerful return celebrated with multiple accolades. The success reflects the synergy and shared vision across Maliban’s diversified business units, strengthening the brand’s position as a trusted name in both local and international markets.

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