Equity Market Investing – How a unit trust can help?

Investing in the stock market can be confusing at best and for beginners even more so. It’s an important decision with long-term consequences, and everybody seems to have an opinion on the best approach. This is when investors can benefit from a proficient fund manager. The JB Vantage Value Equity Fund was set up with the intention of sharing equity management expertise with the average investor. Many novice investors have benefited from the fund’s focus on disciplined investing. 

The JB Vantage Value Equity Fund provides the average investor with an easy way to get started investing in the equity markets. In one step they get access to a basket of around 16 – 18 shares picked based on value investing principles. Value investing is long-term capital appreciation through patient investing in shares of companies expected to have strong growth potential not reflected in their trading price.

Value investing was begun by Benjamin Graham an influential investor whose research in securities laid the groundwork for in-depth fundamental valuation used in stock analysis today. Known as the “Father of value investing” his theories are currently popularized by such respected investors as Warren Buffet and Peter Lynch.

Warren Buffett in a letter to his Berkshire Hathaway shareholders in 2008 says “Long ago Ben Graham taught me that price is what you pay, value is what you get. Whether we are talking about socks or stocks I like buying quality merchandise when it is marked down.”  He went on to say in a later year “if a business does well, the stock eventually follows”. Like Warren Buffet, the JB Vantage Value Equity Fund values the hard work of deep dive research and waiting for the right price to buy at. 

JB Vantage’s Value Equity Fund is the largest pure equity fund in the Sri Lankan market, aiming to maintain over 90% of its holdings in equities. Since its inception in May 2012, the fund has brought in the largest rupee amount to the Colombo Stock Exchange from retail investors and has Rs. 2.14 billion in assets as of end of March 2021. Aside from the latest gold win at the CFA Sri Lanka Capital Market Awards, the JB Vantage Value Equity Fund has been recognised at by CFA Sri Lanka when they won at the inaugural awards in 2016 a Bronze award and Silver in 2019. JB Vantage unit trusts have been proud gold winners at three of the five Best Unit Trust Award ceremonies.

Christine Dias Bandaranaike, CEO of JB Financial shared some advice on making wise equity investments: 

  1. Commit to allocating 20% of your total investment portfolio to equity investments. Investing through an equity unit trust is honestly the most trouble free way to make this happen. 
  2. Invest a set amount regularly into your equity unit trust. As the equity markets fluctuate your average cost on your purchases will fall, as you buy fewer units when markets are high and more units as they fall. This is known as “dollar cost averaging”. This can be done easily using a bank monthly standing order.
  3. Review your investment portfolio annually but with a mindset to remain invested for the long run. As Warren Buffet once said “The stock market is designed to transfer money from the active to the patient”. The real value of companies can be seen with time.  Patience is key in equity investing. 

She further added, “Right now, given the low level of interest rates in the market, diversification and allocation to equity is more relevant than ever to investors as they seek better growth opportunities for their savings”. 

The JB Vantage Value Equity Fund is an excellent way to get started investing in equities. For more information on the facilities available call them on +94 11 249 0900 or email info.financial@jb.lk.