Investment Policy Statement


The purpose of this Investment Policy Statement is to establish a clear understanding between the investors of Serendib Growth Investment Ltd (SGIL) and Kenanga Investment Corporation Ltd (KICL), portfolio manager to SGIL, as to the investment objectives and policies applicable to the Serendib Growth Investment Ltd.

This Statement Will

  • Establish reasonable expectations, objectives, and guidelines in the investment of the SGIL’s portfolio of assets.
  • Set forth an investment structure detailing permitted assets, normal allocations and permissible ranges of exposure for the SIGL’s assets.
  • Establish effective communication between the Investors and the portfolio manager.
  • Create the framework for a well diversified portfolio mix that can be expected to generate acceptable long term returns at a level of risk suitable to SGIL.

This Statement has been developed from an evaluation of many key factors which impact the investor’s specific situation and investment objectives. This Statement is not a contract. It is intended to be a summary of an investment philosophy that provides guidance for the Investors of SGIL and the portfolio manager, KICL.

Serendib Growth Investment Ltd Investment Objective

The main investment objective of Serendib Growth Investment Ltd (SGIL) is to seek long term capital appreciation through investing in companies listed in Colombo Stock Exchange (CSE) representing growth sectors of the Sri Lankan economy.

Serendib Growth Investment Ltd Portfolio of Assets

The Investor recognizes that the objectives of the portfolio cannot be achieved without incurring a certain amount of principal volatility because the portfolio of assets will invest exclusively in growth shares listed in the CSE.

Following risk mitigation factors will be followed by the portfolio managers to ensure long term stable growth of the portfolio of SGIL assets.

At any given time, SGIL assets will have following maximum investment exposure limits and investment controls:

  • Will invest only in shares listed in CSE
  • 5% of the total assets will not be invested on a one single share
  • 20% of the total assets will not be invested on a one single sector
  • Will not invest more than 10% in any one company’s issued share capital
  • Will not make investments for the purpose of gaining management control of a company

KICL, the portfolio manager to the portfolio of SGIL assets, will apply sound investment management techniques and methods, which centers on the fine balance between long term capital growth and growing it responsibly.

No guarantees are given about future performance and this statement shall not be construed as offering such guarantee.

Serendib Growth Investment Ltd Equity Selection Criteria

The main objectives of SGIL equity selection criteria are to:

  1. Maximize the total return on investment (stock appreciation plus any dividends received) for the targeted holding period.
  2. Limit risk (according to SGIL’s risk tolerance level).
  3. Maintain an appropriate degrees of portfolio diversification.

Kenanga Investment Corporation Ltd, the portfolio managers to the company, will conduct through macro economic research to identify economic sectors with medium to long term growth potential.

Once these sectors are identified, KICL will conduct in-detail due diligence to select companies that are exposed to these sectors with excellent business models and sound management.

Finally individual stock lists representing each growth sector will be developed for the investment management purpose of SGIL portfolio of assets.