Know the current scenario of mutual funds in Nepal and see which of them are being traded at discount and premium
- ShareSansar, February 22, 2017 on Company Analysis , Exclusive , Featured , Financial Analysis , Latest , Stock Market
Mutual fund is a type of professionally-managed investment fund that pools money from investors to purchase securities. The collected fund is then invested in financial instruments such as stocks, Bonds/Debentures, Government Securities, and Fixed Deposits (as prescribed by Mutual Fund Regulation, 2067).
Currently, there are 10 mutual funds in Nepal with Rs 8.50 arba as their total initial fund. All of these mutual funds are closed-end, which means they require broker to buy and sell (unlike open ended that can be purchased directly through the fund provider). 4 out of the 10 mutual funds have maturity period of 7 years, whereas rest of them have life of 5 years.
Siddhartha Investment Growth Scheme-1 and Nabil Balance Fund-1 have the highest NAV (Net Asset Value) and will mature in about 1-year time period.Both of them have a NAV of above Rs20, as of 17th February 2017.
Out of those 10 mutual funds, NIBL Pragati Fund has not been listed yet whereas Nabil Equity Fund was listed recently (traded from 1st February, 2017).
As of 17th February 2017, NMB Sulav Investment Fund-1 was traded at a hefty discount of 35.45%, followed by Nabil Balance Fund-1 with a discount of 28.39%. Siddhartha Equity Oriented Scheme (SEOS) is traded at a discount of 21.74%.Nabil Equity Fund and Global IME Samunnat Scheme-1 were traded at a premium price.
Since mutual funds are considered safe due to their diversified investment, it is better to have some mutual fund units in one’s portfolio. Investors should opt for those mutual funds whose market price is much lower than their NAVs.