Exclusive Analysis by ShareSansar

Weekly Return of NEPSE, SIGS-1 and NBF-1

Siddhartha Investment Growth Scheme-1 (SIGS-1) paying good return, but has risky portfolio

Siddhartha Investment Growth Scheme, a Rs 500 million fund scheme set up in November 2012 by Siddhartha Capital Limited, a subsidiary of Siddhartha Bank Limited, has a SIGS-1 net asset value (NAV) growth rate that can be termed as satisfactory.

SIGS-1NAV return (8.81%) has beaten the NEPSE return (-4.87%), which indicates that this scheme is making profit even when the market is in loss. Major portion of the profit of this scheme comes from IPO investments made in Civil Bank, Commerz and Trust, NLG Insurance.

Return on IPO Investment put in Mega Bank is still to capitalize on NAV which will further increase the scheme’s NAV. Around 1,30,000 units of Mega Bank shares will be allotted to this scheme.

Lack of diversification may be the biggest drawback of this scheme. SIGS-1 scheme portfolio investment for the most part is limited to riskier assets like shares. The scheme hasn’t invested on risk-free assets like bonds, debenture, etc., which means lack of diversification of investment.

Around 5% of investments are made on illiquid sector like finance, development banks, and promoters share. These sectors are not active on NEPSE and these investments are not easily sellable in the market. This indicates the inefficiency of fund manager. If the market moves adversely, it will be very difficult to meet the projection.

Though the study reveals that this scheme is on high risk, it might be appealing for investors who are willing to take high risk for higher return.

Of the total Rs. 463.1 million investments made till date, Rs. 432.6 million has been invested in the share market and remaining on unlisted shares (IPO). Therefore, the investments are mostly concentrated on the share market only.

The scheme’s realized profit till date is Rs.24.77 million and unrealized profit is Rs.24.41 million.
 

Nabil Balance Fund’s diversified portfolio is appealing for risk-averse investors

Nabil Investment Banking, a subsidiary of Nabil Bank Limited, launched a scheme named Nabil Balance Fund-1 on March 20, 2013.

The Rs. 750 million-fund has invested Rs. 404.07 million till date of which Rs.243.45 million has been invested in share market , Rs. 64 million in debenture (Global IME, BOK, Siddhartha, Laxmi), Rs. 21.61 million in unlisted shares (Mega Bank, NLG Insurance) and remaining Rs. 75 million in fixed deposits.

Though the scheme had projected a return of 12% at the end of a year, the return stood negative (-0.30%) as of June 2013.

Nabil Balance Fund-1 scores high on diversification. The scheme covers both riskier investments (share) and risk-free investments (debenture, fixed deposits). It has a well diversified investment portfolio with only half of the investment is exposed to riskier assets. A bulk of investment has gone to the banking sector with very few money put on illiquid shares.

The scheme’s realized profit till date stands at Rs 6.85 million and unrealized profit at Rs 11.74 million.

Though the scheme’s return has stood negative so far, it would be early to make any judgment based on the return (NAV) of NBF-1 scheme.  Return of Mega Bank is still to capitalized on NAV which will further increases its NAV on coming days.

Very well managed portfolio diversification means NBF-1 is a really good investment for risk-averter investors.