How Matured Mutual Funds Performed in Nepal: A Dividend Trend Study

Background of Mutual Funds

Mutual funds have emerged as one of the most important investment instruments in Nepal’s growing capital market. Mutual funds are managed by licensed merchant banks, while the Securities Board of Nepal (SEBON) acts as the regulator promoting and supervising the industry. Mutual funds invest in equity and other financial instruments based on strong research and analysis with the objective of providing optimal returns to retail investors while also contributing to market stability.

One of the major benefits of mutual funds is diversification. By pooling money from many investors, mutual funds invest across various sectors, companies, and financial instruments, thereby reducing overall investment risk. This helps investors avoid excessive dependence on the performance of a single company or sector. Additionally, mutual funds are managed by professional fund managers who conduct market research, portfolio analysis, and investment decisions on behalf of investors, making them suitable even for individuals with limited financial expertise.

Currently, 43 closed-end mutual funds are listed on NEPSE with different maturity periods. At the same time, four mutual fund schemes have completed issuance and are yet to be listed on NEPSE, while another scheme is currently open for issuance. On the other hand, the Nepalese stock market also has 14 open ended mutual fund schemes, commonly known among the public as SIP schemes. As of May 20, 2026, a total of 14 mutual fund schemes has matured in the Nepalese market.

For more information on matured mutual funds: Mutual Fund

These 14 matured mutual funds were managed by nine different merchant banks. Siddhartha Capital Ltd. managed SIGS1 and SEOS, Nabil Investment Banking Ltd. managed NBF1 and NEF, NMB Capital Ltd. managed NMBSF1 and NMBHF1, while LS Capital Ltd. (formerly Laxmi Capital) managed LVF1 and LEMF. Similarly, NIMB Ace Capital Ltd. (formerly NIBL Ace Capital) managed NIBSF1 and NIBLPF. Likewise, Global IME Capital Ltd. managed GIMES1, Sanima Capital Ltd. managed SAEF, Citizens Capital Ltd. managed CMF1, and NIC Asia Capital Ltd. managed NICGF.

Performance Analysis of Matured Mutual Funds

Siddhartha Investment Growth Scheme-1 (SIGS1), the first mutual fund scheme with a fund size of NPR 500 million and a maturity period of five years, delivered the highest return in Nepal’s mutual fund history. The fund distributed a total dividend of 242.20 percent, including the premium added to the refunded NAV value. On average, it provided an annual return of 48.44 percent. The scheme matured with a refund NAV of Rs. 21.77 per unit.

Siddhartha Equity Oriented Scheme (SEOS), with a fund size of NPR 1 billion and a maturity period of five years, distributed a total dividend of 68 percent. On average, the fund provided a return of 13.60 percent annually, including the premium received from the refunded NAV value.

Nabil Balanced Fund-1 (NBF1), with a fund size of NPR 750 million and a maturity period of five years, distributed 166.5 percent in dividends. The average annual dividend distribution rate stood at 33.30 percent.

Nabil Equity Fund (NEF), with a fund size of NPR 1.25 billion and a maturity period of seven years, distributed 58.70 percent in dividends. On average, the fund provided an annual return of 8.39 percent, including the premium from the refunded NAV value.

NMB Sulav Investment Fund-1 (NMBSF1), with a fund size of NPR 750 million and a maturity period of five years, distributed 84.10 percent in dividends. On average, the scheme distributed 16.82 percent dividends annually, which was close to the overall average dividend rate of matured funds.

NMB Hybrid Fund L-1 (NMBHF1), with a fund size of NPR 1 billion and a maturity period of seven years, distributed 78.5 percent in dividends. The average annual dividend payout stood at 11.15 percent.

Laxmi Value Fund-1 (LVF1), with a fund size of NPR 500 million and a maturity period of five years, distributed 70.20 percent in dividends. On average, the fund distributed 14.04 percent dividends annually.

Laxmi Equity Fund (LEMF), with a fund size of NPR 1.25 billion and a maturity period of seven years, distributed 63.65 percent in dividends. The fund provided an average annual dividend return of 9.09 percent.

NIBL Samriddhi Fund 1 (NIBSF1), with a fund size of NPR 1 billion and a maturity period of seven years, distributed 125.9 percent in dividends. The average annual dividend payout stood at 17.99 percent, which was above the overall average annual dividend rate of matured mutual funds at 17.12 percent.

NIBL Pragati Fund (NIBLPF), with a fund size of NPR 750 million and a maturity period of seven years, distributed 61 percent in dividends. However, the refund NAV value stood at Rs. 9.58, which was below the par value. As a result, the effective dividend return declined to 56.80 percent, while the average annual dividend return stood at 8.11 percent.

Global IME Samunnat Scheme 1 (GIMES1), with a fund size of NPR 1 billion and a maturity period of seven years, distributed 105.60 percent in dividends. The fund provided an average annual return of 15.09 percent. Notably, the scheme distributed dividends in only two fiscal years.

Sanima Equity Fund (SAEF), with a fund size of NPR 1.30 billion and a maturity period of seven years, distributed 122.7 percent in dividends, including the premium from the refunded NAV value. On average, the fund distributed 17.53 percent dividends annually.

Citizens Mutual Fund-1 (CMF1), with a fund size of NPR 820 million and a maturity period of seven years, distributed 84 percent in dividends. The average annual dividend distribution rate stood at 12 percent.

NIC Asia Growth Fund (NICGF), with a fund size of NPR 835.20 million and a maturity period of seven years, distributed 99.30 percent in dividends. The average annual dividend return stood at 14.19 percent.

Impact of Maturity Period

As of the review date, two categories of maturity-period mutual funds have matured in Nepal. The first category includes five-year maturity schemes. There were five such mutual funds: SIGS1, NBF1, SEOS, NMBSF1, and LVF1. These schemes delivered an average annual dividend rate of 25.25 percent. The returns were highly attractive, largely because these funds benefited from a strong bullish market cycle during their operational period.

On the other hand, the remaining nine matured mutual funds had a maturity period of seven years. These schemes generated an average annual dividend return of 12.61 percent. Compared to the five-year schemes, the seven-year schemes appeared less attractive in terms of returns. One possible reason is that these schemes experienced once a bullish and twice bearish market cycles during their tenure, which affected overall performance. Another side, Mutual funds choose more fundamentally strong and stable from price perspective. So, return seems stable.

Currently operating 7 years maturity mutual funds are expected to mature by 2030. After that period, NEPSE is likely to witness the emergence of mutual funds with maturity periods of ten years or longer.

Despite fluctuations in market performance, there remains strong optimism that currently operating mutual funds will perform better in the future and continue to provide attractive returns to their unit holders.