"Sanima Large Cap Fund" will be open for application from Magh 09. It is a mutual fund promoted by Sanima Bank and managed by Sanima Capital. 10 crores units worth Rs. 1 Arba will be issued at a par value of Rs. 10 per unit.
15% of the total issue is reserved for fund promoter Sanima Bank and issue manager Sanima Capital. The remaining units will be issued. "Sanima Large Cap Fund" is a close-ended fund, meaning it can be traded in NEPSE. Furthermore, the fund will mature 7 years after allotment.
The Securities Board of Nepal (SEBON) has already approved the issuance of the "Sanima Large Cap Fund". The early closing date is on Magh 13. If the issue is not fully subscribed till then, the deadline can be extended to Magh 26.
Mutual funds are comparatively safer investment vehicles. They may prove highly profitable for beginners who want to reap the benefits of the stock market without putting in the required effort while investing themselves. Furthermore, mutual funds are great entry options for beginners to test the water while they are learning a strategy of their own.
Although mutual funds are not 100% safe, they certainly hedge the inevitable risks in the securities market. Mutual funds are required to diversify their portfolio by law. Since a significant volume of new investors has entered the stock market in the recent IPO boom and NEPSE's bullish rise, mutual funds may be of interest to them.
While writing this article, a handful of mutual funds with a combined worth of Rs. 5.4 Arba is in SEBON's pipeline. They will be open for application to the general public someday soon. If investors can contribute the much-needed capital via these funds, the country as a whole can utilize this fund for the advancement of the economy. Needless to say, the investors who put their capital will be rewarded with profits.