Open-ended mutual funds, a new financial weapon in Nepali capital market; SEBON states the specialties of an open-ended fund

In a press statement issued today by Securities Board of Nepal (SEBON), the board has informed that in order to promote open-ended mutual fund schemes, they have granted approval to one mutual fund manager. The first scheme will be having a corpus of Rs 50 crore and in the first phase, a total of 12.50 crore units will be floated for the general public.

The Mutual Fund regulations had been formulated since 2067 BS, but till now only closed-ended mutual funds were floated. Till date, a total of 17 closed-ended mutual funds have entered market worth Rs 16 arba. The various specialties of open-ended mutual funds are:

1. It will not be listed in Nepal Stock Exchange (NEPSE), rather the fund manager will be buying and selling the units based on Net Assets Value (NAV)
2. Investors can freely buy and sell the shares of an open-ended mutual fund from the fund manager
3. The open-ended fund doesn't have a specified maturity date
4. The investors won't have to incur any entry load to purchase the mutual fund shares
5. You can buy a minimum of 1000 units and the per unit par value is Rs 10
6. The fund size can increase based on the demand of investors or a new scheme can also be introduced

The board believes that, with the introduction of Open-ended mutual funds, the investors will have a new avenue to invest and diversify their portfolio. In addition, it will also expand the horizon of the Nepali capital market by taking us one step further.