The Securities Board of Nepal (SEBON) has approved the application of NIC Asia Capital to issue an open-ended mutual fund.
The Board has approved the issuance of the "NIC Asia Dynamic Debt Mutual Fund" worth 5 crore units on Kartik 21. While the mutual fund schemes in Nepal invest primarily in equities, with NIBL Sahabhagita Fund investing in both equities and debt, the "NIC Asia Dynamic Debt Mutual Fund" will invest exclusively on debt instruments, i.e. debentures.
SEBON has approved the issuance of this mutual fund scheme in multiple phases. Thus, NIC Asia Capital is allowed to issue only 1.25 crore units in the first phase.
With this open-ended mutual fund scheme, the merchant bank aims to promote the ongoing efforts of different BFIs that have been issuing a number of debenture programs into the market. It also aims to minimize the risks since investments in debentures are considered more immune to drastic downfalls like in the equity market.
As of now, NIC Asia Capital manages two close-ended mutual funds: the NIC Asia Growth Fund (NICGF) and NIC ASIA Balanced Fund (NICBF). The former gave a 12% cash dividend for the fiscal year 2076/77 while the latter gave 8%.
Furthermore, "NIC Asia Select - 30", another mutual fund scheme of NIC Asia Capital is also under SEBON's preliminary review. If approved, this fund will invest in 30 debentures.