Siddhartha Mutual Fund issue closes

KATHMANDU, DEC 05: 

Siddhartha Mutual Fund’s New Fund Offer (NFO) of Siddhartha Investment Growth Scheme I closed today.

“As of yesterday, we have received applications for more than 34 million units in six days and the report for the last day is yet to come,” said chief executive of Siddhartha Capital Dhurba Timilsina, adding that Siddhartha Capital as a fund manager has to put Rs 60 million as seed capital of the fund.

Siddhartha Capital –– a merchant banking subsidiary of Siddhartha Bank Ltd –– had launched the NFO of the close ended scheme named Siddhartha Investment Growth Scheme I worth Rs 400 million with a five-year tenure on November 27. One unit of the scheme has been primarily priced at Rs 10.

According to Timilsina, upcoming mutual funds, merchant bankers, financial institutions and insurance companies have purchased the units. 

“Individual participation has also been good. Even people in remote areas have purchased units,” he added. 

Siddhartha Capital is planning to allot the fund units to the applicants within a month of the closing of the issue. The units will later be listed at Nepal Stock Exchange for secondary trading. 

The mutual fund has estimated to offer eight per cent dividend to unit holders in the first year and increase the amount in subsequent years to up to 13 per cent till the end of the tenure, but it can change depending on market conditions.

Mutual funds are supposed to be one of the best investment instruments as it is cost efficient and easy to invest in, as the investor does not have to figure out which stock or bond to buy. Since experts manage the fund’s investment, even a layperson who knows nothing about finance can earn substantial returns. That is one of the reasons why mutual funds are considered to be a relatively less risky investment option.

Moreover, mutual funds are also supposed to bring stability in the stock market.

Source: THT