Siddhartha new fund offer soon

KATHMANDU, SEP 29: 

Investors, hopefully, will not have to wait longer for the much-anticipated mutual fund units as Siddhartha Mutual Fund is prepared to launch the New Fund Offer (NFO) of Siddhartha Growth Scheme I within a month.

Siddhartha Capital –– Siddhartha Mutual Fund’s fund manager and depository –– was formally inaugurated by chairman of Securities Board of Nepal (Sebon) Baburam Shrestha. 

Siddhartha Capital is a merchant banking subsidiary of Siddhartha Bank Ltd. Siddhartha Bank is also the sponsor of the first mutual fund that is going to be operated after the Mutual Fund Regulation 2067 came into existence.

“We are told that Sebon will soon approve prospectus for the scheme. If we are granted permission for NFO by next week, we will launch it before Dashain,” said CEO of Siddhartha Capital Dhurba Timilsina. The scheme is planned to be allotted and listed within one month of the NFO.

Siddhartha Capital will launch an NFO of the close-ended scheme named Siddhartha Growth Scheme I worth Rs 400 million with a five-year tenure. A unit of the scheme will be primarily priced at Rs 10 and according to the Mutual Fund Guidelines 2069, a single investor has to buy a minimum of 100 units. The units will later be listed at the stock exchange for secondary trading. 

“The fund will be worth between Rs 200 million to Rs 500 million, as regulation requires the fund manager to operate the scheme if the NFO gets subscribed by 50 per cent, and the scheme’s size can be increased by up to 25 per cent in case of oversubscription,” pointed out chief operating officer of Siddhartha Capital Mekh Bahadur Thapa.

Mutual funds pool money from investors and invest in diversified instruments providing cost-effective, yet diversified portfolio to investors at a minimum price. Due to risk diversification and professional management, mutual funds are considered to be the best investment instrument for a layperson. 

Even in the absence of financial information and skills to analyse the available information, by investing in mutual funds, investors get to dabble in the capital market at a relatively lower risk.

Source: THT