Siddhartha’s new mutual fund within June, NIBL’s scheme, too, expected soon

ShareSansar, June 10:

Months of wait for new mutual funds is finally getting over.

A new close-ended equity-oriented scheme worth Rs 80 crore of Siddhartha Capital Limited will hit the market in June itself.

“We are expecting the final approval from SEBON within a day or two,” Siddhartha Capital’s Chief Executive Officer Dhurba Timilsina told ShareSansar today. “We are planning to issue the mutual fund within this fiscal year.”

The five-year mutual fund has been named Siddhartha Equity Oriented Scheme (SEOS), he added.

He further informed that SEOS will target 70 percent equity market, 25 percent bond market and only 5 percent liquidity management.

Asked why did they opt for an equity oriented scheme this time unlike their first scheme, Siddhartha Investment Growth Scheme-I or SIGS-I, he said that equity -oriented scheme was brought initially since the capital market is no longer undervalued and equity market is also growing.

NIBL Capital is also seeking approval to float a closed-end seven year scheme that comes to the tune of Rs 80 crore at the earliest.

"We will be launching our first Mutual Fund called Sambriddhi Fund-I close end, equity oriented fund of the size of Rs 80 crores very soon," a highly placed official with NIBL Capital said today. "We recently received Fund Management Quality Rating of AMC Quality 3 from ICRA Nepal, and are now only awaiting for the final approval from SEBON, which we are expecting to receive very soon."

So far a mutual fund each launched by the merchant bankers of Nabil and Siddhartha Banks are the only two such schemes in the market.

With the upcoming budget expected to announce some measures to further promote the mutual funds, the market has also been abuzz about a five-year mutual fund to be launched by NMB Capital Limited called NMB Sulabh Investment Fund worth Rs 60 crore.

The merchant banking arms of Laxmi Bank and Global IME Bank and NIBL had also sought SEBON’s approval for their schemes way back in early 2013.

Laxmi Capital is vying to launch Laxmi Value Fund, which is again a five-year closed-end balanced fund worth Rs 40 crore. Global IME is also planning a scheme identical to Nabil Balanced Fund-1.

In fact many more mutual funds were expected in the market after the government decided to treat mutual funds as a non-taxable entity.

And the key stakeholders in the capital market, especially the share market, were upbeat about mutual funds as they give much-needed depth and maturity to the market. Such schemes are one of the safest investment tools for a novice investor, and almost as good as a pension plan for all.

When nobody seems to have an issue with more mutual funds in the market, why is it taking so long for these schemes to materialize?

Though the reasons vary for different companies.

Merchant bankers in general cite new regulations enforced by SEBON to seek credit rating for mutual fund schemes for the delay.