Table of Contents
•
Concept of Mutual Funds
•
Types of Mutual Fund
•
Parties Involved in Mutual Fund
•
Advantages of Mutual Fund
•
Valuation Concept (NAV)
•
Valuation Concept (NAV)
•
A Mutual Fund is a investment avenue
that pools money from several investors.
•
Collected fund is then invested in financial
instruments
such
as
Stocks,
Bond/Debentures, Govt. Securities etc.
•
The
return
from
the
investment
is
distributed proportionately among the
investors on the basis of the units held by
Concept
Investors
Fund
Manager
Returns
Pool their Money with
Passed Back to
investors on the basis of the units held by
each Investor.
•
Thus a Mutual Fund is the most suitable
investment for the common man as it
offers an opportunity to invest in a
diversified, professionally managed basket
of securities at a relatively low cost.
•
Mutual Fund in Nepal is regulated by
SEBON (www.sebon.gov.np)
3Manager
Securities
Returns
Invests in
GenerateTypes of Mutual Funds
•
Open Ended
–
Investors can buy/sell the unit from/to the fund
manager at anytime.
•
Closed Ended
•
Closed Ended
–
These are issued through a Public Offering after
which they are traded in the secondary market
(NEPSE) and has fixed maturity time.
•
Fund Sponsor
–
Responsible for registering the Mutual
Fund
• Paid-up Capital of NRs. 1 Billion
• At least 5 years in operation
• Earned profit for last 3 years continuously
• Paid up capital not less than net worth
Parties Involved as per MF Regulations, 2010
•
Fund Manager
–
Responsible for the preparation,
registration and operation of the schemes
under the Mutual Fund
• Assigned by the Fund Sponsor
• Paid up capital of NRs. 100 million
• At least 51% stake of the Fund Sponsor
• Licensed by SEBON to work as a Fund Manager
•
Fund Supervisor
–
Act as a Guardian and safeguard the
interest of the unit holders of the Mutual
Fund
• At least 5, appointed by the Fund Sponsor
• Group of Experts having clean standing with academic qualification and
experience in various Industries
5
Manager
• Responsible for prudent use of the Unit Holders investments and operate the schemes as per the Offer Document
•
Depository
–
Responsible for Record Keeping, Name
Transfers, Dividend Distribution, etc.
• Paid up capital of NRs. 100 million
Advantages
•
Professional Management
– Nabil Invest, with its team of experts and analysts, will manage the Mutual Fund
– Various Analysis Tools are considered to provide investors with the maximum possible returns
•
Diversification
– Due to the size, Mutual Fund is inclined towards diversification of the portfolio to reduce risk
•
Convenient Administration
– Fund Manager is responsible for the
administrative tasks involved with the assets
•
Transparency
– According to the Mutual Fund Guidelines 2067, Mutual Fund Manager has to publish the Net Asset Value(NAV), Units Sold, and Buy-back prices at least once in a week.
– Additionally, details of Investment Amount, Market Price of Investments, Income and Expenditure of the Fund, and NAV have to be published once every month and reported to SEBON and Fund Supervisor
•
Choice of Schemes
– Since Mutual Funds have various Schemes designed for various Investors, all income groups can
purchase Units at their discretion
•
Tax Benefits
administrative tasks involved with the assets of the portfolio
•
Return Potential
– Since the Portfolio is well diversified and managed by highly skilled Analysts, and Managers, the Return Potential is very high
•
Low Costs
– Investing directly in the Secondary Market involves various fees and the fees associated with small investments are proportionately higher than bigger ones
– Hence small investors lose more money in small investments
•
Tax Benefits
– Capital Gains and Dividend Incomes are Tax Exempt at various Capital Markets in the World.
– Some even facilitate the deduction of Mutual Fund Investments from Taxable Incomes
– Similar Tax Benefits could be introduced by SEBON and Government of Nepal very soon
•
Liquidity
– Mutual Funds are listed in the Secondary Market in case of Closed Ended Mutual Fund and can be traded in the secondary market
– In the case of Open Ended Scheme, Fund Manager buys/sells the unit during the business days.
•
NAV or Net Asset Value is the Market Value of the Assets
per Unit after deducting the Liabilities
•
NAV is calculated using the formula:
(Market Value of Fund’s Investments + Accrued Income- Liabilities-Accrued
NAV and Rate of Return
(Market Value of Fund’s Investments + Accrued Income- Liabilities-Accrued
Expenses)
---No. Of Shares or Unites Outstanding
Mutual
Mutual
Fund Sponsor
(Nabil Bank
Ltd.)
Fund Sponsor
(Nabil Bank
Ltd.)
Fund
Manager
Fund
Manager
Structure of Nabil Mutual Fund
Mutual
Fund
Mutual
Fund
Fund
Supervisor
Fund
Supervisor
Depository
(Nabil
Depository
(Nabil
Fund
Manager
(Nabil
Investment
Banking Ltd.)
Fund
Manager
(Nabil
Investment
Banking Ltd.)
S.N. Names1 Mr. Pawan Kumar Ojha 2 Prof. Dr. Bijay Kumar K.C. 3 Mr. Pushpa Lal Shrestha
