Mutual Fund in Nepal

Mutual funds are very popular investments because they offer a cost effective and efficient way to diversify investments. In general, mutual fund invest collected fund in different financial instrument such as Stocks, Bond/Debentures, Government securities and fixed deposits.

In the context of Nepal, the history of MF started with the floatation of NCM Mutual Fund, 2050 an open-ended fund with an amount of 100 million and managed by NIDC Capital Markets Ltd. Mutual Fund in Nepal is regulated by Securities Board of Nepal by fulfilling the criteria led in Mutual Fund regulation 2067.

Currently, there are Seven Mutual Fund scheme listed in NEPSE. They are;

S.N	SYMBOL	COMPANY	LISTED SHARE	PAID UP (Rs)	T. PAID UP (Rs)
1	SIGS1	Siddhartha Investment Growth Scheme-1	50,000,000	10	500,000,000
2	SEOS	Siddhartha Equity Oriented Scheme	100,000,000	10	1,000,000,000
3	NMBSF1	NMB Sulav Investment Fund-1	75,000,000	10	750,000,000
4	NIBSF1	NIBL Samriddhi Fund 1	75,000,000	10	750,000,000
5	NBF1	Nabil Balance Fund 1	75,000,000	10	750,000,000
6	LVF1	Laxmi Value Fund-1	50,000,000	10	500,000,000
7	GIMES1	Global IME Sammunati Scheme-1	80,000,000	10	800,000,000

Two Mutual Funds have just floated public issue. Nabil Equity Fund has been floated public issue worth Rs. 10 Crore units on Ashwin 2, 2073 where as NMB Hybrid Fund L-1 has been floated 8 crore unit shares from Bhadra 26, 2073. Now Both Schemes each of Rs. 10 face value to the general public are closed.

S.N	SYMBOL	COMPANY	No of Unit	Rate per Unit	Amount of Issue
1	SIGS1	NMB Hybrid Fund L-1	80,000,000	10	800,000,000
2	SEOS	Nabil Equity Fund	100,000,000	10	1,000,000,000

Similarly two mutual funds NIBL pragati Fund worth of 60 Crore and Laxmi Value Fund worth of 1 arab are in pipeline to be approved by SEBON.

S.N	COMPANY	No of Unit	Amount	Fund Manager	Date of Application
1	NIBL  Pragati Fund	60,000,000	600000000	NIBL Capital Markets Ltd	2073-02-03
2	Laxmi Value Fund	100,000,000	1000000000	Laxmi Capital Markets Ltd.	2073/02/31

Mutual Funds offer many benefits to the investors. Mutual Funds provide an ideal investment option to place your savings for long-term inflation adjusted growth. In the context of Nepal, average return of Mutual Fund is 15 %. According to Nepal Rastra Bank, Inflation rate of July 2016 is 10.4 i.e average return of Mutual Fund is more than the inflation rate. Therefore, Mutual Funds are far better option to invest in the present Context.

Experts' team of managers, researchers and analysts guides Mutual Funds so that it does not require a great deal of time or knowledge from the investors. Thus Mutual Funds are a good option for the investors who willing to invest in stock market without knowledge about it. Mutual Fund also allows investors to invest very small amount.

Government has also given preference to Mutual Fund. The Government of Nepal has promoted mutual funds by waiving tax on capital gain and interest income generated by investments of mutual funds. There is also mandatory provision to allocate 5% of total Initial Public Offering for mutual fund. Other benefit of Mutual Fund is, these funds are listed in Nepal Stock Exchange Limited so that these funds are easily traded for liquidity. Only the problem of mutual fund in the Nepalese contest is; investors can hardly get neutral advices regarding the funds from the sponsor banks though many mutual fund schemes are currently in action. Mutual Funds are becoming popular day by day but investers have to understand about market twist before investing.