Mutual Funds In Nepal

A mutual fund is a popular fund in the financial market. It is an investment scheme issued by a particular company. Certain companies issue the shares to the general public and collect money from people and invest that money in long and short-term instruments.

In short, It is an investment scheme managed by a company that brings a group of people together and invests their money in different portfolios such as stock, bonds, debentures, and other short-term debt instruments. Therefore, it is a scheme issued by Assets Management Company that pulls money from multiple investors and invests money in different long and short-term financial instruments.

The company collect the money and allot units for investor and provide the return as per the allotted units. Investors purchasing the mutual fund’s unit is a unitholder. Likewise, the value of each unit of a mutual fund is called Net Assets Value (NAV). In Nepal, the investors did not invest money in mutual funds compared to India and other countries. A mutual fund in Nepal is growing steadily.

 There are more than 25 mutual funds in Nepal. Generally, merchant banks issue the mutual fund’s IPO in Nepal. Recently, many merchants bank is issuing open and close-ended mutual funds. There are some mutual funds that are still trading at discounted prices in NEPSE. A mutual fund is best for the person or the company who wants to take less risk or who has less knowledge about the stock market.

Types of Mutual Funds

The mutual fund can be diversified with different characteristics. A mutual fund can be classified based on the asset’s value, structure, investment goals, risk, and specialization. Here in this article, we discuss the types of mutual funds based on the structure.

There are commonly 2 types of mutual funds based on the structure which are as follows:

1. Open-Ended Funds

In Open-Ended mutual funds, the issuer company does not limit the number of shares they offer. Also, the open-ended mutual fund units are bought on demand.

Here, if the investor wants to sell their shares then the fund will buy those shares. In open-ended mutual funds, the NAV is calculated on the daily basis. So it is those kinds of mutual funds first who sell the shares to the public and later if they want to sell, the company buy itself. There is no specific time period for this kind of mutual fund and also they are not listed in NEPSE.

Currently, there are three open-ended mutual funds are trading in Nepal. Those units are not listed in NEPSE so, they are not traded in the secondary market. Also, all three open-ended mutual funds have good NAV.

Open-Ended Mutual Fund Companies in Nepal:

S.N	Symbol	Mutual Funds Name	Fund Size	Monthly NAV (Rs)	Monthly NAV Date
1	NIBLSF	NIBL Sahabhagita Fund	313,502,360	17.74	Jestha 2078
2	NADDF	NIC Asia Dynamic Debt Fund	499,094,840	11.39	Jestha 2078
3	SSIS	Siddhartha Systematic Investment Scheme	200,000,000

2. Close-Ended Funds:

The investment company issues the IPO to the public with a specific number of units and price. After collecting the capital from the public, they listed all the units or shares in the secondary market for trading. Close-ended mutual funds can be issued at a discounted or premium price of NAV.

As per the current report, there are 24 close-ended mutual funds in Nepal. In recent dates, mutual funds are trading at high prices on the NEPSE floor sheet. Also, many mutual funds declared very high levels of dividend so they are trading at a premium price in the secondary market.

Close-Ended Mutual Fund Companies in Nepal:

S.N.	Mutual Fund Name	Fund Size	Maturity Date	Monthly Nav (Rs)	Monthly Nav Date	LTP (Rs)	Premium OR Discount (%)
1	Global IME Samunnat Scheme 1	1,000,000,000	2023-03-24	23.77	Jestha 2078	23.98	5.97
2	Laxmi Equity Fund	1,250,000,000	2024-06-12	16.13	Jestha 2078	17.26	9.17
3	NIBL Sambridi Fund 2	1,500,000,000	2031-05-29	10.04	Jestha 2078	10.97	9.81
4	Sunrise Bluechip Fund	1,250,000,000	2031-03-26	10.07	Jestha 2078	10.55	5.50
5	Kumari Equity Fund	1,000,000,000	2031-03-18	10.76	Jestha 2078	10.92	1.87
6	Prabhu Select Fund	1,250,000,000	2028-06-21	–	Jestha 2078	10.67	7.34
7	NIC Asia Select-30	1,250,000,000	2028-07-05	–	Jestha 2078	–	–
8	RBB Mutual Fund 1	1,250,000,000	2028-07-23	–	Jestha 2078	–	–
9	NIBL Pragati Fund	750,000,000	2024-01-11	18.88	Jestha 2078	17.30	-7.05
10	NIBL Sambridi Fund 1	1,000,000,000	2022-01-07	16.17	Jestha 2078	16.09	0.63
11	NMB hybrid Fund L- 1	1,000,000,000	2023-10-26	17.05	Jestha 2078	15.70	-7.05
12	Nabil Equity Fund	1,250,000,000	2023-11-06	18.89	Jestha 2078	16.80	-6.56
13	Sanima Equity Fund	1,300,000,000	2024-12-26	21.49	Jestha 2078	19.38	-7.54
14	Siddhartha Equity Fund	1,500,000,000	2027-11-08	17.90	Jestha 2078	16.47	-5.07
15	Citizens Mutual Fund- 1	820,000,000	2025-03-23	15.20	Jestha 2078	15.04	1.08
16	Citizens Mutual Fund- 2	560,000,000	2026-07-08	16.26	Jestha 2078	16.37	3.80
17	NIC Asia Growth Fund	835,200,000	2025-03-12	19.35	Jestha 2078	17.64	-5.72
18	Nabil Balance Fund-2	1,120,000,000	2029-05-31	18.17	Jestha 2078	16.60	-9.39
19	NMB 50	1,250,000,000	2026-09-01	19.43	Jestha 2078	17.54	-7.49
20	Siddhartha Investment Growth Scheme – 2	1,200,000,000	2029-08-26	18.29	Jestha 2078	16.45	-7.27
21	NIC Asia Balance Fund	755,000,000	2029-08-27	17.76	Jestha 2078	16.07	-6.95
22	Sunrise First Mutual Fund	860,000,000	2029-11-4	19.58	Jestha 2078	19.72	3.79
23	Laxmi Unnati Kosh	652,623,600	2027-10-01	15.25	Jestha 2078	15.06
24	Sanima Large Cap Fund	1,200,000,000	2028-03-23	10.72	Jestha 2078	10.55

How can I Invest in a Mutual fund in Nepal?

Diversification in investment, liquidity, proper investment management, and government convenience and transparency are the major characteristics of mutual funds. Although the mutual fund does not have a long history in Nepal, the craze of investor in mutual funds are increasing day by day. Initially, NCM mutual fund, 2050 was the first-ever mutual fund of Nepal. That mutual fund was applied as an open-ended mutual fund but later it converted into close-ended and listed in NEPSE.

Firstly, an Open-ended mutual fund can be invested through IPO only because it will not be listed in the NEPSE. Close-ended mutual funds can be bought through IPO or later from the secondary market. Close-ended mutual funds are quite popular in Nepal.

Net Assets Value (NAV) is the benchmark to buy mutual funds from the secondary market. Every week all investment company post their NAV value on their website.

Normally maturity period is crucial in mutual funds. Also, every year investment companies provide a certain cash dividend to their unit holder.

Therefore, the mutual fund has a bright scope in the future. Because they are professional in money management, high diversification, low transaction cost, and high safety for investors.

FAQs on Mutual Funds In Nepal