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.NSymbolMutual Funds NameFund SizeMonthly NAV (Rs)Monthly NAV Date
1NIBLSFNIBL Sahabhagita Fund313,502,36017.74Jestha 2078
2NADDFNIC Asia Dynamic Debt Fund499,094,84011.39Jestha 2078
3SSISSiddhartha Systematic Investment Scheme200,000,000  

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 NameFund SizeMaturity DateMonthly Nav (Rs)Monthly Nav DateLTP (Rs)Premium OR Discount (%)
1Global IME Samunnat Scheme 11,000,000,0002023-03-2423.77Jestha 207823.985.97
2Laxmi Equity Fund1,250,000,0002024-06-1216.13Jestha 207817.269.17
3NIBL Sambridi Fund 21,500,000,0002031-05-2910.04Jestha 207810.979.81
4Sunrise Bluechip Fund1,250,000,0002031-03-2610.07Jestha 207810.555.50
5Kumari Equity Fund1,000,000,0002031-03-1810.76Jestha 207810.921.87
6Prabhu Select Fund1,250,000,0002028-06-21Jestha 207810.677.34
7NIC Asia Select-301,250,000,0002028-07-05Jestha 2078
8RBB Mutual Fund 11,250,000,0002028-07-23Jestha 2078
9NIBL Pragati Fund750,000,0002024-01-1118.88Jestha 207817.30-7.05
10NIBL Sambridi Fund 11,000,000,0002022-01-0716.17Jestha 207816.090.63
11NMB hybrid Fund L- 11,000,000,0002023-10-2617.05Jestha 207815.70-7.05
12Nabil Equity Fund1,250,000,0002023-11-0618.89Jestha 207816.80-6.56
13Sanima Equity Fund1,300,000,0002024-12-2621.49Jestha 207819.38-7.54
14Siddhartha Equity Fund1,500,000,0002027-11-0817.90Jestha 207816.47-5.07
15Citizens Mutual Fund- 1820,000,0002025-03-2315.20Jestha 207815.041.08
16Citizens Mutual Fund- 2560,000,0002026-07-0816.26Jestha 207816.373.80
17NIC Asia Growth Fund835,200,0002025-03-1219.35Jestha 207817.64-5.72
18Nabil Balance Fund-21,120,000,0002029-05-3118.17Jestha 207816.60-9.39
19NMB 501,250,000,0002026-09-0119.43Jestha 207817.54-7.49
20Siddhartha Investment Growth Scheme – 21,200,000,0002029-08-2618.29Jestha 207816.45-7.27
21NIC Asia Balance Fund755,000,0002029-08-2717.76Jestha 207816.07-6.95
22Sunrise First Mutual Fund860,000,0002029-11-419.58Jestha 207819.723.79
23Laxmi Unnati Kosh652,623,6002027-10-0115.25Jestha 207815.06 
24Sanima Large Cap Fund1,200,000,0002028-03-2310.72Jestha 207810.55 

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

  1. How can I invest in mutual funds in Nepal?

    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.

  2. What is open ended mutual fund?

    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. There is no specific time period for this kind of mutual fund and also they are not listed in NEPSE.

  3. Which open ended mutual fund is best in Nepal?

    NIBL Sahabhagita Fund, NIC Asia Dynamic Debt Fund and Siddhartha Systematic Investment Scheme are 3 best open-ended mutual funds with good NAV.

  4. What is close ended in mutual fund?

    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.

  5. Which close ended mutual fund is best in Nepal?

    Global IME Samunnat Scheme 1, Laxmi Equity Fund, NIBL Sambridi Fund 2, Sunrise Bluechip Fund and Kumari Equity Fund are 5 best close-ended mutual funds in Nepal.

  6. What is NAV in Mutual Fund?

    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.

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