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Mutual funds in nepal

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Mutual funds in nepal

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this is all about history of mutual funds and different cost involve in mutual funds. this slide is able to describe about mutual funds.

this is all about history of mutual funds and different cost involve in mutual funds. this slide is able to describe about mutual funds.

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Mutual funds in nepal

  1. 1. Presented by: RUPESH NYAUPANE Mutual Funds in NEPAL
  2. 2. Introduction  Investment company/financial intermediaries that collect money from many small investors and invest that money in different areas.  Small investor who purchase securities individually are difficult, mutual funds makes it easy.  Fund is managed by investment expert known as portfolio manager.
  3. 3. Historical development of mutual fund:  First appeared in nineteenth century as a way for small investor to invest in corporate equities.  The first investment company: Scottish- American investment company. (1860).  In 1875 there are 50 investment company in BRITAIN. Many of them failed in the stock market crisis of 1890.
  4. 4. Cont..  In 1920s, investment companies are important in the U.S. ( at the time of BOOM)  in 1923 , small investor rushed to get in on the action, mutual fund are increased.  by 1929, there were 400 companies.  most of these are closed end companies.  In 1929 and 1933 stock market collaps.
  5. 5. Cont…  1930s relatively rapid growth of open end companies are developed.  1964, unit trust of India was established by the Indian government.
  6. 6. Cont……… Investor subscribing the share/unit of mutual fund is known as unit holder. Value of each unit is called Net Assets Value (NAV). Does not guarantee any dividend. Mutual funds are like depository institutions, but it represent partial ownership.
  7. 7. Why should we invest in MF Professional management. Diversification. Affordability. Liquidity. Low transaction cost. Investor protection: SEBON monitor the operation of the mutual fund.
  8. 8. Mutual fund structure:  Closed end mutual fund: A investment company with a fixed number of share outstanding.  it is traded at organized stock exchange.  it is traded at market price.  its share are less liquidate.  fixed maturity period ( 5 to 15).
  9. 9. Cont…  Open end mutual fund: A company that stands ready to buy or sell its shares at the current Net Assets Value at any time. No maturity period. It is redeemable at any time.  it issues shares in continual basis, so its number of share is varies. It is more liquidate.
  10. 10. Net Assets Value  A mutual fund net assets value per share is equal to total market value of all the mutual funds minus liabilities divided by the funds total number of share outstanding.  NAV= (total values of securities- liabilities)/share outstanding.
  11. 11. Cost of investing in mutual fund  Load fund: commission paid at the time of a fund purchased.  Back end load: commission paid when a fund is sold.  Operating expenses: cost incurred by mutual fund in operating the portfolio. (0.2% to 2%)  12B-1 fee: an annual marketing or distribution fee on a mutual fund.
  12. 12. History of mutual funds in Nepal  NCM mutual fund, 2050: issued by NIDC capital market in 1993/94. open end fund. Citizen unit scheme, 2052: issued by citizen investment trust open end fund. NCM mutual fund, 2059: converted into closed end with maturity of 10 years. Traded at NEPSE.
  13. 13.  In 2067, mutual fund regulation 2067 has introduced  Siddhartha mutual fund is the first mutual fund company:  Siddhartha investment growth scheme-I  life 5 years.  closed end type.
  14. 14. Cont…  Nabil mutual fund came out with nabil balanced fund-I  closed end type  maturity period of 5 years  face value Rs 10 per unit.
  15. 15. Structure of mutual fund in nepal Fund sponsor (Siddhartha bank Ltd) Fund manager (Siddhartha capital Ltd) Fund supervisor Depository (Siddhartha capital Ltd) Mutual fund (Siddhartha mutual fund)
  16. 16. Regulations of SEBON  Minimum paid up capital- 1 billion  Minimum 5 years of service in relevant field  Minimum 3 years of continuous profit.  Appointment of at least 5 fund supervisor, a fund manager and a depository.  license requirement for fund manager and depositary.
  17. 17. Fees and deposits: Fund supervisor : 0.5% of NAV.  fund manager : 2 % of NAV. 5% of the charge to be submitted to SEBON. Mutual fund application fee Rs 50000.
  18. 18. Current NAV of Siddhartha mutual fund date NAV value 2072-10-15 12.89 2072-10-8 12.637 2072-09-30 12.636 2072-09-24 12.386 2072- 09-17 12
  19. 19. Thank you

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