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

1. Presented by:
RUPESH NYAUPANE
Mutual Funds in NEPAL

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. 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. 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. Cont…
 1930s relatively rapid growth of open end
companies are developed.
 1964, unit trust of India was established by the
Indian government.

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. 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. 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. 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. 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. 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. 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.  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. 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. 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. 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. 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. 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. Thank you