Project Report

On
“Performance of
Mutual Funds in
Bangladesh”
 Project Report on the “Performance of Mutual Funds in
Bangladesh”

Submitted to
Mosabbir Uddin Ahmad

Assistant Professor

School of Business & Economics

United International University

Submitted by
Ariful Islam

111 132 135

Bachelor of Business Administration

United International University

Date of Submission: 12/07/18

5th November, 2018

Mosabbir Uddin Ahmed

Assistant Professor

School of Business & Economic

Subject: Submission of Project paper on the “performance of Mutual funds in Bangladesh”

Dear Sir,

It gave me immense pleasure in presenting this report, which was assigned to me. In this paper i
try to my best to carry out all the requirements of this project.

I consider myself very privileged to prepare under your guidance. This has been an enormous
opportunity for me to learn how to prepare a report. It has provided me with a great scope of
Appling the gathered classroom knowledge in the practical. I must mention here that I am
extremely thankful to you for your guidance.

I would like to draw attention particularly on the matter that there is necessary, as now and when
needed. We shall be available to share the pleasure discussions.

Sincerely yours,

Ariful Islam (111 132 135)

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Declaration

Here I declare that the report entitled “Mutual Funds Performance in Bangladesh” is submitted
as the partial fulfillment of the degree of Business Administration of United International
University.

Ariful Islam

ID: 111 132 135

Bachelor of Business Administration (BBA)

United International University

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It is my Pleasure to certify that Ariful Islam, ID 111 132 135, student Bachelor of Business
Administration of United International University (UIU) has successfully completed the project
program entitle “Performance of Mutual Funds in Bangladesh”. He has completed this work
under my supervision and prepared this report according to direction and guidance.

A far I know he tried his best to conduct this successfully. I think this will help him in the future
to build up his career.

I wish his every success in life.

Mosabbir Uddin Ahmad

Assistant Professor

School of Business & Economics

United International University (UIU)

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Acknowledgement
I try to my best efforts have been given to focus on the overall objective of the report.

During the preparation of this report, I was need of some helps and guidelines, which must be
mentioned. First of all, I am very grateful to our honorable teacher Mosabbir Uddin Ahmed
Assistant professor, School of business & economics of UIU. It is due to his patent
encouragement and persistence that i was accomplishes my work on time. Without his help it
would not have been possible to complete my report which i always remember

I would also like to think to those people who give me lots of information about the concept.

Finally, i special thanks go to the responds, which spared their time and look the trouble of
answering the question and help to find out the information.

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Executive Summary
Bangladesh capital market is based on share market and money market. Mutual fund is the part
of capital market investment. In Bangladesh there are almost fifty to sixty mutual fund and
seventeen Asset management companies. Security Exchange Commission (SEC) provides the
rules and regulation for the mutual fund industry. Mutual fund managers collect money from the
mutual fund investors and use this money to invest in share market or bond for the general
public. There are also eight trustees and custodian. These papers mainly focus on the
performance of mutual funds and also focused on the evaluation of performance of asset
management companies.

These reports contain net asset value (NAV) of different mutual fund from 2012 to 2018 year.
By using these NAV I compare the data from one company to another company. In Bangladesh
there are three types of mutual fund. Currently open ended and close ended mutual fund is
operated but the exchange traded fund is not operated. Recently Security Exchange Commission
launch Exchange traded fund in Bangladesh. When I analysis the mutual funds I found that most
of the mutual fund NAV price per unit is lower or almost close the face value of their mutual
funds. This is not good for the mutual fund industry because the new investors will not involve
or invest in the mutual fund. Then I Compare five Asset management companies NAV price per
unit. I found that two out of five asset management companies play a good perform in the year
2018 but the other three companies performance is very bad.

Like other countries, Bangladeshi government should focus on how new investors interested in
mutual fund. Security Exchange commission must be use some effective method that help the
mutual fund managers to operate mutual fund in a professional way.

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Table of Contents
1 Introduction...................................................................................................................................1
1.1 Origin of the Report.....................................................................................................................1
1.2 Objective of the study..................................................................................................................1
1.3 Methodology of the study...........................................................................................................2
1.4 Scope of the study.......................................................................................................................2
1.5 Limitation of the study.................................................................................................................2
2 Financial system of Bangladesh......................................................................................................2
3 Mutual fund process.......................................................................................................................4
3.1 History of the mutual fund in Bangladesh...................................................................................5
4 Structure of mutual fund in Bangladesh.........................................................................................5
4.1 Open ended fund.........................................................................................................................5
VIPB Growth Fund.......................................................................................................................................7
Prime Financial First Mutual Fund..............................................................................................................7
4.2 Close ended fund.........................................................................................................................7
4.3 Exchange traded fund..................................................................................................................9
5 Function of mutual fund.................................................................................................................9
5.1 Key players of mutual funds operation........................................................................................9
5.2 Minimum size of mutual fund....................................................................................................14
5.3 Fees and expenditures...............................................................................................................14
6 Investment policy.........................................................................................................................15
7 Investment restriction..................................................................................................................16
8 Mutual fund performance............................................................................................................16
8.1 Performance analysis of Asset Management Companies..........................................................21
9 Comparison among of Asset Management companies.................................................................30
10 Problems of mutual fund in Bangladesh.......................................................................................31
11 Recommendation & Conclusion....................................................................................................34
12 References....................................................................................................................................36

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1 Introduction
Mutual fund is a process in which asset management company collect money from the investors
for the purpose of investing in securities like stock, bond money market and many others assets.
Any individual person or financial institution can invest in mutual fund. Professional money
managers operate mutual funds. The formation of mutual fund include in unit investment trusts,
open-end funds and close-end funds. This market is based on equity and have little possible to
introduce any financial instrument. Because the rapidly development has not happened in mutual
fund industry. But mutual fund can be the best alternative investment in this undiversified many
marked. The activity of mutual fund in Bangladeshi capital market is very slow. The term mutual
fund cannot legally define in Bangladesh but it is most commonly use to collect investment
companies money that are regulated and sold in the financial market. There are sometimes
referred as unit fund and collective fund. According to the basic financial theory investments in
mutual fund is not totally risk free but also have same risk in investing in equity. But the main
difference is that the professional management handles this mutual fund investment. For that
mutual fund investment reduce the risk rather than the other investment. The capital of mutual
fund is limited and that offer limited number of certificates for sells to the public.

In Bangladesh a mutual fund is issued and traded on the stock exchange markets. There are two
types of mutual fund in Bangladesh. One is opening ended and the other is close ended. The
mutual fund sector is very small rather than the other capital market. Most of the mutual funds in
Bangladesh are based on the close ended system. Corporate governance plays a big role in the
mutual fund industry. This corporate governance directed and controlled the mutual fund system.

1.1 Origin of the Report

This project paper has been prepared as a requirement of the internship/project program, which is
essential part for completing Bachelors Business of Administration (BBA).

1.2 Objective of the study

The main objective of this report is to understand the mutual funds and how it is work in
Bangladesh. By understanding of performance of mutual funds is a matter of concern to the fund
managers, investors and researchers alike. There are also other objectives. These objectives will
help us to understand mutual fund in Bangladesh.

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  To know the types of mutual fund in Bangladesh
 To know the performance of mutual fund in Bangladesh
 to identify the problems and solution of mutual fund in Bangladesh
 To know the investment policy of mutual fund in Bangladesh

1.3 Methodology of the study

The study is based upon the secondary information that was collected from various journals,
online newspaper, articles and other government websites. I also collected data from Dhaka
stock exchange, Bangladesh security exchange commission (BSEC) and annual report of the
asset management companies

1.4 Scope of the study

The study of this report will be helpful for the new investors to invest in the mutual fund
industry. This report also provides an outline of the process how the mutual fund work. This
report will mainly focus on the evaluation of the performance of mutual fund in Bangladesh.

1.5 Limitation of the study

There are some limitations to complete my project paper.

 It is not easy to find primary and secondary data as it is a first time study on the given
topic.
 All information of the asset management company is not available for the project paper.
 Very difficult to collect proper data through the internet.

2 Financial system of Bangladesh

There are three sectors in Bangladesh financial system. They are

 Formal sector,
 Semi-formal sector and
 Informal sector.

All this sectors are categorized in accordance with degree of regulation.

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 Financial System of Bangladesh

Formal sector Semi- formal sector Informal sector

Financial Market Regulators &

Specialized Financial Institutions:
Institutions
 House Building Financial
Money Market (Banks, Corporation(HBFC)
NBFIs, Primary Bangladesh Bank  Palli Karma Sahayak
Dealers) Foundation(PKSF)
(Capital aMarket)
 Samabay Bank
Capital Market
(Investment banks, Banks (58 scheduled & 5  Grameen Bank
Stock Exchanges, non-scheduled banks)
Credit Rating
NBFIs (34 NBFIs)
Foreign Exchange
Market (Authorized
Dealers) Insurance Development &
Regulatory Authority

Insurance Companies (18 Life

and 44 Non-Life Insurance
Companies)

Securities & Exchange Commission

(Regulatory of capital market)

Stock Exchanges, Stock Dealers &

Brokers, Merchants Banks, AMC s,
Credit Rating Agencies etc.

Microcredit Regulatory Authority

(MFI Authority)

Micro Finance Institutions (599 MFIs)

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3 Mutual fund process
A Mutual Fund is a investment that collects the money of a number of investors who share a
common financial goal. Mutual fund is the most popular process of investment for the general
people as it is offer professionally manage and diversify the risk of portfolio. Mutual fund
managers pool money from the investors. After collecting from the investors fund managers
professionally invested in capital market instrument such as share market, bond and other
securities. From this investment mutual fund managers can generate capital gain through the
interest, return and divided. Lastly the return will be passed back to investors.

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3.1 History of the mutual fund in Bangladesh

Bangladesh government established Investment Corporation Bangladesh (ICB) in 1980 which is

first ever mutual fund to invest in capital market. Asset & investment management Services of
Bangladesh Limited (AIMS) is the first private organization that invests in mutual fund. In the
beginning time Investment Corporation Bangladesh (ICB) use only close ended operation. In
2010 this organization started open ended operation. Financial Asset Management Company,
trustee and sponsor came to the market and that is operated under the BSEC (Mutual fund) rules-
2001, Trust act, 1882 and registration act, 1908. Mutual fund pooled money of the investors like
individual and industrial. By using these funds ICB and all other financial organization diversify
and reduce the financial risk. Now there are 36 close ended mutual funds in Bangladesh. This 36
close ended mutual fund operated in the Dhaka Stock exchange (DSE). Prime financial asset
management company limited (PFAMCL) started mutual fund with the initial size of tk500
million. Now this mutual fund value is 3595.5core which is much higher than the initial size of
the mutual fund. Mutual fund is now at immature stage as it is very small compare to the capital
market. Bangladesh security exchange commission provide license to the 15 asset management
companies. This asset management companies manage around tk5000 core which is less than 3%
of the total capital market. In many other countries mutual fund assets are almost close to the
50% of the total capital market.

4 Structure of mutual fund in Bangladesh

Mutual funds are the portfolio of different types of bond, stock, securities and treasures etc.
investment objectives underling portfolios of share, risks, return, fees and all other expense are
differ mutual fund. Mutual fund manager’s professional mange the investor fund invests in bond
stock and short term securities etc. There are three types of mutual funds open ended and close
ended.

4.1 Open ended fund

Open ended mutual funds that do not have restrict on the amount of purchase and sell of mutual
funds share. Investors are allowing continuing buy and selling or even entering and exiting as per
their convenience. In Bangladesh there is no legal number of shares that can be issued.

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  There is No restrictions on the number of the fund share will issue
 The fund issue will be continue If demand is continuously increase
 Open-end funds also repurchase the share when investors wish to sell the share.
 When the fund assets increase rapidly than the fund will be close to the new investors.

In Bangladesh there are few open ended fund some of this fund given below:

Open ended Fund name Asset Current Net asset Current Net asset
Management value(NAV) at cost value(NAV) at
companies price market price
First ICB Unit Fund ICBAMCL 11.60 9.61
Second ICB Unit Fund ICBAMCL 12.67 10.78
Third ICB Unit Fund ICBAMCL 12.12 11.05
Fourth ICB Unit Fund ICBAMCL 12.44 10.63
Fifth ICB Unit Fund ICBAMCL 12.18 10.93
Sixth ICB Unit Fund ICBAMCL 12.58 11.65
Seventh ICB Unit Fund ICBAMCL 12.79 11.34
Eighth ICB Unit Fund ICBAMCL 12.28 10.62
Prime Finance First Mutual Fund ICBAMCL 17.43 11.06
ICB AMCL Second Mutual Fund ICBAMCL 13.42 8.26
ICB Employees Provident Mutual ICBAMCL 11.84 7.16
Fund One: Scheme One
Prime Bank 1st ICB AMCL ICBAMCL 11.65 7.57
Mutual Fund
Phoenix Finance 1st Mutual ICBAMCL 11.73 7.39
Fund
ICB AMCL Third NRB Mutual ICBAMCL 11.57 7.06
Fund
IFIL ISLAMIC Mutual Fund-1 ICBAMCL 11.15 8.12
ICB AMCL Sonali Bank Limited ICBAMCL 11.09 8.25
1st Mutual Fund
ICB AMCL First Agrani Bank ICBAMCL 10.65 9.00
Mutual Fund
VIPB Accelerated Income Unit VIPB Asset 12.18 12.17
Management
Fund
Company Limited

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 VIPB Asset 10.44 9.28
VIPB Growth Fund Management
Company Limited
Prime Finance 112.88 121.70
Prime Financial First Mutual Asset
Fund Management
Company
Prime Finance 11.06 10.92
Rupali Life Insurance First Asset
Mutual Fund Management
Company
Prime Finance Second Mutual Prime Finance 11.95 12.15
Fund Asset
Management
Company

4.2 Close ended fund

Close ended mutual funds is an investment model where a fixed number of mutual fund is
issued. New share cannot issue when first time a fixed number of share issued in close ended
fund. Investors are not allowed to continuously buy and sell the share of mutual fund.

 Publically traded
 Raises fixed amount of capital (only once) through issuing IPO
 Issue a specific number of share
 It is listed and traded like a stock on a stock exchange
 The stock prices of a closed-end fund fluctuate according to net asset value(NAV) per
unit.

Close ended mutual Mutual fund managers NAV at NVA at cost

fundName market price
price
SEMLIBBLSF Strategic Equity 10.26 10.50
Management Limited

POPULAR1MF RACE 11.82 10.97

LRGLOBMF1 LR GLOBAL 11.87 10.08

RELIANCE1 AIMS 14.17 10.98

VAMLRBBF Vanguard AML 7 12.29 0.61

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ICBISLAMIC ICB AMCL 18.70 23.85

ICBAGRANI1 ICB AMCL 10.01 13.58

SEBL1STMF VIPB 15.88 12.48

ABB1STMF RACE 12.50 11.28

1STPRIMFMF ICB AMCL 12.55 17.84

GRAMEENS2 AIMS 19.94 10.81

PF1STMF ICBAMCL 8.92 11.93

NLI1STMF VIPB 16.98 13.29

ICB3RDNRB ICBAMCL 8.59 11.81

ICB2NDNRB ICBAMCL 11.75 14.88

SEMLLECMF SEML 10.66 11.08

AIBL1STIMF LR GLOBAL 12.10 10.37

TRUSTB1MF RACE 12.14

ICBEPMF1S1 ICBAMCL 8.55 12.28

1JANATAMF RACE 11.67 10.62

CAPMBDBLMF CAPM 10.66 11.10

FBFIF RACE 11.68 10.80

VAMLBDMF1 VANGUARD 11.85 11.02

IFILISLMF1 ICBAMCL 9.73 11.42

EBL1STMF RACE 11.90 10.98

MBL1STMF LR GLOBAL 12.82 10.29

ATCSLGF AT Capital 13.91 12.16

EBLNRBMF RACE 11.68 10.78

EXIM1STMF RACE 12.59 11.10

NCCBLMF1 LR GLOBAL 12.75 11.23

ICBAMCL2ND ICB AMCL 10.01 13.58

PRIME1ICBA ICB AMCL 9.26 11.90

PHPMF1 RACE 11.79 10.68

8THICB ICB 44.99 33.63

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 DBH1STMF LR GLOBAL 12.51 10.44

IFIC1STMF RACE 11.61 10.78

GREENDELMF LR GLOBAL 12.59 10.47

ICBSONALI1 ICB AMCL 9.97 11.31

4.3 Exchange traded fund

An exchange traded fund (ETF) is a one kind of investment fund that traded on stock exchange
and also much more likes stocks. An ETF stored investor’s money with units that can be bought
or sold throughout the trading day on a stock exchange.

 ETF is the combination of mutual fund and stock.

 Shareholder cannot directly own of exchange traded fund.
 Investors can make capital gain by selling the unit
 Investors can get over plus value if the fund is liquidated.

Exchange traded fund (ETF) recently launch in Bangladesh. But unfortunately Asset
Management companies do not operate any ETF at the present time.

5 Function of mutual fund

Mutual fund has some function that needed to understand how mutual fund is operated and who
does involve in mutual fund.

5.1 Key players of mutual funds operation

There are four parties that involved in mutual fund operation in Bangladesh. These four parties
play four different key roles in mutual funds operation.

Sponsor- any financial institution or limited company that start fund by subscribing minimum
10% of the total fund size. The Sponsor constitutes the fund by virtue of Trust Deed.

Trustee- Any bank or financial institution that registered by the SEC to act as a trustee. This
trustee is the guardian of the funds and holds all capital assets and uses this fund in trust on
behalf of the unit holders.

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SL. Company Name Address Contact
PBX Range: 9566153-54 

Head Office: 9/D, Dilkusha 9566160-69,9566074-75 

1 Agrani Bank Limited
C/|A, Dhaka-1000
Fax: (+8802) 956 2346, 956
3662 
Phone: +880-2-886 9200
BRAC Bank Limited: 1 Fax : +880-2-906 0395 E-
2 BRAC Bank Limited Gulshan Avenue Gulshan -1 mail :
Dhaka- 1212 enquiry@bracbank.com
Web: www.bracbank.com
Sandhani Life Tower Rajuk PABX : 9612197, 9694931,
Sandhani Life Insurance
3 Plot No. 34 Bangla Motor, 9661241 Cell: 0183332581-
Company Ltd.
Dhaka-1000 82 Fax: 88-02-9614465
Phone: 029555073-4,
9563056-7 Fax: +88-02-
Bangladesh General Insurance 42, Dilkusha C/A Motijheel 9564213 Email:
4
Co. Ltd. Dhaka bgicinsurance@yahoo.com,
bgic@citechco.net, Web:
www.bgicinsure.com
Phone : (880-2) 8011138
Grameen Bank Bhaban Fax : (880-2) 8013559
5 Grameen Fund, Grameen Bank Mirpur - 2, Dhaka -1216, Email :
Bangladesh grameen.bank@grameen.ne
t Web: www.grameen.com
Phone : 476537 (auto
BDBL Building (12-15th hunting) Fax : 880-2-
Investment Corporation of
6 Floors) 8, Rajuk Avenue, 9563313 E-mail :
Bangladesh
Dhaka-1000 icb@agni.com web site:
www.icb.gov.bd
Phone:+ 88 02 5226386
Eastern Bank Ltd. 10 Fax:+ 88 02 5228932 E-
7 Eastern Bank Ltd. Dilkusha C/A Jiban Bima mail: to info@ebl.com.bd
Bhaban, Dhaka,Bangladesh Web:
http://www.ebl.com.bd
BDBL Bhaban(Level-16) 8 Tel. 4255691, 4255692
8 ICB Capital Management Ltd.
Rajuk Avenue Dhaka-1000 Web: www.icbcml.com.bd

Asset Management Company- Asset Management Company is a bank or financial institution

that registered by the SEC. This Asset Management Company (AMC) operate manage and
structure of the mutual fund approved by the trustee and the commission in accordance with the
provision of the trust deed and the rules.

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Sl. No. Name of the Company Address Phone/Fax

01. ICB Asset Management BSB Building Ph.: Chief

Company Ltd. 9550178, Executive
Officer

02. Asset & Investment 7160303, Md.

Management Services of Wahiduzzaman
Bangladesh Ltd. (AIMS) Khandaker

03. L-R Global Bangladesh Dhaka Stock Fax:

Asset Management Exchange 9576413
Company Ltd. Building1003
(9th floor) 9/E
Motijheel C/A,
Dhaka-1000

04. Bangladesh Shilpa Rin BSRS Bhaban, Ph.: MD & CEO

Sangstha 12, Karwan 9136432-3
Bazar, Dhaka-
1217

05. RACE Management Pvt. BHT Center, Flat Fax: Mr. Yawer
Co. Ltd. # 07, Road # 09, 9136162-3 Sayeed
Block –F, Banani,
Dhaka-1213

06. Prime FinanceAsset Dilkusha C/a, Ph: 9561070, Director

Management Company Dhaka-1000 9561232
Ltd.

07. VIPB Asset 114, Shantinagar, Fax: Mr. Saiful

Management Company Dhaka-1217 9562254, Islam
Ltd.

08. Alif Asset Management PBL Tower (12th 9564991 Managing

Company Ltd. Floor) 17 Gulshan Director
North
Commercial Aria,
Dhaka

09. National Asset Suit No. 310 Ph.: Managing

Management Ltd. SujonTower, 14 Director
Segun Bagicha,
Dhaka-1000

10. Invest Asia Capital House No. 14/1- Fax: Dr. Nafis
Asset Management Ltd. D (2nd Floor),
Road No. 4,
Dhanmondi
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 Dhaka-1205

11. Asian Tiger Capital UTC Building, Ph.: 8832994 Managing

Partners Asset Level # 16, 8 Director
Management Ltd. Panthapath,
Dhaka-1215

12. Alliance Capital Asset 87, Rashed Khan Fax:

Management Ltd. Menon Road 8832993
(New Eskathn
Road) Level-15,
Dhnaka-1000

13. Universal Financial Ibrahim Mansion Ph.: Managing

Solutions Ltd. (5th Floor), 95 9563875, Director
Motijheel C/A, 9566713
Dhaka-1000

14. Zenith Investment Ltd. Rahman Regman Fax:

Centre (6th 9563692
Floor), 191/B,
Tajgaon-Gulshan
Link Road,
Dhaka-1208

15. CAPM (Capital & Asset Flat: A-2, House: Ph.:

Portfolio Management) 7, Road: 17, 9861346,
Company Ltd. Rupsha Tower, 9861362
Banani C/A,
Dhaka-1213

16. Rock Asset Shapan Villa (GF Fax:

Management Ltd. & 1st floor) 8818395
House No. 52,
Road No. 12,
Block No. H,
Banani, Dhaka

17. LankaBangla Asset Safura Tower 8857660 Mr. Sayyed

Management Company Level-11, 20 Husain Jamam
Limited Kamal Ataturk
Avenue Banani,
Dhaka-1213

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 Custodian- Any bank or financial institution that registered by the SEC to act as a custodian
with special permission by the SEC the Trustee and the Custodian can be the same institution.
The Custodian keeps the securities of the Fund in safe custody.

SL. Name of the Address Contact Date of

Company Certification
Issue
1 ICB Capital BDBL Tel- 9865691, 9865692 25 May, 2017
Management Bhaban(Level-
Ltd. 16)

Rajuk Avenue

Dhaka-1000
2 Agrani Bank Head Office PBX Range: 9566153-54 01 Jul, 2016
Ltd. 9D Dilkusha 9566160-69,9566074-75
Commercial Fax: (+8802) 956 2346, 956
Area Dhaka- 3662 E-
1000 mail:agrani@agranibank.or
g
3 BRAC Bank BRAC Bank Phone: +880-2-885 9202 01 Jul, 2016
Limited Limited 1 Fax: +880-2-986 0395 E-
Gulshan mail:
Avenue enquiry@bracbank.com
Gulshan -1 Web:
Dhaka 1212 http://www.bracbank.com
4 Citi Bank N.A. Citibank, N.A Phone: +88 096 6699 1000 / 01 Jul, 2016
7 Gulshan +88 02 8833567 Fax: +88
Avenue, 02 986 0917 Web:
Gulshan-2 www.citigroup.com
Dhaka
5 Investment BDBL Phone : 9563455 (auto 01 Jul, 2016
Corporation of Building (12- hunting) Fax : 880-2-
Bangladesh 15th Floors) 8, 9563313 E-mail :
(ICB) Rajuk Avenue, icb@agni.com web site:
Dhaka-1000. www.icb.gov.bd
Post Box No.
2058
6 Standard Gulshan Web: www.sc.com/bd 01 Jul, 2016
Chartered Bank Branch 67
Gulshan
Avenue
7 The Hongkong Bangladesh Phone: +880 2 987 4460 01 Jul, 2016
and Shanghai Management Website: www.hsbc.com.bd
Banking Office: Level
Corporation 4, Shanta
(HSBC) Western Tower
Limited 186 Bir Uttam
Mir Shawkat
Ali Road

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 Tejgaon
Industrial Area,
Dhaka 1208
8 Commercial Hadi Mansion, Telephone : +88 02 01 Jul, 2016
Bank of Ceylon 2 Dilkusha 7114125 (General) Fax :
PLC C/A, Dhaka +88 02 9565707, +88 02
1000, 9509874 E-mail:
Bangladesh email@combankbd.com
Web: www.combank.net

5.2 Minimum size of mutual fund

The minimum size of the open ended mutual fund is TK 60million while for the close ended
mutual fund is TK 30 million for any mutual fund. Under the construction of trust act, 1882 (Act
no. II) And the registration act, 1908 (Act no. XVI) The minimum size of the exchange traded
fund must be at least five hundred million taka and the subscription by the sponsors is not less
than 10% of the fund size.

5.3 Fees and expenditures

Formation expense- include formation fee 1%; banker to issue fee .10% amount collected by
the bank and the post issue expenditure is negotiable.

Registration and annual fee- the registration fee is the 0.10% of the total amount of the fund
size. The annual fee is the 0.10% of the total amount of the fund size.

Management fee- asset management company collect annual management fee on the basis of
weekly average NAV on the followed process:

NAV of the For the first Next Next Over

Scheme TK 50 million TK 200 million TK 250 million TK 500 million
Rate of fee 2.5% 2.00% 1.5% 1.00%

Trustee fee- trustee fee can be negotiated. At present the trustee fee is around 5 to 10 lac.

Custodian fee- Presently market practice is @ 0.10% of the value of security.

Central Depository Bangladesh Limited (CDBL) fee- when security deposit ranging from TK
100000 to TK 500000 than IPO fee is .25% on that amount.

Listing fee- initial listing fee up to Tk 100 million is @ 0.25% and above Tk 100 million is @
0.15%; annual listing fee ranging from Tk 10,000 to Tk 100,000.

Audit fee- Negotiable.

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6 Investment policy
The professional managers follow some policy to invest mutual fund money. They can invest
many companies like:

 The fund can invest in companies which are based on the shoria low.

 Invest in both listed and non-listed securities.

 Insurance company, conventional banks and leasing company.

 Alcohol based company

 Pork related products related company

 Tobacco industry

 Weapon and defense

 Entertainment like hotels cinemas music etc.

After find out a company which is not involve in an unacceptable primary business. The fund
may be invested in that companies that must be follow some role.

 The investee company’s debt must be equal to the 33% or less than 33% of the trailing
12 month average market capitalization of the company.

 The total percentage of account receivable is less or equal to the 45% of the total assets

They may also invest in other shariah compliant instruments as and when they are available for
investment, specifically:

 in participation term certificates, modaraba certificates, mosharika, morabaha, term

finance certificates and all other asset backed securities

 in contracts, securities or instruments of companies, organizations, and establishments

issued on the principles of Bai’ Mo’ajjal, Bai’ Salam, Istisna’a, Modaraba, Morabaha
and Mosharika

 in the form of Reba-free cash deposits with Islamic banks or other Islamic financial
institutions with the object of maintaining sufficient liquidity to meet the everyday
requirement and to take advantage of suitable investment opportunities as and when
they arise;

7 Investment restriction
All the restriction of mutual fund investment follow the security exchange commission(mutual
fund) Act 2001.There are some restrictions in mutual fund investment like:

 Total assets of the fund not less than 75% which is invest in capital market.
15 | P a g e
  Investors can invest 25% of the total assets fund in fixed income securities.
 Investors will be investing not more than 15% of the total assets of the fund in pre-IPOs
at one time.
 All investment will be made by the name of mutual fund.
 The fund will not be able to buy its own units.
 The investment manager cannot invest more than 10 % of its total assets in a particular
companies share.
 The Fund will not invest more than 20% of the fund in shares, debentures or other
Securities of a single company or group.

8 Mutual fund performance

In Bangladesh there are lots of asset management companies and these companies weakly
portfolio return given below. There are also has current market prices, net asset value (NAV) and
the cost price of mutual funds. I use this information to calculate price to NAV ratio and the
NAV to cost ratio. All the raw data is based on one week information. Here we can see the first
teen Current one week close ended mutual fund performance in Dhaka Stock Exchange (DSE)
given below:

Name Mutual fund Current NAV Cost Price NAV

managers price at price to to
market NAV cost
price ratio ratio

SEMLIBBLSF Strategic 9.00 10.26 10.50 .88 .98

Equity
Management
Limited

POPULAR1MF RACE 4.00 11.82 10.97 0.34 1.08

LRGLOBMF1 LR GLOBAL 7.30 11.87 10.08 0.61 1.18

RELIANCE1 AIMS 10.00 14.17 10.98 0.71 1.29

VAMLRBBF Vanguard 13.01 12.29 0.61 1.06 0.00

AML 7

ICBISLAMIC ICB AMCL 17.90 18.70 23.85 0.96 0.78

ICBAGRANI1 ICB AMCL -- 10.01 13.58 -- 0.74

SEBL1STMF VIPB 11.80 15.88 12.48 0.74 1.27

16 | P a g e
 ABB1STMF RACE 4.40 12.50 11.28 0.35 1.11

1STPRIMFMF ICB AMCL 10.40 12.55 17.84 0.83 0.70

Here we can see the information of first teen mutual funds current price, NAV at market price
and cost price of the mutual fund. By using this information we find price to NAV ratio and
NAV to cost ratio.

PERFORMANCE OF TEEN MUTUAL FUNDS

20
18
16
14
12
10
Price per unit

8
6
4
2
0
F1

I1
F

F
IC
CE

TM

FM
M

TM
LS

BB

N
M
BM
R1

RA
BB

A
LR

M
1S

1S
A

SL
LO
LA

RI
G
LI

BL

BB
M
LI

BI

BA

TP
G
PU
M

A
RE

SE

A
LR

IC
V
SE

1S
IC
PO

Here we can see teen mutual funds current price and market price of these mutual funds. Mutual
fund price is changed on the daily bases and each of these funds holds several stocks. So it is
very difficult to determine the exact value of the mutual fund. Mutual fund companies have
chosen to value their portfolio once daily, and each day this is the price at which investors must
buy and sell the mutual fund. Here we can see all of the market price is higher than the current
price. But the VAMLRBBF current price is 13.01 and market price is 12.29. So these mutual
fund holders can get capital loss by 0.72 per unit. POPULAR1MF get the highest capital gain by
7.82 per unit. The ABB1STMF holders can get 8.1 per unit. Here I can see that ISTPRIMFM get
the capital gain by the 2.51 per unit. Except from others ICBAGRANI1 current price is zero and
the market price of the NAV is 10.01 per unit. Here I can say that there is some problem with the

17 | P a g e
current price because the current price is cannot be zero. If the time of this mutual fund is over
than the current price can be zero.

Price to NAV Ratio

1.2
1
0.8
0.6
Ratio number

0.4
0.2
0
F1

I1
F

F
F

F
IC
CE

TM
M

TM

FM
LS

BB

N
M
BM
R1

RA
BB

A
LR

M
1S

1S
A

SL
LA

LO

RI
G
LI

BL

BB
M
LI

BA
BI

TP
PU

G
M

A
RE

SE

A
LR

IC
V
SE

1S
IC
PO

Price to NAV ratio: Price to NAV ratio means that how much investor gets return from the
investment. This ratio shows us how expensive share is compared to its net asset value. Lower
the value higher the return from the investment. Normally, if P/NAV is lower than 1, it is a good
sign. But P/NAV is more trustful when real estate portfolio is consisted not from land, but from
ready cash generating property investments.

Current fund price per unit

Piece to NAV ratio=
NAV market price per unit

This chart shows us that most of the mutual fund has less than 1 which is better for the investors.
On the other hand there is only one mutual fund that has more than one value which is not good

18 | P a g e
for the investors. POPULAR1MF and ABB1STMF have lowest value 0.34 and 0.35 which is
good for the fund. But ICBAGRANI1 and SEMLIBBLSF are close to 1 which risky for the fund.

NAV to cost ratio

1.4
1.2
1
0.8
Ratio number

0.6
0.4
0.2
0
F F F1 1 F IC I1 F F F
BL
S M M CE B M N M M M
B R 1 B N RB A RA 1 S T
1S
T
M
F
LI LA LO LI
A
M
L
ISL G L
BB RI
M PU RG RE A B BA EB A T P
E L V IC IC S 1S
S PO

NAV to cost price ratio: NAV to cost price ratio is the net asset value divided by the cost
price of the mutual find which is shows us that how investors are get benefited when they buy
the mutual fund. Higher the ratio higher the income and lower the ratio lower the income.

After finding this information I can see that POPULAR1MF, LRGLOBMF1, RELIANCE1 and
SEBL1STMF ratio is higher than the 1. So the new investors are willing to buy this mutual fund
because they can get benefit from these mutual funds. After buying this mutual fund there is a
huge possibility to increase the price of mutual fund.

On the other hand all other mutual fund NAV to cost ratio is lower than the 1. So I can say that
the new investors can get capital loss if they invest in these mutual funds. Because, the cost price
of these mutual fund is higher than the NAV market piece.

19 | P a g e
8.1 Performance analysis of Asset Management Companies

Mutual fund performance can be measure by the use of NAV per unit of different data. I could
be compare between two different years. NAV per unit is use to compare the performance like
the NAV on january1 to the NAV on December 31. However, the NAV change from time to
time which is makes an effect on the mutual fund performance.

Mutual fund managers use the fund to generate the money (like dividends and interest earned) to
its shareholders. Additionally, mutual fund managers are always tried to make the best effort to
distribute the accumulated capital gains to the shareholders. A capital gain is possible when the
selling price is higher than the buying price of the mutual fund. Since these two components,
income and gains, are regularly paid out, the NAV decreases accordingly. Asset Management
Company income is depending on the investor’s investment. If they invest more than they
income will be higher. So the correctly measure the performance of asset management
companies is very important for them.

Net asset value (NAV): Mutual funds are priced based on the methodology of assets and
liabilities. Net asset value is the value of a total asset minus total liabilities. Net asset value
reflect per share or the unite price of the fund on a specific date or time. NAV is the price at
which the share or units of the fund registered with the Bangladesh security exchange
commission (SEC) and traded in share market. Net asset value is calculated by this formula:

20 | P a g e
By using this formula we can use NAV per unit price. We can use this rate to buy or sell mutual
fund in the stock market. In Bangladesh open ended and close ended fund use this NAV per unit
to buy or sell unit of fund.

There are 37 asset management companies which are listed by the Bangladesh security exchange
commission. Here we evaluate the performance of first five assets Management Company. The
companies are:

 AIMS of BANGLADESH LIMITED

 RACE Asset Management Company
 VIPB Asset Management Company
 LR Global Bangladesh Asset Management Company Limited
 ICB Asset Management Company

year NAV at cost per unit

NAV at market value
per unit
2018 11.95 13.81
2017 11.78 14.07
2016 11.65 12.06
RELIANCE ONE 2015 12.05 12.68
(AIMS of 2014 12.05 12.58
BANGLADESH 2013 11.80 11.90
LIMITED) 2012 11.29 10.35
Reliance one is a mutual fund of AIMS of BANGLADESH LIMITED company. Here is the
seven years NAV cost and market value.

Interpretation: all the years the NAV cost is lower than the NAV market price except in 2012.
In year 2012 the NAV cost is higher than the NAV market price. In 2013 NAV cost and market
price are pretty much closer but now at the present moment NAV market price is 13.81 and
NAV cost price is 11.95 which is means that this mutual selling price is higher than the cost
price. And day by day the market price is increase. So we can say that this fund can be more
profitable in future which is good for the investors.

year NAV at cost per unit NAV at market value

per unit
2018 11.36 19.33
GRAMEEN ONE : 2017 11.17 19.71
2016 11.22 17.40
21 | P a g e
 SCHEME TWO 2015 11.45 19.52
(AIMS of 2014 13.28 19.37
BANGLADESH 2013 12.75 16.75
LIMITED) 2012 11.79 15.19
GRAMEEN ONE SCHEME TWO is the close ended mutual fund of AIMS of BANGLADESH
LIMITED. Here is the seven years NAV cost and market value.

Interpretation: here we can see that the differences of NAV cost and market price is very high
from the previous fund. The NAV market price is rapidly increase rather than the increase of
NAV cost. The highest value of NAV market price is 19.71 in previous year. So 2017 is very
profitable for the investors. The NAV cost and market price fluctuate several times in seven
years.

year NAV at cost per unit NAV at market value

per unit
2018 12.48 31.93
GRAMEEN ONE : 2017 21.55 34.91
SCHEME ONE 2016 20.14 30.78
(AIMS of 2015 19.35 28.44
BANGLADESH 2014 27.50 51.39
LIMITED) 2013 11.93 25.23
2012 14.13 21.62
GRAMEEN ONE: SCHEME ONE is a close ended mutual fund of AIMS of BANGLADESH
LIMITED. Here is the seven years NAV cost and market value.

Interpretation: we know that a capital gain occurs on any security that is sold for a price higher
than the purchase price that was paid for it and in this mutual fund the NAV market price is
higher than the NAV cost price. The highest difference of this mutual fund in 2011 and in this
year investors get most capital gain from this mutual fund.

year NAV at cost per unit NAV at market value

per unit
2018 11.47 11.44
2017 11.44 11.91
2016 11.46 11.09
EBL First Mutual 2015 11.76 10.82
Fund(RACE) 2014 11.71 10.28
2013 12.17 11.14
2012 12.62 11.52
EBL First Mutual Fund is a close ended mutual fund of RACE. Here is the seven years NAV
cost and market value.

22 | P a g e
Interpretation: most of the time in the seven year NAV cost is higher than the NAV market
price excepted in 2017. In this year investor got capital gain from this fund. At present NAV cost
is little bit higher than the NAV market price. So now it is risked to invest in this fund. New
investor do interested to buy this fund. As far as we know that a capital gain occurs on any
security that is sold for a price higher than the purchase price that was paid for it. So this mutual
fund is risky to buy.

year NAV at cost per unit NAV at market value

per unit
2018 11.58 11.26
2017 11.57 12.09
2016 11.10 11.09
IFIC Bank 1st Mutual 2015 11.36 11.21
Fund (RACE) 2014 11.46 11.05
2013 11.90 11.24
2012 11.88 10.83
IFIC Bank 1st Mutual Fund is a close ended mutual fund of RACE. Here is the seven years NAV
cost and market value.

Interpretation: in this mutual fund we can see that previous year the cost is lower than the NAV
market price. Investor could get benefited from that year. But at present the NAV cost is higher
than the NAV market price. And all other years the NAV cost price is higher than the NAV
market years.

year NAV at cost per unit NAV at market value

per unit
2018 11.66 11.31
2017 11.72 12.14
2016 11.16 11.07
Popular Life First 2015 11.70 11.49
Mutual Fund (RACE) 2014 12.19 11.74
2013 11.88 10.29
2012 11.34 9.50
Popular Life First Mutual Fund is a close ended mutual fund of RACE. Here is the seven years
NAV cost and market value.

Interpretation: from the year 2012 to 2016 the NAV cost is higher than the NAV market price.
At that time investors could not get any benefit from this fund. After that in 2017 the NAV cost
price is lower than the NAV market price. But in the 2018 again the NAV cost price is higher
than the market price of this fund. As far as we know that a capital gain occurs on any security
that is sold for a price higher than the purchase price that was paid for it. So this mutual fund is
risky to buy.
23 | P a g e
 year NAV at cost per unit NAV at market value
per unit
2018 11.51 11.31
2017 11.39 10.90
2016 11.39 11.62
PHP First Mutual 2015 11.62 10.85
Fund (RACE) 2014 11.97 11.74
2013 11.30 9.48
2012 10.91 8.85
PHP First Mutual Fund is a close ended mutual fund of RACE. Here is the seven years NAV
cost and market value.

Interpretation: all the sex year 2012 to 2018 omitted 2017 year. In year 2017 the NAV cost is
little bit lower than NAV market price of the PHP First Mutual Fund. At the beginning of the
year 2012 the NAV cost price is much higher than the NAV market price. At present time the
NAV cost price is higher than the NAV market price. Now the new investors do not interested to
buy this mutual fund. Because the NAV cost value is high.

year NAV at cost per unit NAV at market value

per unit
2018 11.87 12.99
2017 12.36 16.17
2016 11.93 13.36
SOUTHEAST BANK 2015 11.66 12.29
2014 11.64 12.21
1ST MUTUAL 2013 11.09 11.22
FUND (VIPB) 2012 11.10 10.93
SOUTHEAST BANK 1ST MUTUAL FUND is the close ended mutual fund of VIPB. Here is
the seven years NAV cost and market value.

Interpretation: From 2012 to 2018 the NAV cost is lower than the NAV market price. As we
know that capital gain will be possible when the NAV market price is higher than the cost price.
So here we see that all the investor can get capital gain from this seven year investment in
mutual fund. In 2017 the NAV cost and market price is higher than the others year and also got
the higher return.

year NAV at cost per unit NAV at market value

per unit
24 | P a g e
 2018 12.66 13.94
2017 13.14 17.29
2016 12.56 14.26
2015 12.31 13.06
NLI FIRST 2014 12.10 12.52
MUTUAL FUND 2013 11.47 11.58
(VIPB) 2012 11.36 11.32
NLI FIRST MUTUAL FUND (VIPB) is a close ended mutual fund of VIPB. Here is the seven
years NAV cost and market value.

Interpretation: In 2012 NAV cost price is higher than the NAV market price and for that reason
in this year investor can get capital loss. But in the 2013 to 2018 the NAV market price is higher
than the NAV cost price. In 2017 the investor got the highest value of capital gain. According to
the year 2017 the NAV cost is decrease by 13.14 to 12.66 and the NAV market price also
decrease from 17.29 to 13.94. At this present position the fund is more attractive to the new
investors.

year NAV at cost per unit NAV at market value

per unit
2018 10.25 10.79
2017 10.39 12.69
DBH FIRST 2016 10.03 10.52
MUTUAL FUND 2015 10.70 10.30
(LR Global 2014 10.78 10.16
Bangladesh) 2013 10.27 10.00
2012 10.15 9.16
DBH FIRST MUTUAL FUND is a close ended fund of LR Global Bangladesh. Here is the
seven years NAV cost and market value.

Interpretation: From 2012 to 2015 the NAV cost is higher than the NAV market price.
Investors did not get any capital gain from the 2012 to 2015. But in 2016 the NAV market price
is little bit higher than the NAV cost price and the investors got capital gain from this period. In
year 2017 the difference of NAV market price and cost is 2.3. The investors got highest value of
return in this year.

year NAV at cost per unit NAV at market value

per unit
25 | P a g e
 2018 10.18 10.78
GREEN DELTA 2017 10.40 12.76
MUTUAL FUND 2016 10.02 10.58
(LR Global 2015 10.52 10.32
Bangladesh) 2014 10.40 10.20
2013 9.97 9.56
2012 9.75 8.96
GREEN DELTA MUTUAL FUND is a close ended mutual fund of LR Global Bangladesh. Here
is the seven years NAV cost and market value.

Interpretation: Here we can see that the NAV cost is higher than the NAV market price from
year 2012 to 2015. After that the NAV cost is lower than the NAV market price. At present day
the NAV market price is little bit higher than the NAV cost. So now the new investors will be
more interested in this fund because of its continuing capital gain.

year NAV at cost per unit NAV at market value

per unit
2018 10.29 11.33
2017 10.04 11.99
LR GLOBAL 2016 9.98 10.32
BANGLADESH 2015 10.43 10.07
MUTUAL FUND 2014 10.93 10.50
ONE 2013 10.81 10.62
(LR Global 2012 10.62 10.01
Bangladesh)
LR GLOBAL BANGLADESH MUTUAL FUND ONE is a close ended mutual fund of LR
Global Bangladesh. Here is the seven years NAV cost and market value.

Interpretation: In 2018 the NAV market price is higher than the NAV cost price. At this point
the existed investors can get capital gain and the new investors are also willing to buy this
mutual fund. On the other hand 2017 and 2016 also investors got capital gain. But from 2012 to
2015 they could not get any capital gain from their investment. Because the in this time period
the NAV cost price is higher than the NAV market price.

year NAV at cost per unit NAV at market value

per unit
2018 11.79 9.38
2017 13.67 9.45
26 | P a g e
 2016 14.95 10.35
2015 15.30 10.99
ICB AMCL SECOND 2014 15.26 10.93
NRB MUTUAL 2013 15.01 11.39
FUND 2012 16.24 13.93
(ICB Asset
Management
Companies)
ICB UNIT FUND is a close ended mutual fund of ICB Asset Management Companies. Here is
the seven years NAV cost and market value.

Interpretation: ICB UNIT FUND price is a close ended and its unit price is lower than the other
mutual fund. Here we can see that the NAV cost price is consistently decreasing through the year
2012 to 2018. But the NAV market price is lower and the price is also decreasing through the
year 2012 to 2018. The investors of this fund never face any capital gain. So this mutual fund is
very much good the mutual fund investors.

year NAV at cost per unit NAV at market value

per unit
2018 42.67 31.17
2017 37.32 24.45
ICB AMCL FIRST 2016 33.51 21.24
NRB MUTUAL 2015 34.63 24.17
FUND 2014 35.13 24.92
(ICB Asset 2013 24.37 18.02
Management 2012 26.81 21.82
Companies)
ICB AMCL FIRST NRB MUTUAL FUND is close ended mutual fund of ICB Asset
Management Companies. Here is the seven years NAV cost and market value.

Interpretation: From the year 2012 to 2018 the NAV cost price is higher than the NAV market
price. At present time the difference of NAV market price and the cost price is -11.5 which is not
good for the investors. The new investors will not be willing to buy this mutual fund. The lowest
capital lost in 2012 by the 4.99 per unit. In 2017 and 2016 the lost is higher than the 10 per unit.

27 | P a g e
9 Comparison among of Asset Management companies
Here we compare the performance of five different Asset Management Companies with the latest
information of net asset value (NAV) of cost and market price of these companies.

Mutual fund Year NAV at cost NAV at market Capital gain

per unit value per unit or loss
ICB AMCL FIRST NRB MUTUAL 2018 42.67 31.17 -11.5
FUND
(ICB)
ICB AMCL SECOND NRB 2018 11.79 9.38 -2.41
MUTUAL FUND
(ICB)
LR GLOBAL BANGLADESH 2018 10.29 11.33 1.04
MUTUAL FUND ONE
(LR Global Bangladesh)
GREEN DELTA MUTUAL FUND 2018 10.18 10.78 0.6
(LR Global Bangladesh)
NLI FIRST MUTUAL FUND 2018 12.66 13.94 1.28
(VIPB)
SOUTHEAST BANK 1ST 2018 11.87 12.99 1.12
MUTUAL FUND (VIPB)
PHP First Mutual Fund (RACE) 2018 11.51 11.31 -0.2
EBL First Mutual Fund(RACE) 2018 11.47 11.44 -0.03

RELIANCE ONE (AIMS of 2018 11.95 13.81 1.86

BANGLADESH LIMITED)
GRAMEEN ONE : SCHEME TWO 2018 11.36 19.33 7.97
(AIMS of BANGLADESH
LIMITED)

Interpretation: We can see that the ICB AMCL SECOND NRB MUTUAL FUND gets the
-2.41 per unit capital loss and the ICB AMCL FIRST NRB MUTUAL FUND gets the capital
28 | P a g e
loss -11.5 per unit. AIMS of BANGLADESH LIMITED Company get the 7.97 capital gain by
the GRAMEEN ONE: SCHEME TWO fund and another mutual fund which is called
RELIANCE ONE get1.86 capital gain. RACE is an asset management companies which is get
capital loss of -0.2 and -0.3 per unit by the two mutual funds. LR Global Bangladesh gets the
capital gain 1.04 and 0.6 by the two mutual funds. The VIPB Company gets the capital gain by
2.4 from the both mutual fund. If we follow the hierarchy structure than we get that:

NO 1: AIMS of Bangladesh limited (capital gain 9.83 per unit)

NO 2: VIPB (capital gain 2.4 per unit)

NO 3: LR Global Bangladesh (capital gain 1.64 per unit)

NO 4: RACE (capital gain -0.23 per unit)

NO 5: (ICB) Investment Corporation Bangladesh (capital gain -13.91 per unit)

10 Problems of mutual fund in Bangladesh

Asset management companies are failed to attract investors. Investors are faced some problem
and afraid to invest in mutual fund. There are also had lacks of good corporate governance,
accountability of accounting and professional audit and integrity of fund managers to operate the
mutual fund in Bangladesh.

In Bangladesh there are only 17 asset management companies, 8 custodians and trustee licensed
by the BSEC. The asset management companies manage only 50 billion taka which is 3% of the
total capital market in Bangladesh. Ultimately the portfolio managers control the mutual fund of
the investors. They face some problem to manage the mutual funds. Some of them given below:

 Like other investment mutual funds have no guaranteed return but the return of the
mutual fund is getting much lower than the other investment like bond, Treasury bill and
share market. So the investors are not willing to invest in mutual funds.
 In Bangladesh investors of mutual fund must pay lots of fee like formation fee, trustee
fee, management fee, custodian fee etc. the return from this investment is getting low for
this expense.
 Naturally people have lack of knowledge about mutual fund those who are participate in
Bangladesh. Many of us do not understand mutual fund and those who are understand
mutual fund they do not believe in the asset management companies.
29 | P a g e
 Mutual fund managers do not properly disclose their information to the investors so they
are discouraged by mutual fund managers. The investors cannot believe to their fund
managers.
 Compare to the share market the size of the share market is higher than the mutual fund
market. The size of the share market investors is also higher than the mutual fund
investors.
 Mutual fund managers need huge liquid cash to invest and get the return but in the open
ended fund the investors can withdraw money at any time.
 Mutual fund investors have low patience to get benefit from the investment. Investors
want return firstly from their investment.
 Some mutual funds managers mislead the investors by the improper advertisement of
mutual fund. A fund can therefore manipulate prospective investors by using names that
are attractive and misleading.
 New investors do not evaluate the performance of mutual fund so they cannot measure
how they can get return from the investment. Because the asset management companies
do not disclose all information of mutual fund.
 Mutual funds, although regulated by the government but there are no insured against
losses from the mutual fund. The Federal Deposit Insurance Corporation (FDIC) only
insures against certain losses at banks, credit unions, and savings and loans, not mutual
funds.
 Altimetry the mutual fund managers take all the decisions about which securities to buy
and sell. So this make difficult for the investors to manage their portfolio.

After the discussion of the some problems there are some ways to reduce these problems.
Some of them are given below:
 Bangladesh Security Exchange Commission (SEC) can flexible their rules and
regulation so that the new investors are interested to invest in mutual fund.
 Most of the mutual fund managers use past data to evaluate the performance of
the mutual fund in Bangladesh. This is not easy to predict the future value of the
fund by using past performance. So professional fund managers should use some
affective method to evaluate the performance of mutual fund.
 If the number of investors increase than the number of buyer and seller will be
increase. As the number of seller and buyer increase the number of Asset
management companies will be increase. So there will be a competition between
these mutual fund managers and improve mutual fund manager’s performance.
30 | P a g e
 Diversification of a portfolio is helpful to investors to reduce the risk. So the
mutual fund managers can diversify the investors fund to invest in bond share
market and other securities.
 There is needed a proper communication between the fund managers and the
investors.
 Government can audit the financial statement of mutual funds so that the mutual
fund managers can not present the false financial statement to attract the
investors.

31 | P a g e
11 Recommendation
In my findings and analysis I found that most of the mutual funds have been earning average
return. For strong research I choose teen mutual fund and five asset management companies. The
net asset value is use from 2012 to 2018 to calculate the NAV to cost ratio and price to NAV
ratio. By the analysis of this ratio I can see that most of the fund manager’s performance is an
average. If the mutual fund managers developed their performance they should exercise more
and more. So the fund managers need new investors to develop their performance. Bangladesh
government should more focus on the mutual fund industry. From the above analysis, it can be
noted that the growth oriented mutual funds have not performed better than their respect to
volatility most of the funds have not performed better. There is a lot of opportunity to contribute
in the national economy. Because the mutual fund industry is small by compare to the other
capital market instrument. The mutual fund industry still increases. In 2018 there few more asset
management companies that are listed in the Bangladesh security exchange commission.
Bangladesh security exchange commission do an important role in the mutual fund industry.
They impose the rules and regulation. So they can make it easier to invest in the mutual fund.
New investors should pay various types of fee to invest in the mutual fund. Bangladesh security
exchange commission can reduce this expense to increase attraction of the new mutual fund
investors. Government should improve in corporate governance in the listed companies. Insure
to investors that the accountability of fund managers is accurate and also insure that mutual fund
is the safe place to invest.

32 | P a g e
11.1 Conclusion
In Bangladesh, the mutual fund is now growing stage. Every year the number of investors and
the invested money continuously increase. Although still small in size, mutual funds have
contributed toward broadening the base of the country’s capital market and helped the investors
to gain high and relatively secure returns. Despite bright prospects of mobilizing savings and
providing investment opportunities to small savers and the ability to meet different risk profiles
through providing a wide range of products, one major factor as to why the mutual funds have
not emerged as a preferred saving mode is the lack of availability of quality shares and the
underdeveloped state of the capital market. Most of the mutual fund in Bangladesh is close
ended and few of them are open ended. The buy and sell of Open ended mutual fund is very
difficult. The price of mutual fund does not show in the stock exchange. Exchange traded fund is
recently launched in Bangladesh. For Bangladesh, need more organizational investors to make
capital market more powerful than the previous. So the capital market needs more skillful and
knowledgeable professional fund managers to perform well in mutual fund industry.

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12 References

http://lankabd.com/mutual-funds/search-mutual-funds?siteLanguage=en&siteLanguage=en&d-
5976978-p=1

https://bdnews24.com/bangladesh/2010/11/03/prime-financial-a-hit

https://finance.zacks.com/evaluate-daily-price-change-mutual-fund-10940.html

http://www.sec.gov.bd/crequest/Draft_Securities_and_Exchange_Commission__Exchange_Trad
ed_Fund__Rules,_2016_26.05.pdf

http://mypeacehouse.blogspot.com/2014/10/list-of-asset-management-companies.html

http://www.sec.gov.bd/home/fundmng

http://www.sec.gov.bd/home/assetmancom

http://www.sec.gov.bd/home/custodian

http://www.sec.gov.bd/home/trusty

http://www.investingforbeginners.eu/p_nav_ratio

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