Mutual funds fail to play expected role in capital markets

Says BSEC commissioner Dr Mizan at launch of country’s first non-dividend mutual fundc

Published : 18 Jul 2022 11:57 PM

Mutual funds failed to meet the expectation of the investors in the capital markets, said Dr. Mizanur Rahman, commissioner of the Bangladesh Securities and Exchange Commission (BSEC).

“Mutual funds play a major role in capital markets. But it is still absent in our country,” said Rahman while launching the country’s first non-dividend mutual fund ‘Sandhani AML SLIC Fixed Income Fund’ at the Capital Market Journalists’ Forum auditorium in the capital’s Purana Paltan on Sunday.

“In the last 10 years, mutual funds have failed to meet the expectations of investors,” he categorically said.

The BSEC Commissioner also said that if the market falls, mutual funds underperform and cannot provide stable returns to investors.

Tarique Amin Bhuiyan, managing director of the Dhaka Stock Exchange said that there is some discomfort in the market due to the technology. “However, we expect the Alternative Trading Board (ATB) to be operational by September,” he noted.

He said, currently there are as many as 81 open-ended mutual funds. By the end of September DSE will be able to bring them to the ATB.

On behalf of the fund manager of Sandhani AML SLIC Fixed Income Fund, it is said that this is the first ‘no dividend fixed income fund’ in the country approved by the BSEC.

Investors can buy and sell Prospective AML SLIC Fixed Income Fund at NAV price and they can withdraw their investments at any time and have the opportunity to take capital gains if any. I hope this will be an example for other fund managers, he added.The fund will also help investors reduce portfolio risk and at the same time avail of comparatively higher tax concessions.

The fund’s initial pooled fund size is Tk 50 crore. Out of which, Tk 10 crore has been given by Sandhani Life Insurance Company as a sponsor. The remaining Tk 40 crore will be raised from general and institutional investors.

The fund’s initial subscription began on Sunday (July 17), and will continue till August 30.

Trustee of the fund is Bangladesh General Insurance Company Limited and Custodian BRAC Bank Limited.

Mujibul Islam, Chairman of Sandhani Life Insurance, Bangladesh General Insurance Company’s Financial Advisor Anisuj Zaman Chowdhury, Sandhani Asset Management’s Chairman Shaheduzzaman Chowdhury and Managing Director Mir Ariful Islam were also present on the occasion.