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10 Mutual Funds You Can Buy in Nepal

Updated on January 28, 2017
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Roberto is a research analyst for a stock brokerage company in Nepal. He has been writing about the Nepali stock market since 2013.

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With the flotation of NCM Mutual Fund in 2050 B.S. (1993 A.D.), the Nepali market entered into the era of mutual funds. It was an open-ended scheme with a collected fund of just Rs. 100 Million. These days, merchant bankers are coming up with funds 5 to 10 times larger than that, which have become a pivotal part of the Nepali stock market.

10 Schemes Trading in The Stock Market in 2016

Currently, there are 10 mutual fund schemes running in the Nepali stock market. Two mutual funds are upcoming and are in the pipeline to be approved. These mutual funds have to be approved by SEBON (Securities Board of Nepal), first to publish the offer letter and accept the funds as initial public offerings. When the units are allotted, they are listed in NEPSE (Nepal Stock Exchange) where they can be freely bought and sold. NEPSE is Nepal's only stock exchange market.

List of Mutual Funds in Nepal

  1. Siddhartha Investment Growth Scheme -1 (SIGS1)
  2. Siddhartha Equity Oriented Scheme (SEOS)
  3. Laxmi Value Fund-1 (LVF1)
  4. Nabil Balanced Fund-1 (NBF1)
  5. NMB Sulav Investment Fund-1 (NMBSF1)
  6. Global IME Samunnat Scheme-1 (GIMES1)
  7. NIBL Sambriddhi Fund-1 (NIBSF1)
  8. Nabil Equity Fund (NABILEQUITY)
  9. NMB Hybrid Fund L-1 (HYBRID)
  10. NIBL Pragati Fund (PRAGATI)

These mutual funds are managed by merchant bankers (fund managers) and sponsored by a commercial bank ('A' class bank in Nepal). Only those merchant bankers that are direct subsidiaries of commercial banks can float and manage mutual funds in Nepal. As such, mutual fund companies are full subsidiaries of commercial banks.

List of mutual fund companies:

  1. NIBL Capital Market
  2. Laxmi Capital Market
  3. Global IME Capital (previously known as Elite Capital)
  4. Siddhartha Capital
  5. NMB Capital
  6. Nabil Investment Banking Ltd.
  7. CBIL Capital
  8. Prabhu Capital

Interested in mutual funds?

Are you looking forward to investing in mutual funds? or, Have you already invested in mutual funds in Nepal?

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Mutual Fund Schemes and Their NAVs

(click column header to sort results)
Mutual Fund Scheme  
Initial Fund (Rs.)  
Date of Maturity  
NAV as of Jan 20 2017 (Rs.)  
Siddhartha Investment Growth Scheme - 1
500,000,000
December 2017
24.78
Nabil Balanced Fund - 1
750,000,000
March 2018
22.37
Laxmi Value Fund - 1
500,000,000
March 2020
12.01
Siddhartha Equity Oriented Scheme
1,000,000,000
July 2019
14.28
NMB Sulav Investment Fund
750,000,000
September 2019
15.66
NIBL Sambriddhi Fund - 1
750,000,000
December 2021
13.55
Global IME Samunnat Scheme - 1
1,000,000,000
February 2021
9.16
Nabil Equity Fund
1,000,000,000
September 2021
9.81
NMB Hybrid Fund L-1
1,250,000,000
September 2023
10.17
NIBL Pragati Fund
750,000,000
December 2023
9.93
Mutual Fund Schemes in Nepal and their latest Net Asset Values (NAV)

1. Siddhartha Investment Growth Scheme-1

Fund Size: Rs. 500 Million

Maturity Period: 5 Years

Expires: December 2017

Highest NAV: Rs. 34.329 on July 29, 2016

SIGS-1 was the first mutual fund scheme in Nepal to conceptualize the industry after the introduction of the mutual fund regulatory act in 2010. It started with an initial fund of Rs. 500 million (Rs. 50 Crores) and is a close-end scheme that expires on December 2017. SIGS-1 is a more risky scheme in a sense that it is more focused on a higher possible capital appreciation. As such, it has not allotted any money in "safe" investments like fixed deposits.

The fund that started with just Rs. 500 million has invested a total of Rs. 1.12 billion in stocks, and has Rs. 50 million in dividends, rights offerings and initial offerings.

Its NAV had reached the highest level on July 29 2016 at Rs. 34.329, which is more than a three-fold jump from its par value of Rs. 10 only. It has provided 64.5% in cash dividends so far: 30% in FY 2015-16, 15% in FY 2014-15, 15% in FY 2013-14, and 4.5% in FY 2012-13.

Siddhartha Investment Growth Scheme-1 (SIGS1) and Siddhartha Equity Oriented Scheme (SEOS) are managed by Siddhartha Capital as the merchant banker.
Siddhartha Investment Growth Scheme-1 (SIGS1) and Siddhartha Equity Oriented Scheme (SEOS) are managed by Siddhartha Capital as the merchant banker.

2. Siddhartha Equity Oriented Scheme

Fund Size: Rs. 1 Billion

Maturity Period: 5 Years

Expires: July 2019

Highest NAV: Rs. 18.95 on July 29, 2016

After the successful management of SIGS-1, Siddhartha Capital came with another close-end mutual fund scheme in 2014. It has provided 16% in cash dividend so far from the profit it made up to the end of FY 2015-16. The fund that started with an initial pool of Rs. 100 Crores has already invested Rs. 113 Crores in listed stocks, Rs. 10 Crores in fixed deposits, and Rs. 2.4 Crores in bonds and debentures.

3. NMB Sulav Investment Fund-1

Fund Size: Rs. 750 Million

Maturity Period: 5 Years

Expires: September 2019

Highest NAV: Rs. 20.36 on July 29, 2016

As of December 2016, the investment of NMBSF-1 has jumped up to Rs. 963.3 million from an initial fund of Rs. 750 million. It has set aside Rs. 75 million in fixed deposit account and Rs. 14 million in bonds and debentures. So far, it has provided 20% cash dividend from the profit it earned up to the end of FY 2015-16.

Weekly NAV chart of NMBSF1
Weekly NAV chart of NMBSF1 | Source

4. NIBL Sambriddhi Fund-1

Fund Size: Rs. 800 Million

Maturity Period: 7 Years

Expires: December 2021

Highest NAV: Rs. 18.32 on July 29, 2016

With investment of Rs. 1.18 billion in stocks of listed companies, Rs. 100 million in fixed deposits, Rs. 33 million in bonds and debentures, and Rs. 78.61 million in public offerings, NIBSF-1's total investment has reached to over Rs. 1.39 billion. That is a massive rise from the initial collection of Rs. 800 million. As such, it has also offered cash dividend to its scheme holders: 15% from the profits it had earned up to the end of fiscal year 2015-16.

5. Nabil Balanced Fund-1

Fund Size: Rs. 600 Million

Maturity Period: 5 Years

Expires: March 2017

Highest NAV: Rs. 30.71 on July 29, 2016

Nabil Balanced Fund-1 (NBF1) had reached to a height of Rs 30.71 as compared to its par value of Rs. 10. It has an impressive Rs. 1.47 billion in investment, which is a significant return on its initial Rs. 600 million fund. It has also set Rs. 75 million in fixed deposits.

It has provided 30% cash dividend in FY 2015-16 and 14% in FY 2013-14. It had pledged 5.5% in the middle of FY 2013-14 but this issuance was suspended by the regulatory authority as dividends can only be declared from the profits made in a whole fiscal year.

6. Laxmi Value Fund-1

Fund Size: Rs. 500 Million

Maturity Period: 5 Years

Expires: March 2020

Highest NAV: Rs. 16.11 on July 29, 2016

LVF1 is the first mutual fund scheme sponsored by Laxmi Bank, and managed by Laxmi Capital. It has saved up Rs. 80 million in fixed deposits and has invested Rs. 396 million in stocks. The fund which started in 2015 has already provided 25% from the profit it earned in FY 2015-16.

The merchant banker (Laxmi Capital) had proposed to invest approximately 58% in equity or equity-based instruments (like stocks), 38% in fixed income securities (like fixed deposits schemes), and rest of the fund would be at call.

7. Global IME Samunnat Scheme-1

Fund Size: Rs. 1 Billion

Maturity Period: 5 Years

Expires: February 2021

GIMES1 initially published offer for a fund of Rs 800 million, but when it was oversubscribed, the fund was declared to be worth Rs. 1 billion. It posted a net loss of Rs. 33 million in November 2016. It has invested Rs. 676 million in stocks and Rs. 100 million in fixed deposit as per its financial statement published on November 30, 2016.

8. NMB Hybrid Fund L-1

Fund Size: Rs. 800 Million

Maturity Period: 5 Years

Expires: October 2021

Highest NAV: Rs. 10.07 on December 16, 2016

NMB Hybrid Fund L-1 is a close-end mutual fund scheme managed by NMB Capital and sponsored by NMB Bank. It collected funds in September 2016, and has made investments worth Rs. 2 million in initial public offerings. Rs. 100 million has been set aside as fixed deposits in various bank accounts to garner interests. Its NAV at the end of November was Rs. 10.02 (par value of Rs. 10).

9. Nabil Equity Fund

Fund Size: Rs. 1.25 Billion

Maturity Period: 7 Years

Expires: November 2023

Similar to Global IME Samunnat Scheme-1 and NMB Hybrid Fund L-1, Nabil Bank's newest mutual fund scheme - Nabil Equity Fund was also oversubscribed. Hence, with respect to the acting law governing mutual fund schemes, its fund size was increased from Rs. 1 Billion to Rs. 1.25 Billion. As such, 125 million units were allotted to the subscribers.

Until the end of November, it has invested Rs. 47.14 million in shares of companies listed in Nepal Stock Exchange. Likewise, it has invested Rs. 501 thousand in stocks of unlisted companies (IPO) and has saved up Rs. 70 million in fixed deposit accounts to garner regular interest.

10. NIBL Pragati Fund

Fund Size: Rs. 600 Million

Maturity Period: 5 Years

Expires: December 2021

Nepal Investment Bank recently floated Rs. 600 million worth of this particular mutual fund scheme. Its paid up value per script also stands at Rs. 10 per unit. At this point, it is still undergoing allotment. Once the scrips are allotted and the units listed in NEPSE, they can be bought in the stock market.

The scheme was over-subscribed by 6.5 times, so the fund size is probably going to be 25% bigger (i.e. worth Rs. 750 millions).

Upcoming Mutual Fund Schemes in Nepal

Name
Fund
Merchant Bank
Status
Laxmi Value Fund - 2
Rs. 1 Billion
Laxmi Capital Market
In SEBON Pipeline
Siddhartha Equity Fund
Rs. 1.2 Billion
Siddhartha Capital
In SEBON Pipeline

© 2016 Roberto Eldrum

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