A close-end mutual fund, launched by Eastern Bank Limited, is making debut in the stock market by next month.
"The EBL First Mutual Fund valued at Tk 1.0 billion will hit the market by April next," a market source told the FE.
The mutual fund, which is considered as risk-free tool in stock trading, is being floated by a commercial bank for the first time in Bangladesh.
This will be one of the largest mutual funds launched earlier. The Grameen One Scheme Two Mutual Fund amounting to Tk 1.25 billion is still the largest mutual fund followed by ICB 2nd NRB Mutual Fund with Tk 1.0 billion.
RACE Asset Management, the second generation AMC (Asset Management Company), will manage the mutual fund, sponsored by Eastern Bank Limited (EBL).
The RACE was formed by a group of Wall Street veterans with many years of experience in investment management and capital market research.
Last year, the Securities Exchange Commission (SEC) awarded the company licence to operate as AMC in the country's stock markets.
Of the total amount, 60 per cent will be allocated for pre-IPO placement, 20 per cent for public and 20 per cent for sponsor, sources said. Per unit price of the mutual fund will be Tk 10.
The state-owned Investment Corporation of Bangladesh (ICB) will act as custodian and trustee for the forthcoming mutual fund, he added.
"This is good news for the country's stock markets as it is always considered risk-free investment tool and one of the vehicles for the growth of the stock markets," said a capital market expert.
Professionally managed, innovative and quality mutual funds will meet the growing demand of investors in the market, he added.
Currently, a total of 16 mutual funds are listed on the bourses. Of them, ICB and its subsidiaries manage 12 mutual funds, AIMS Bangladesh three and BSRS one.
Mutual funds in the neighbouring countries account for more than 40 per cent of the total market capitalisation while in Bangladesh they contribute only three per cent.
