Public subscription of ‘Rupali Life Insurance First Mutual Fund’ begins

FE Report
Open end mutual funds in Bangladesh have a 'wide range of scope' for further development as the size of the mutual fund sector is still small along with a crisis in public confidence, said an asset management company chief Tuesday.
"There is a good scope for further development of open end mutual fund sector in Bangladesh and small investors should come forward to develop such diversified instrument in the stock market," said Moin Al Kashem, Managing Director & CEO of Prime Finance Asset Management Company (PFAMC) at a press briefing Tuesday held at a city hotel.
Prime Finance Asset Management Company arranged the press briefing on the public subscription of 'Rupali Life Insurance First Mutual Fund' (RLIFMF), an open-end mutual fund.
Prime Finance Asset Management Company is acting as issue manager of the fund, sponsored by Rupali Life Insurance Company. Bangladesh General Insurance Company (BGIC) and BRAC Bank are acting as trustee and custodian of the fund respectively.
Md Hasan Imam, Head of Finance & HRM, Syed Adnan Huda, Fund Manager and Mir Ariful Islam, Head of Research, were present among others at the press briefing.
The public subscription of the 'Rupali Life Insurance First Mutual Fund' began on February 1 which will continue till March 18, 2015.
Initial size of the fund is Tk 500 million (Taka 50 crore) divided into 50 million units (5 crore) with a face value of each unit is Tk 10.
Subscription of the fund, 'Rupali Life Insurance First Mutual Fund', is witnessing a good response among the investors, he said.
"We have already subscribed Tk 200 million from sponsors' side and we can now run the fund. But we want full subscription from small investors as closing date of the subscription of the fund ends March 18, 2015" said Mr Kashem.
He informed that Prime Finance Asset Management Company is also managing 'Prime Financial First Unit Fund', the country's first open-end mutual fund in private sector.
Despite the continuous volatility of the market through 2011 to 2014 following market debacle, the company disbursed 14 per cent dividend of 'Prime Financial First Unit Fund' for the year ended on December 31, 2014.
Mr Kashem said the company would work with dedication and integrity to give a satisfactory return to the investors for their investments in 'Rupali Life Insurance First Mutual Fund'.
In a query, he said that the Bangladesh's mutual fund sector could not play due role like other countries as the fund size is low, but he remains optimistic about the growth of the sector.
"Mutual Funds help small investors reduce their investment risks through diversification," said Mr Kashem adding "Through the pooling of assets, Mutual Funds offer you access to professional management at a minimal cost".
Due to strict regulatory oversight and separation of the investment, custodial and oversight functions, Mutual Funds offer one of the most transparent and safe investment vehicles, he added.
An open-ended mutual fund unit is a professionally managed and collective investment scheme that has unlimited lifetime and size.
The fund managers pools money from investors through its sales and agents and invest in stocks, bonds and short-term money market instruments and pays out dividends to unit holders annually.
The objective of the Fund is to provide attractive risk adjusted return to the unit holders by investing the proceeds in the capital market and money market.
Individuals - both resident and non-resident, institutions - both local and foreign, mutual funds and collective investment schemes are eligible to subscribe the units of the Fund.
Minimum 70 per cent of realized income of the Fund will be distributed as dividend in Bangladeshi Taka only at the end of each accounting year. The Fund shall create a dividend equalization reserve to ensure consistency in dividend, according to its prospectus.
The dividend will be distributed within 45 (forty five) days from the date of declaration. The units of the Fund are transferable by way of inheritance/gift and/or by specific operation of the law.
The unit holders can surrender their units through the Asset Manager and the authorized selling agents. So investment in this Fund will be easily en-cashable.
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