The recent Supreme Court's (SC) order on liquidation of closed-end Mutual Funds has played a key role in creating interest among the investors for the MFs.
As a result, market insiders said MFs listed on the bourses have started to be vibrant.
The sector of listed MFs witnessed improvement in most of the trading days in June last on the Dhaka Stock Exchange (DSE).
Some of the MFs were also in the list of most traded securities in many trading days.
Meanwhile, the institutional investments in listed MFs have also increased significantly.
According to DSE information on the sectoral performance of listed securities, the listed MFs rose 0.31 per cent on June 9, 0.6 per cent on June 14, 0.12 per cent on June 15, 0.02 per cent on June 16, 0.81 per cent on June 21, 0.33 per cent on June 22, 1.55 per cent on June 23 and 2.9 per cent on June 30.
"It's the normal practice that unit holders will get back their returns as net asset value (NAV) after the liquidation. The SC has paved the way of liquidation on completion of tenure and subsequently the investors' interest to MFs has started to be increased," said Shahidul Islam, managing director of the VIPB Asset Management Company.
Asked about the increased institutional investment in MFs, Shahidul said institutional investors are comparatively more prudent than individuals.
"After the liquidation of two closed-end MFs it is proved that investors can get back returns as per NAV. That's why institutional investors took positions in the MFs timely," Shahidul said.
Echoing Shahidul, the managing director of the IDLC Investments Md. Moniruzzaman said institutional investors are smarter than the individuals.
"That's why many institutional investors have ensured their long term investments in the MFs," Moniruzzaman said.
After a long legal battle, the SC delivered its final verdict on May 31, 2016 allowing the liquidation or conversion of closed-end MFs on completion of tenure as per the unit holders' decision.
The liquidation job of AIMS First Guaranteed Mutual Fund and Grameen One: First Scheme of the Grameen Mutual Fund has already been completed following the regulatory directive.
According to DSE information, out of 36 listed MFs, 26 went green on June 30. On the day, the market price of the units of the closed-end MFs rose ranging 2.0 per cent to 9.92 per cent.
Among the MFs, the market price of the units of First Bangladesh Fixed Income Fund rose 9.23 per cent, Asian Tiger Sandhani Life Growth Fund 4.40 per cent, SEML Lecture Equity Management Fund 9.92 per cent, Vanguard AML BD Finance MF One 5.32 per cent on June 30.
As of June 30, 2015 institutional investment in EBL First MF was 0.01 per cent, which rose to 25.52 per cent as of February 29, 2016.
As of June 30, 2016 institutional investment in EXIM Bank First MF was 71.67 per cent and the amount rose to 77.42 per cent as February 29, 2016.
As of June 30, 2015, institutional investment in EBL NRB MF was 44.31 per cent, which rose to 73.36 as of February 29, 2016.
In the units of DBH First MF, institutional investment was 28.92 per cent as June 30, 2015. In this MF, the institutional investment rose to 40.01 per cent as of February 29, 2016 and 42.20 per cent as of May 31, 2016.
Institutional investment in Phoenix Finance 1st MF was 16.67 per cent as of June 30, 2016 and the amount rose to 26.88 per cent as of May 31, 2016.
Institutional investment was almost zero in ICB First NRB MF, ICB AMCL 1st MF and EBL First MF as of June 30, 2015. Institutional investment in these MFs rose between the range of 22 per cent to 25 per cent.
Institutional investors are presently holding more than 50 per cent units of some MFs such as Mercantile Bank First MF, AB Bank First MF, Green Delta MF and Southeast Bank First MF.
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