Mutual Funds in Nepal

MUTUAL FUNDS

REPORT ON PROSPECTS OF MUTUAL FUND

The report has expressly tried to explain the pros and cons of development development of mutual fund and how it can be a maor brea!throu"h in the utili#atio utili#ation n of free#e free#e of the $nancial $nancial resources resources of Nepal% &repared by' Diwas A"asti

Exam Roll No.: 390846 Campus Roll No.: 08!"068 Su#$%&': F()a)&(al *)s'('u'(o)s + Ma,-%'s ,oup: F()a)&% Su#m(''%/ 'o: T,(#u1a) U)(1%,s('2 Al(a'%/ Sa)-%,D%1 Sa)-%,D%1 Campus *) pa,'(al ul5lm%)' o '% ,%u(,%m%)' ,%u(,%m%)' o '% /%7,%% o a&%lo, o us()%ss S'u/(%s S

0

Faculty of Mana"ement Tribhuvan University

 

()*+MM)NDAT,+N

 T(s (s 'o &%,'(2 'a' 'a' 5%l/;o,- ass(7)m%)' ass(7)m%)' ,%po,'

Su#m(''%/ #2: Diwas A"asti

,oup: F()a)&% Su#$%&': F()a)&(al *)s'('u'(o) + Ma,-%'s Exam Roll No. : 390846 Campus Roll No.: 08!"068

 

E)'('l%/: MUTUAL FUNDS


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>>>>>>>>>>>>>   <%a/ o D%pa,'m%)' Sa)-%,D%1 Campus

Ac!nowled"ment

* am 1%,2 'a)-ul 'o 'os% p%opl% ;o a1% a&-)o;l%/7%/ m2 ,%po,' a)/ ass(s'%/ m% () '% p,%pa,a'(o) o (' ',ou7 '%(, a&'(1% pa,'(&(pa'(o). T% ,%po,' &o)'a()s /a'a ;(& * &oll%&'%/ ',ou7 a u%s'(o))a(,% su,1%2 ,om /(?%,%)' #a)-s a)/ 5)a)&(al ()s'('u'(o)s@ s'u/%)'s a)/ a&ul'2 m%m#%,s o /(?%,%)' %/u&a'(o)al ()s'('u'(o)s.  T%,%o,% * ;oul/ l(-% 'o 'a)- %1%,2 s()7l% p%,so) ;o a1% mo'(1a'%/ m% () p,%pa,()7 '(s ,%po,' a)/ %lp%/ m% a)al2% m2 5)/()7s. M2 /%%p%s' ,%7a,/s 'o T,(#u1a) U)(1%,s('2 o, p,o1(/()7 m% ;(' a) oppo,'u)('2 'o u'(l(% m2 '%o,%'(&al -)o;l%/7% () a p,a&'(&al a)al2s(s 'as-. * am also () /%#' o Sa)-%,D%1 Campus o, p,o1(/()7 us %1%,2 so,' o %lp )%&%ssa,2 'o &ompl%'% '(s ,%po,'. Also m2 ,(%)/s a)/ a&ul'(%s a1% a 1%,2 (mpo,'a)' ,ol% () '% &ompl%'(o) o '% ,%po,' ;('ou' ;(& * &oul/)B' poss(#l2 a1% &ompl%'%/ m2 ,%po,' () '% ;a2 * /(/ (' )o;.

 Ta)- 2ou.

*ontents 

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    

&a"e

U)/%,s'a)/()7 mu'ual u)/============.   a' (s mu'ual u)/ ........................................................  O,(7() o mu'ual u)/============..  
 8

Understandin" mutual fund -hat is a mutual fund.

Mu'ual u)/@ %'2molo7(&all2@ m%a)s a &oll%&'(1% u)/ o '% s'a-%ol/%,s ;o sa,% a mu'ual o#$%&'(1%. T% &oll%&'(1% u)/ ,%u(,%s a u)/ ma)a7%,. A u)/ ma)a7%, (s a &o,po,a'(o) s%' up 'o u'(l(% '% u)/ &oll%&'%/ ,om '% s'a-%ol/%,s a)/ ()1%s' (' () /(?%,%)' 5)a)&(al ()s',um%)'s () '% ma,-%'s. T%s% ()s',um%)'s ma2 #% %u('2@ #o)/s@ mo)%2 ma,-%' ()s',um%)'s. +ri"in of mutual fund ,n the be"innin"

<(s'o,(a)s a,% u)&%,'a() o '% o,(7()s o ()1%s'm%)' u)/sG som% &('% '% &los%/H%)/ ()1%s'm%)' &ompa)(%s lau)&%/ () '% N%'%,la)/s () 8 #2 I()7 (ll(am * as '% 5,s' mu'ual u)/s@ ;(l% o'%,s po()' 'o a Du'& m%,&a)' )am%/ A/,(aa) 1a) I%';(& ;os% ()1%s'm%)' ',us' &,%a'%/ () JJ4 ma2 a1% 7(1%) '% -()7 '% (/%a. I%';(& p,o#a#l2 '%o,(%/ 'a' /(1%,s(5&a'(o) ;oul/ ()&,%as% '% app%al o ()1%s'm%)'s 'o small%,

()1%s'o,s ;(' m()(mal &ap('al. T% )am% o I%';(&Ks u)/@ E%)/,a7'Maa-'Ma7'@ ',a)sla'%s 'o u)('2 &,%a'%s s',%)7'. T% )%x' ;a1% o )%a,Hmu'ual u)/s ()&lu/%/ a) ()1%s'm%)' ',us' lau)&%/ () S;('%,la)/ () 849@ ollo;%/ #2 s(m(la, 1%(&l% &,%a'%/ () S&o'la)/ () '% 880s.

 T% (/%a o pool()7 ,%sou,&%s a)/ sp,%a/()7 ,(s- us()7 &los%/H%)/ ()1%s'm%)'s soo) 'oo- ,oo' () ,%a' ,('a() a)/ F,a)&%@ ma-()7 ('s ;a2 'o '% U)('%/ S'a'%s () '% 890s.  T% os'o) P%,so)al P,op%,'2 T,us'@ o,m%/ () 893@ ;as '% 5,s' &los%/H%)/ u)/ () '% U.S.T% &,%a'(o) o '% Al%xa)/%, Fu)/ () P(la/%lp(a () 90J ;as a) (mpo,'a)' s'%p () '% %1olu'(o) 'o;a,/ ;a' ;% -)o; as '% mo/%,) mu'ual u)/. T% Al%xa)/%, Fu)/ %a'u,%/ s%m(Ha))ual (ssu%s a)/ allo;%/ ()1%s'o,s 'o ma-% ;('/,a;als o) /%ma)/.

The Arrival of the Modern Fund

 T% &,%a'(o) o '% Massa&us%''s *)1%s'o,sK T,us' () os'o)@ Massa&us%''s@ %,al/%/ '% a,,(1al o '% mo/%,) mu'ual u)/ () 94. T% u)/ ;%)' pu#l(& () 98@ %1%)'uall2 spa;)()7 '% mu'ual u)/ 5,m -)o;) 'o/a2 as MFS *)1%s'm%)' Ma)a7%m%)'. S'a'% S',%%' *)1%s'o,sK T,us' ;as '% &us'o/(a) o '% Massa&us%''s *)1%s'o,sK T,us'. La'%,@ S'a'% S',%%' *)1%s'o,s s'a,'%/ ('s o;) u)/ () 94 ;(' R(&a,/ Pa()%@ R(&a,/ Sal'o)s'all a)/ Paul Ca#o' a' '% %lm. Sal'o)s'all ;as also al(a'%/ ;(' S&u//%,@ S'%1%)s a)/ Cla,-@ a) ou'5' 'a' ;oul/ lau)& '% 5,s' )oHloa/ u)/ () 98. A mom%)'ous 2%a, () '% (s'o,2 o  '% mu'ual u)/@ 98 also sa; '% lau)& o '% %ll()7'o) Fu)/@ ;(& ;as '% 5,s' mu'ual u)/ 'o ()&lu/% s'o&-s a)/ #o)/s@ as oppos%/ 'o /(,%&' m%,&a)' #a)- s'2l% o  ()1%s'm%)' () /(?%,%)' '2p%s o #us()%ss%s a)/ ',a/%s.

(e"ulation and )xpansion

2 99@ '%,% ;%,% 9 op%)H%)/%/ mu'ual u)/s &omp%'()7 ;(' )%a,l2 J00 &los%/H%)/ u)/s. (' '% s'o&- ma,-%' &,as o 99@ '% /2)am(& #%7a) 'o &a)7% as (7l2Hl%1%,a7%/ &los%/H%)/ u)/s ;%,% ;(p%/ ou' a)/ small op%)H%)/ u)/s ma)a7%/ 'o su,1(1%. o1%,)m%)' ,%7ula'o,s also #%7a) 'o 'a-% )o'(&% o '% %/7l()7 mu'ual u)/ ()/us',2. T% &,%a'(o) o '% S%&u,('(%s a)/ Ex&a)7% Comm(ss(o) SEC@ '% passa7% o  '% S%&u,('(%s A&' o 933 a)/ '% %)a&'m%)' o '% S%&u,('(%s Ex&a)7% A&' o 934 pu' () pla&% sa%7ua,/s 'o p,o'%&' ()1%s'o,s: mu'ual u)/s ;%,% ,%u(,%/ 'o ,%7(s'%, ;(' '% SEC a)/ 'o p,o1(/% /(s&losu,% () '% o,m o a p,osp%&'us. T% *)1%s'm%)' Compa)2 A&' o  940  pu' () pla&% a//('(o)al ,%7ula'(o)s 'a' ,%u(,%/ mo,% /(s&losu,%s a)/ sou7' 'o m()(m(%&o)(&'s o ()'%,%s' #%';%%) /(?%,%)' ,%la'%/ pa,'(%s.

3

 T% mu'ual u)/ ()/us',2 &o)'()u%/ 'o %xpa)/. A' '% #%7())()7 o '% 9!0s@ '% )um#%, o op%)H%)/ u)/s 'opp%/ 00. *) 9!4@ '% 5)a)&(al ma,-%'s o1%,&am% '%(, 99 p%a-@ a)/ '% mu'ual u)/ ()/us',2 #%7a) 'o 7,o; () %a,)%s'@ a//()7 som% !0 )%; u)/s o1%, '% &ou,s% o '% /%&a/%. T% 960s sa; '% ,(s% o a77,%ss(1% 7,o;' u)/s@ ;(' mo,% 'a) 00 )%; u)/s %s'a#l(s%/ a)/ #(ll(o)s o /olla,s () )%; ass%' ()o;s.
(ecent Developments

*) 9J@ (ll(am Fous% a)/ o) M&uo;) o %lls Fa,7o a)- %s'a#l(s%/ '% 5,s' ()/%x u)/@ a &o)&%p' 'a' o) o7l% ;oul/ us% as a ou)/a'(o) o) ;(& 'o #u(l/ T% a)7ua,/ ,oup@ a mu'ual u)/ po;%,ous% ,%)o;)%/ o, lo;H&os' ()/%x u)/s. T% 9J0s also sa; '% ,(s% o '% )oHloa/ u)/. T(s )%; ;a2 o /o()7 #us()%ss a/ a) %)o,mous (mpa&' o) '% ;a2 mu'ual u)/s ;%,% sol/ a)/ ;oul/ ma-% a ma$o, &o)',(#u'(o) 'o '% ()/us',2Ks su&&%ss. (' '% 980s a)/ K90s &am% #ull ma,-%' ma)(a a)/ p,%1(ousl2 o#s&u,% u)/ ma)a7%,s #%&am% sup%,s'a,sG Max <%()%@ M(&a%l P,(&% a)/ P%'%, L2)&@ '% mu'ual u)/ ()/us',2Ks 'op 7u)sl()7%,s@ #%&am% ous%ol/ )am%s a)/ mo)%2 pou,%/ ()'o '% ,%'a(l ()1%s'm%)' ()/us',2 a' a s'u))()7 pa&%. Mo,% ,%&%)'l2@ '% #u,s' o '% '%& #u##l% a)/ a spa'% o s&a)/als ()1ol1()7 #(7 )am%s () '% ()/us',2 'oo- mu& o '% s()% o? o '% ()/us',2Ks ,%pu'a'(o). Sa/2 /%al()7s a' ma$o, u)/ &ompa)(%s /%mo)s',a'%/ 'a' mu'ual u)/s a,%)K' al;a2s #%)(7) ()1%s'm%)'s ma)a7%/ #2 ol-s ;o a1% '%(, sa,%ol/%,sK app,op,(a'% a)/ s%l%&'(1% ()'%,%s's () '%(, m()/.

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Types of mutual fund /% Types of schemes 0funds1 based on maturity'

Mu'ual u)/ s&%m%s &a) #% &lass(5%/ ()'o op%)H%)/%/ s&%m% o, &los%H%)/%/ s&%m% #as%/ o) '% ma'u,('2 p%,(o/.

a% +pen2ended Fund3 Scheme

A) op%)H%)/%/ u)/ o, s&%m% (s o)% 'a' (s a1a(la#l% o, su#s&,(p'(o) a)/ ,%pu,&as% o) a &o)'()uous #as(s. T%s% s&%m%s /o )o' a1% a 5x%/ ma'u,('2 p%,(o/. *)1%s'o,s &a) &o)1%)(%)'l2 #u2 a)/ s%ll u)('s a' N%' Ass%' alu% NA ,%la'%/ p,(&%s ;(& a,% /%&la,%/ o) a /a(l2 #as(s o, ;%%-l2 #as(s. *) 7%)%,al@ %)',2 o %x(' loa/ (s &a,7%/ o) NA 'o s%ll a)/ ,%pu,&as% '% u)('s. T% -%2 %a'u,% o op%)H%)/ s&%m%s (s l(u(/('2.

b% *lose2ended Fund3 Scheme

A &los%H%)/%/ u)/ o, s&%m% as a s'(pula'%/ ma'u,('2 p%,(o/ %.7. 6 mo)'s@ o)% 2%a,@ 3 2%a,s@ ! 2%a,s@ J 2%a,s@ 0 2%a,s %'&. T% u)('s o '% u)/ &a) #% ,%/%%m%/ o)l2 a'%, '% ma'u,('2 p%,(o/ (s o1%,.
4% Types of schemes 0funds1 based on ,nvestment +bective'

Mu'ual u)/ s&%m%s &a) also #% &lass(5%/ as 7,o;' s&%m%@ ()&om% s&%m%@ o, #ala)&%/ s&%m% %'&@ &o)s(/%,()7 '%(, ()1%s'm%)' o#$%&'(1% a)/ ()/%x u)/@ ,%al %s'a'% u)/@ (),as',u&'u,% u)/ %'&@ #as%/ o) '% a,%a o ()1%s'm%)'. Su& s&%m%s ma2 #% op%)H%)/%/ o, &los%H%)/%/ s&%m%s as /%s&,(#%/ %a,l(%,. Som% o '% s&%m%s a,% %xpla()%/ #%lo;.

a% 5rowth3)6uity +riented Scheme 05rowth fund1

 T% a(m o 7,o;' u)/s (s 'o p,o1(/% &ap('al app,%&(a'(o) o1%, '% m%/(um 'o lo)7H '%,m. Su& s&%m%s )o,mall2 ()1%s' a ma$o, pa,' o '%(, &o,pus () %u('(%s. Su& u)/s a1% &ompa,a'(1%l2 (7 ,(s-s. T%s% s&%m%s p,o1(/% /(?%,%)' op'(o)s 'o '% ()1%s'o,s l(-% /(1(/%)/ op'(o)@ &ap('al app,%&(a'(o)@ %'&. a)/ '% ()1%s'o,s ma2 &oos% a) op'(o) /%p%)/()7 o) '%(, p,%%,%)&%s. T% mu'ual u)/s also allo; '% ()1%s'o,s 'o &a)7% '% op'(o)s a' a la'%, /a'%. ,o;' s&%m%s a,% 7oo/ o, ()1%s'o,s a1()7 a lo)7H'%,m ou'loos%%-()7 app,%&(a'(o) o1%, a p%,(o/ o '(m%.

!

b% ,ncome3Debt +riented Scheme

 T% a(m o ()&om% u)/s (s 'o p,o1(/% ,%7ula, a)/ s'%a/2 ()&om% 'o ()1%s'o,s. Su& s&%m%s 7%)%,all2 ()1%s' () 5x%/ ()&om% s%&u,('(%s su& as #o)/s@ &o,po,a'% /%#%)'u,%s@ 7o1%,)m%)' s%&u,('(%s a)/ mo)%2 ma,-%' ()s',um%)'s. Su& u)/s a,% l%ss ,(s-2 as &ompa,%/ 'o %u('2 s&%m%s. T%s% u)/s a,% )o' a?%&'%/ #%&aus% o u&'ua'(o)s () %u('2 ma,-%'s.
c% 7alanced Fund

 T% a(m o #ala)&%/ u)/s (s 'o p,o1(/% #o' 7,o;' a)/ ,%7ula, ()&om%. T%s% s&%m%s ()1%s' () #o' %u('(%s a)/ 5x%/ ()&om% s%&u,('(%s () '% p,opo,'(o) ()/(&a'%/ () '%(, o?%, /o&um%)'s. T%s% a,% app,op,(a'% o, ()1%s'o,s loo-()7 o, mo/%,a'% 7,o;'.  T%2 7%)%,all2 ()1%s' 40H60 () %u('2 a)/ ,%s' () /%#' ()s',um%)'s. T%s% u)/s a,% also a?%&'%/ #%&aus% o u&'ua'(o)s () sa,% p,(&%s () '% s'o&- ma,-%'s a)/ ()'%,%s' ,a'%s.
/. Money Mar!et or Li6uid Fund

 T%s% u)/s a,% also ()&om% u)/s a)/ '%(, a(m (s 'o p,o1(/% %as2 l(u(/('2@ p,%s%,1a'(o) o &ap('al a)/ mo/%,a'% ()&om%. T%s% s&%m%s ()1%s' %x&lus(1%l2 () sa%, so,'H'%,m ()s',um%)'s su& as ',%asu,2 #(lls@ &%,'(5&a'%s o /%pos('@ &omm%,&(al pap%, a)/ ()'%,H#a)- &all mo)%2@ 7o1%,)m%)' s%&u,('(%s@ %'&. R%'u,)s o) '%s% s&%m%s u&'ua'% mu& l%ss &ompa,%/ 'o o'%, u)/s. T%s% u)/s a,% app,op,(a'% o, &o,po,a'% a)/ ()/(1(/ual ()1%s'o,s as a m%a)s 'o pa,- '%(, su,plus u)/s o, so,' p%,(o/s.

e% ,ndex Funds

*)/%x Fu)/s ,%pl(&a'% '% po,'ol(o o a pa,'(&ula, ()/%x o '% s'o&-s l(s'%/ () a pa,'(&ula, s'o&- %x&a)7%. NABs o su& s&%m%s ;oul/ ,(s% o, all () a&&o,/a)&% ;(' '% ,(s% o, all () '% ()/%x@ 'ou7 )o' %xa&'l2 #2 '% sam% p%,&%)'a7% /u% 'o som% a&'o,s -)o;) as ',a&-()7 %,,o, () '%&)(&al '%,ms. N%&%ssa,2 /(s&losu,%s () '(s ,%7a,/ a,% ma/% () '% o?%, /o&um%)' o '% mu'ual u)/ s&%m%s.  T%s% '2p%s o u)/s a,% also lau)&%/ () *)/(a) S%&u,('(%s Ma,-%'s. Su& u)/s a,% #as%/ o) '% ()/%x o pa,'(&ula, s'o&- %x&a)7%s () *)/(a su& as SE S%)s('(1% ()/%x@ S+P NSE !0 ()/%x N('2@ %'&. T%s% s&%m%s ()1%s' () '% s%&u,('(%s () '% sam% ;%(7'a7% &omp,(s()7 o 'a' ()/%x.  T%,% a,% also %x&a)7% ',a/%/ ()/%x u)/s lau)&%/ #2 '% mu'ual u)/s () *)/(a@ ;(& a,% ',a/%/ o) '% s'o&- %x&a)7%s. 6

f% Sector speci$c funds3schemes

 T%s% a,% '% u)/sQs&%m%s ;(& ()1%s' () '% s%&u,('(%s o o)l2 'os% s%&'o,s o, ()/us',(%s as sp%&(5%/ () '% o?%, /o&um%)'s. %.7. Pa,ma&%u'(&als@ So';a,%@ Fas' Mo1()7 Co)sum%, oo/s FMC@ P%',ol%um s'o&-s@ R%al %s'a'%@ *),as',u&'u,% %'&. T% ,%'u,)s () '%s% u)/s a,% /%p%)/%)' o) '% p%,o,ma)&% o '% ,%sp%&'(1% s%&'o,sQ()/us',(%s. (l% '%s% u)/s ma2 7(1% (7%, ,%'u,)s@ '%2 a,% mo,% ,(s-2 &ompa,%/ 'o /(1%,s(5%/ u)/s. *)1%s'o,s )%%/ 'o -%%p a ;a'& o) '% p%,o,ma)&% o 'os% s%&'o,sQ()/us',(%s ;(l% ma-()7 ()1%s'm%)' /%&(s(o)s. T%2 ma2 also ,%u(,% s%%-()7 a/1(&% o a) %xp%,' o, 7%''()7 p,op%, &ou)s%l()7Q()o,ma'(o) ,om a u)/ ma)a7%,. Mu'ual u)/ &a) #% s%7,%7a'%/ as ollo;()7:

J

*) '%,ms o u)&'(o)al('2 o '% s&%m%@ mu'ual u)/ &a) #% o ';o '2p%s. T%2 a,%: 7ases M%a)()7

+pen ended Mu'ual u)/ ;(' )o

*losed ended Mu'ual u)/ ;(' a sp%&(5%/ 8

sp%&(5%/ ma'u,('2 p%,(o/ (s a op%) %)/%/ mu'ual u)/. E)',2 a)/ %x(' () '% s&%m% (s poss(#l% a' a)2 '(m%.

L(u(/('2

S&%m%

*)1%s'm%)'

T%s% u)/s ()&lu/% ()&om% u)/s#o)/ a)/ also ()1%s' () #ala)&%/ u)/. *' as u)l(m('%/ ()1%s'm%)'.

l(% spa) 'o op%,a'% (s a &los%/ %)/ mu'ual u)/. *)1%s'o,s &a) #u2 s'o&-s () *)('(al Pu#l(& O?%,()7*PO o, ,om s'o&- %x&a)7%.  T%s% u)/s ()&lu/% 7,o;' u)/s%u('2 as '%2 o&us o) &ap('al app,%&(a'(o). *' as l(m('%/ ()1%s'm%)'.

8ow does it operate.

Mu'ual u)/ (s m%,%l2a s&%m%. T%,%o,% (' )%%/s a) op%,a'o,. A #o/2 &o,po,a'% 'a' op%,a'%s '% s&%m% o mu'ual u)/ (s &all%/ a u)/ ma)a7%,. Mu'ual u)/ a&'(1%l2@ ',ou7 ('s u)/ ma)a7%,@ pools mo)%2 ,om '% ()1%s'o,s a)/ ()1%s's (' () s%&u,('(%s. T% ,%'u,) o#'a()%/ ,om '% ()1%s'm%)' (s '%) ',a)s%,,%/ 'o '% ()1%s'o,s () p,opo,'(o)a'% #as(s o sa,% ol/()7s. *'s op%,a'()7 &2&l% &a) #% (llus',a'%/ as: R%'u ) ,s

*)1% s'o s , u F/ ) Ma) a7% , S%& u,('(% s

Pass%s

Pool '%(,

*)1%s' '%

9

9ey players in the "ame

*) o,/%, 'o &ompl%'% '(s &2&l% a)/ p,o1(/% sa,%ol/%,s ;(' '% ,%'u,) '%2 a,% suppos%/ 'o ,%&%(1%@ som% pla2%,s %)'%, ()'o '(s 7am% o ()1%s'm%)'. T%s% pla2%,s a,% l(s'%/ #%lo; ;(' '%(, ,ol%s: Sponsor

A &ompa)2 ,%7(s'%,%/ u)/%, &ompa)(%sB a&' 'a' %s'a#l(s%s mu'ual u)/.

Asset mana"ement company A &ompa)2 ,%7(s'%,%/ u)/%, &ompa)(%sB a&' 'a' ma)a7%s '% ()1%s'm%)' () mu'ual u)/.

Fund supervisor

Unit holder Depository

A u)/ A p%,so) sup%,1(so, ;o ol/s (s a '% s'o&- o 7ua,/(a) mu'ual u)/ 'a' ol/s a)/ (s '% 1(a#l% o p,op%,'(%s a)2 ,%'u,) o '% /(s',(#u'%/ mu'ual #2 '% u)/. u)/ o, '%  T%2 a,% #%)%5' o '% '% u)(' sa,%ol/%, ol/%,s. s o '% u)/.

*' (s ,%spo)s(#l% o, ,%&o,/ -%%p()7@ /(1(/%)/ /(s',(#u'(o) %'&.

&ros and *ons of mutual fund

 T%,% a,% ma)2 a/1a)'a7%s a)/ /(sa/1a)'a7%s o a mu'ual u)/. *' (s /(?%,%)' ()1%s'm%)' 'a) ()1%s'm%)' () a )o,mal sa,% ma,-%'. Som% o ('s a/1a)'a7%s a,%: /% &rofessional mana"ement'  T% u)/s a,% ma)a7%/ #2 s-(ll%/ a)/ p,o%ss(o)all2 %xp%,(%)&%/ p%,so))%l ;(' a #a&-up #2 ,%s%a,& '%am. T%,%o,% ()1%s'o,s &a) #% s%&u,%/ a7a()s' '% ,(so /%aul'. 4% Diversi$cation' *)1%s'm%)' () s%&u,('(%s ()1ol1%s /(?%,%)' '2p%s o ,(s- )am%l2 s2s'%ma'(& ,(sa)/ u)s2s'%ma'(& ,(s-. S2s'%ma'(& ,(s- (s )o) /(1%,s(5a#l% ,(s- #u' u)s2s'%ma'(& ,(s&a) #% /(1%,s(5%/ () su& a ;a2 'a' (' ;(ll 7(1% a (7%, ,%'u,). T%,%o,% s%&u,('(%s a,% /(1%,s(5%/ () mu'ual u)/. :% *onvenient administration'  T%,% (s )o a)2 '(m% &o)sum()7 a/m()(s',a'(1% ;o,- as )o sa,% ',a)s%, (s ,%u(,%/ a)/ ma)2 mu'ual u)/ %1%) p,o1(/% /(,%&' o,m 5ll()7 'o #u2 ('s u)('s. ;% 8i"her returns' %)%,all2 mu'ual u)/s p,o1(/% (7%, ,%'u,)s &ompa,%/ 'o ()1%s'm%)' () a)2 o'%, sa,%s as '% p,o%ss(o)al p%,so))%l /(1%,s(2 '% ()1%s'm%)' ()'o(7 %a,)()7 po,'ol(o. <% Low cost of mana"ement 0

 T% &os' o ma)a7%m%)' o '% u)/ (s 1%,2 lo; 'a) '% oa'()7 &os's ()1ol1%/ () ',a/()7 o o'%, s%&u,('(%s. =% Li6uidity' *) all op%) %)/%/ u)/s '% mu'ual u)/ /(,%&'l2 s%lls a)/ ,%pu,&as%s '% u)('s a)/ o, &los%/ %)/ u)/ u)('s a,% l(s'%/ () s'o&- ma,-%' 'o p,o1(/% l(u(/('2. F%; o'%, a/1a)'a7%s o (' ()&lu/% ',a)spa,%)&2@ (7l2 ,%7ula'%/@ %x(#(l('2@ %'&= Drawbac!s of mutual fund /% No "uarantee of return A mu'ual u)/ m(7' /o #%''%, 'a) '% s'o&- ma,-%' #u' '(s /o%s)B' l%a/ 'o '% ()&,%as% () ()1%s'o,sB ;%al'. Mu'ual u)/ ()1%s'm%)' ma2 %,o/% () 1alu%. 4% Diversi$cation  Tou7 /(1%,s(5&a'(o) m()(m(%s ,(s-@ (' /o%s)B' %)su,% a (7 ,%'u,) 'a) a) ()1%s'o, &a) a&(%1%.Fo, %xampl% ( a #o)/ /ou#l%s () 1alu%@ '% mu'ual u)/ ('s%l  ;o)' /ou#l% () 1alu% as '% #o)/ (s o)l2 a pa,' o a mu'ual u)/. :% Selection of proper fund A) ()1%s'o, &a) s%l%&' a sa,% #%''%, 'a) s'o&- as '%,% a,% ma)2 a&'o,s 'o #% &ompa,%/ ;(' ;(l% s%l%&'()7 (' #u' o, s%l%&'()7 a u)/@ ;% o)l2 a1% a pas' ',%)/ a)al2s(s. ;% *ost factor Mu'ual u)/s &a,,2 a p,(&% 'a7. Fu)/ ma)a7%,s a,% '% (7%s' pa(/ %x%&u'(1%s. (l% ()1%s'()7 a) %)',2 loa/ (s 'o #% pa(/ a)/ ;(l% %x('()7@ a) %x(' loa/ (s 'o #% pa(/. <% Unethical practices Mu'ual u)/s ma2 )o' pla2 a(, 7am%. Ea& s&%m%s ma2 s%ll som% o '% ol/()7s 'o ('s s(s'%, &o)&%,)s o, su#s'a)'(1% )o'(o)al 7a()s a)/ pos'()7 NAs () a o,mal(%/ ma))%,. Accountin" and *alculation

A u)/ o a mu'ual u)/ (s -)o;) as a u)('. T% u)/ ma)a7%, &al&ula'%s '% N%' Ass%'s alu% NA o '% u)(' () /a(l2@ ;%%-l2 o, mo)'l2 #as(s. N%' Ass%'s ,%%,s 'o '% ass%'s 'a' ,%ma() a'%, /%/u&'()7 a)2 allo;a#l% /%/u&'(o)s l(-% %xp%)s%s a)/ l(a#(l('(%s. %) '% N%' Ass%' (s /(1(/%/ #2 '% ou's'a)/()7 )um#%, o u)(' s'a)/()7 o) '% /a'%@ ;% 7%' '% NA o a u)('. T% u)(' o '% u)/ a,% #ou7' a)/ sol/ o) '% #as(s o '(s NA.  

NA>?

 Net Assets of the scheme  Number of units outstanding

-here@

 Net Assets = MV of investment + Receivables + Accrued Income + Other Assets − Accrued Expenses − Payables −Other

)xamples' /% 7alance sheet of (oc!ford ,ncorporation represents the followin" data 

Assets ' :@@@@ Liabilities ' 4<@@@ +utstandin" shares '<@@@ *alculate NA>% Solu'(o):  <%,%@ 7(1%) Ass%'s MA : 3@00@00@00@000 L(a#(l('(%s ML : !@00@00@000 Ou's'a)/()7 sa,%s S : !0@00@00@000  % a1%@ NA  MA  ML Q S  3000000000 H !0000000 Q!00000000  !.!  T%,%o,%@ N%' Ass%' alu% NA  Rs. !.!.

4% ,f the oBer price of an open2end fund is (s% /4%: per share and the fund is sold with a front2end load of
Survey Methodolo"y'

*) o,/%, 'o &ompl%'% m2 ,%s%a,& o) '% pu#l(& o N%pal ,%7a,/()7 '%(, -)o;l%/7% a#ou' mu'ual u)/@ ('s op%,a'(o)@ s',%)7's a)/ ;%a-)%ss%s@ * us%/ u%s'(o))a(,% m%'o/ as ;%ll as /(,%&' p%,so)al ()'%,1(%; ;(' /(?%,%)' s'u/%)'s a)/ a&ul'(%s o &oll%7%s. * ()u(,%/ ;(' '% s%)(o, o&(als o a)-s a)/ F()a)&(al *)s'('u'(o)s () Ia'ma)/u all%2 l(-% S(//a,'a L(m('%/ ;(& (s a u)/ ma)a7%, o '% mu'ual u)/ 7,o;' s&%m% o  S(//a,'a a)- L'/.

Findin"s'

*) m2 su,1%2 * a1% /(s&o1%,%/ ollo;()7 po()'s 'a' * ;oul/ l(-% 'o sa,%: (. ((. (((.

Pu#l(& p,%%,s 'o oa,/ '%(, ()&om% ,a'%, 'a) ()1%s' (' () mu'ual u)/. Pu#l(& (s u)a;a,% o '% %s'a#l(sm%)' o mu'ual u)/ Ma)2 ()'%,%s'%/ &o,po,a'(o)s a,% '%,% ;o ;a)' 'o %s'a#l(s a mu'ual u)/ #u' a,% a, a;a2 ,om ('s ()('(a'(1%s.



(1. 1. 1(. 1((.

P%opl% /o )o' %%l s%&u,%/ 'o l%' som%#o/2 %ls% /%&(/% o; 'o u'(l(% '%(, mo)%2 'ou7 '%2 m(7' #% %xp%,(%)&%/ p%,so))%l. P%opl% /o )o' 5)/ '% s&%m%s o '% mu'ual u)/ op%,a'()7 )o;@ a'',a&'(1% %)ou7 'o ma-% ()1%s'm%)'. T% *)la)/ R%1%)u% D%pa,'m%)' (s s(l%)' ( mu'ual u)/ (s a Tax Ex%mp' E)'('2 o, )o'. Som% p%opl% a,% ()'%,%s'%/ () ()1%s'()7 #u' '%2 a,% )o' su,% ;%,% a)/ o; '%2 &a) ()1%s'.

Data "athered and their presentation

(' m2 -%%) ()'%,%s' o) -)o;()7 a#ou' '% s('ua'(o) o mu'ual u)/s () N%pal@ * &o)/u&'%/ a su,1%2 a#ou' o; a mu'ual u)/ (mpa&'s o) p%opl%Bs p%,&%p'(o) () '%  s' p,o)u)&(a'(o) o '% ;o,/. A &op2 o '% u%s'(o))a(,% (s a''a&%/ ;(' '(s ,%po,'. All '% /a'a &oll%&'%/ ',ou7 p,(ma,2 a)/ s%&o)/a,2 sou,&%s a1% #%%) p,%s%)'%/ () 7,ap a)/ a)al2%/ ',ou7 1(sual(a'(o) o 'os% ,%p,%s%)'a'(o). *) o,/%, 'o a)al2% '% p%,o,ma)&% o a mu'ual u)/@ * a1% &o)s(/%,%/ a /a'a /o;)loa/%/ ,om '% s('% o S(//a,'a L(m('%/ ;(& as pu' o,' '% &los%/ %)/ s&%m%@ o, '% mo)' o Pous@ 069 'o %s'a@ 0J.  T% /a'a o mo)'l2 NA ,%po,'%/ #2 S(//a,'a L(m('%/ ,om '% mo)' o Pous@ 069 'o %s'a@ 0J as #%%) ,%p,%s%)'%/ () a 'a#l% a)/ plo''%/ () '% l()% 7,ap #%lo;:  Date  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of  End of

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Sou,&%:;;;.s(//a,'a&ap('al.&om

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Da'% 9HulH3 6HulH3 HAu7H3 9HAu7H3 6HAu7H3

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Da'% JHF%#H4 4HF%#H4 HF%#H4 8HF%#H4

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4.J9

4HulH4

3HAu7H3 30HAu7H3 6HS%pH3 3HS%pH3 0HS%pH3 JHS%pH3 4HO&'H3 HO&'H3 8HO&'H3 !HO&'H3 HNo1H3 8HNo1H3 !HNo1H3 HNo1H3

0HD%&H3 JHD%&H3 3Ha)H4 0Ha)H4 JHa)H4 4Ha)H4

.J9

JHMa,H4

.9!8

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.843

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.3!J

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Na#(l S(//a,'a 4.4 4 6.J 4.6 3 6.68 4.9 !.0 3 4.J 4 4.4 4. 3 4.4 4.J J 4.9 ! !.0  !.0 ! !.0 J !.4 !.3  !.! ! !.9  6 6.J 4 J.  J. ! J.9 4

6.6!J 6.J!3 6.303 !.J93 !.!9J !.J48 6.06 6.98 6.43 6.34! 6.633 J.46 J. J.64 J.43 J.!6J 8.!0 9.8J 9.!6 9.866 6.38 6.48 6.0J8 !.804

!

6.!03 6 38

 T% /a'a 7(1%) #%lo; (s '% ;%%-l2 NA o Na#(l mu'ual u)/ a)/ S(//a,'a Cap('al. T%2 a1% #%%) 7,ap(&all2 ,%p,%s%)'%/ () a s&a''%,%/ 7,ap.

Sou,&%: ;;;.s(//a,'a&ap('al.&om ;;;.)a#(l()1%s'.&om.)p

*omparision of NA>s

9.6 9.9 8.! J.!J J.4 J.! J. J.6 6.J! 6.66 6.63 6.! 6.38 6.3! 6.3 6.J 6.3 6.06 6.4 6. 6.J 6.! 6.3 6.08 J.! !.8 !.J9 J. !.J! !.6 6.J4 4.86 4.J 6 !.9 !.!! !.4 !.3 !.0J !.0! !.03 !.0 4.9! 3.!8 4.9 3.43 4.JJ 4.J4 Na#(l mu'ual u)/ S(//a,'a Cap('al 4.68 4.63 4.48 4.4! 4.44 4.4 4.4 .88 4.3 4. 4.0J 3.98 3.9 .!3 .! .! .4! .36 .03 .96 .96 .9! .88 .84 3. .J9 3. .J4 .6J .6 .49 .39 . .04 .6! .44 .3! .33 .J .6 0.940.69 0.9 0.84 0.J8 0.J4 0.J 0.J 0.!! 0.!3 0.4 0.3J

O1%, '% 2%a,s@ ;% &a) s%% ',ou7 '% s&a''%, 7,ap 'a' S(//a,'a Cap('al as mo,% NA as &ompa,%/ 'o Na#(l Mu'ual Fu)/.

6

&rospects of mutual funds in Nepal +peration'

 T% p,o1(s(o)s o, %s'a#l(s()7 a mu'ual u)/ (s %x',a&'%/ #%lo; ,om '% mu'ual u)/ ,ul%s@ 06J. A)2 o)% o, mo,% 'a) o)% #o/2 &o,po,a'% ma2 %s'a#l(s Mu'ual Fu)/.T% ual(5&a'(o) o #o/2 &o,po,a'% ;(ll()7 'o %s'a#l(s a Mu'ualFu)/ sall #% as ollo;s:H a A #o/2 &o,po,a'% %s'a#l(s%/ o, p%,o,m()7 5)a)&(al #us()%ss pu,sua)' 'o p,%1al%)' la;s@ #
 T2p%

Na"ari! )!an!i  oana@4<4 Op%) %)/%/

Fu)/ ma)a7%,

C('(%) *)1%s'm%)' T,us'

O;) ()1%s'm%)' *)1%s'm%)' s%&'o,s

!0 la-s 2 C*T  

Siddhartha investment "rowth scheme2/ Clos%/ %)/%/

S(//a,'a Cap('al L(m('%/

! ol/()7 #2 S(//a,'a a)- L'/  9! () s'o&-s l(s'%/ () S%&u,('(%s(ssu%/ #2 o1%,)m%)' o N%pal. s'o&- %x&a)7%.  ! /%pos(' () F*. Sa,%s@ /%#%)'u,%s@ #o)/s J

R(sL(u(/('2

Ma)a7%m%)' %%

*)1%s'm%)'  T%,m

o #o/2 &o,po,a'%.   TH#(lls o ON@ o)/s o  NR@ %'&.  S%&u,('(%s 7ua,a)'%%@ s%%/ 5)a)&()7.   T%,m loa)s M()(mum ,(s- /u% 'o po,'ol(o s&%m%. U)('s &a) #% sol/ 'o '% u)/ a)/ pu,&as%/ as '% 1alu% p,%s&,(#%/ #2 '% mu'ual u)/. .! o N%' Ass%'



O'%, au'o,(%/ a,%a.

M()(mum ,(s- /u% 'o po,'ol(o s&%m%. U)('s &a) #% sol/ a)/ #ou7' ,om s'o&- %x&a)7%.

.J! o N%' Ass%'@0.! o   N%' Ass%' o, /%pos('o,2 %% a)/ 0. o, sup%,1(so,2 &os'. S%%/ 5)a)&()7 #2 C*T Rs !0 Rs 40 &,o,% la- *)5)('% ! 2%a,s

*onclusion'

* ;oul/ l(-% 'o &o)&lu/% m2 ,%po,' ;(' a po()' 'a' mu'ual u)/s %lp /(?%,%)' s%&'o,s o '% ma,-%'s a)/ also 'o '% 7o1%,)m%)'. F%; o 'os% &o)',(#u'(o)s a,%: a. *' %lps () u'(l(()7 '% mo)%2 o pu#l(& 'a' as #%%) oa,/%/. #. *' /(,%&'l2 ()&,%as%s '% ()/%x o '% s'o&- ma,-%'. &. *' &,%a'%s %mplo2m%)' oppo,'u)('(%s. /. *' ma-%s '% ()1%s'm%)' o '% p%opl%@ s%&u,%.  T%,%o,% ;(' ou, o;) /(s&,%'(o)@ ;% &a) &oos% 'o ()1%s' () mu'ual u)/ a)/ #%&om% a pa,' o '% ma,-%'.

8

9

7iblio"raphy 7oo!s'

F()a)&(al *)s'('u'(o) a)/ Ma,-%'s. 2 I(,a) Tapa@ a,a' Pa,a$ul( ,nternet'

;;;.s(//a,'a&ap('al.&om ;;;.)a#(l()1%s'.&om.)p

0

Euestionnaire Survey for understandin" about a mutual fund The participants of this survey are !indly informed that the survey will be made a part of my report on mutual fund and the 6uestions below is to be answered solely in your own discretion% &articipants can tic! only one answer that is more suitable in his3her thin!in"%

 a' (s a mu'ual u)/ ( A) ()1%s'm%)' s&%m% (( Pu#l(&Bs mo)%2 mul'(pl(%, ((( Us%, o u)u'(l(%/ ;%al' o pu#l(&  2 ()1%s' () mu'ual u)/ ( A #%''%, ,%'u,) 'o ou, ()1%s'm%)' (( A s%&u,% ,%'u,) 'o ou, ()1%s'm%)' ((( %''%, u'(l(a'(o) o ou, u)/ 3 *s mu'ual u)/ a &%ap%, op'(o) o, ()1%s'm%)' ( %s (( No 4 %,% 'o mu'ual u)/ ()1%s' ou, ()1%s'm%)' ( S'o&-s a)/ #o)/s (( R%al %s'a'% ((( *),as',u&'u,%s ! Do 2ou -)o; ;2 a mu'ual u)/ (s )o' 'ax%/ *s (' #%&aus%= ( *' (s a Tax Ex%mp' E)'('2 (( *' as )o Taxa#l% *)&om% 6 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>   >>>>  8 a' (s a &los%/ %)/ u)/ () o)% l()%  >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>   >>>>  9 a' (s '% o,mula o, &al&ula'(o) o N%' Ass%'s alu% NA  >>>>>>>>>>>>>>>>

H

>>>>>>>>>>>>>>>>> Q >>>>>>>>>>>>>> 

0 Do 2ou '()- mo,% mu'ual u)/s soul/ #% %s'a#l(s%/ () N%pal * 2%s@ 7(1% ';o ,%aso)s. ( >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>  (( >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>   a' (s '% m()(mum &ap('al ,%u(,%m%)' 'o op%,a'% a mu'ual u)/ ( >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 



 *s (' )%&%ssa,2 'a' '% mu'ual u)/ ma)a7%, as 'o #% a &o,po,a'(o) o, a &ompa)2 ( %s (( No

