MUTUAL FUNDS OF BANGLADESH: AN OVERVIEW

WHAT IS MUTUAL FUND?

A mutual fund is a company that pools money from many investors
and invests the money in securities such as stocks, bonds, and short-
term debt. The combined holdings of the mutual fund are known as its
portfolio. Investors buy shares in mutual funds.
3 TYPES OF MUTUAL FUNDS 

Closed-end Fund
Open-end Fund
Unit Trust
TYPES OF FUNDS BY INVESTMENT OBJECTIVE 
Stock Fund/Equity Fund
Bond Fund
Money Market Fund
Asset Allocation Fund
Exchange Traded Fund (ETF)
MUTUAL FUNDS IN BANGLADESH

The sector is still at a nascent stage as it is very small compared to

the capital market.
As of August, 2016, there are 35 closed-end MFs listed in the
country's stock market.
The asset management companies manage money less than 3% of
the total market capitalization.
Mutual fund sector ranks 12th based on total market capitalization.
(Source: DSE Sector-Based Performance, May 2016)
PUBLIC MUTUAL FUND

Owned & managed by Investment Corporation of Bangladesh (ICB) which is

government-owned investment bank.
The country’s first mutual fund, the First ICB Mutual Fund was launched on 25
April, 1980.
ICB is now managing twenty one funds: ten close-end Mutual Fund and eleven
open-end Mutual Fund known as Unit Fund.
Bangladesh Fund is the country’s largest open-end mutual fund.
PRIVATE MUTUAL FUND

Managed by private asset management companies.

Prime Financial First Unit Fund, launched in 2010 is the first-ever open-end
mutual fund in Bangladesh.
Currently, 25 private mutual funds are listed in the capital market.
ISLAMIC MUTUAL FUND

Three Islamic Mutual Fund:

ICB AMCL Islamic Unit Fund
IFIL Islamic Mutual Fund
AIBL 1st Islamic Mutual Fund
 EXCHANGE TRADED FUND (ETF)

On May, 2016 Bangladesh Securities and Exchange Commission (BSEC) has

approved the draft rules of ETF.
According to BSEC, ETF will be listed with the bourses under the Collective
Investment Scheme, despite the fund being formed as an open-ended one.
It will be formed through distribution of private placements to eligible investors.
The stockbrokers and dealers will play the role of market makers.
FORMATION OF MUTUAL FUND

A mutual fund is formed as a Trust under Trust Act, 1882

The Trust Deed is to be registered under Registration Act, 1908.
Before the registration, it has to be approved by the Securities and Exchange
Commission.
MFs must comply with Securities and Exchange Ordinance, 1969 and the
Securities and Exchange Commission (Mutual Fund) Laws, 2001.