First mutual fund launched by Mega Capital today

From today, which is 4th Bhadra, the Mega Mutual Fund 1 public offering is underway. 10th Bhadra, 2078 is the closing date for this issue. The issue can be extended until Bhadra 18 if it is not fully subscribed by the early closing date.

The par value will be set at Rs. 10 per unit for 10 crore units. The fund’s promoter Mega Bank is in possession of 15% of the total unit allocation. As a closed-end fund, Mega Mutual Fund 1 can be traded in NEPSE. The fund has a 10-year maturity period. One crore units is the maximum number of units applicants can apply for.

Letter of Offer

Sharesansar interviewed Mega Capital’s CEO, Sabir Bade Shrestha, to learn more about the fund and the manager. An edited transcript has been provided.

Background First mutual fund launched by Mega Capital today

As of January 2016, Nepal had 24 closed-ended and 3 open-ended mutual funds. A mutual fund share is equal to Rs. 10 par value. Investing in securities involves pooling money collected from investors into a professionally managed pool. A security is an investment asset, such as a stock, bond, or money market instrument. Consequently, the fund mangers invest after collection of the funds in stocks, debentures, initial public offerings, and fixed deposits.

A fund’s NAV is determined based on the performance of its investment. 

Additionally, there is another way to measure a mutual fund’s performance: its long-term performance. Investing in funds is closely inspected by investors along with the profitability. Market forces of supply and demand are used to determine the fund’s market price.