Fund size of more than 50% listed mutual funds have increased by over 10% in 2013, despite sluggish market.
All the eight mutual funds managed by the Investment Corporation of Bangladesh (ICB) showed surprising return in 2013.
Among the listed 41 closed-end mutual funds, 4th ICB Mutual Fund outperformed all the funds climbing 53% in its unit prices from its opening net asset value (NAV) in 2013.
The value of each unit of a mutual fund is called NAV that is to be given back to the unit holders at redemption of the fund’s life. Redemption is the process of giving the unit holder the NAV per unit in cash with certain percentage deducted for the transaction cost in a predetermined year.
NAV of five funds have gone down below their opening NAV in the beginning of 2013. The worst performer among funds in 2013 was the EBL First Mutual Fund, managed by the Race Asset Management Company, with its NAV falling 8%.
Some of the ICB-managed funds showed remarkable returns, which is surprising.
However, most funds have performed well, said VIPB Asset Management Company Limited CEO Shahidul Islam told the Dhaka Tribune.
He said the most funds, including those that will be redeemed in 2014, are currently being traded at a discount value.
Either the investors don’t understand mutual funds or they don’t trust the fund managers, which resulted in poor performance of those funds, he said.
As of December 29, 2013, ratio of the closing unite prices of all the mutual funds to NAV rose slightly 0.76 times against 0.74 last week.
Based on the latest NAV, the market capitalisation of the 41 listed funds stood at Tk3,630 crore while assets under management of the sector stood at Tk4,690 crore.