Siddhartha to launch growth scheme Mutual Fund soon

Siddhartha Mutual Fund will be launching Siddhartha Growth Scheme I before the Dashain vacations, provided the regulator approves its prospectus soon enough.

Siddhartha Capital along with Growmore Merchant Banker will be managing the issue of the mutual fund scheme that will launch mutual fund units worth Rs 400 million with a five-year tenure.

“We submitted the prospectus for the scheme to Securities Board of Nepal (Sebon) today, and hopefully, we will be granted approval soon,” said chief executive of Siddhartha Capital Dhurba Timilsina.

Siddhartha Capital –– a merchant banking subsidiary of Siddhartha Bank –– has been awarded a licence to work as the fund manager and depository for Siddhartha Mutual Fund by Sebon. Siddhartha Bank will work as the sponsor of the first mutual fund to operate after the Mutual Fund Regulation 2067 came into existence.

The scheme will be primarily priced at Rs 10 per unit and, according to the Mutual Fund Guidelines 2069, a single investor has to buy a minimum of 100 units. The units will later be listed at the stock exchange for secondary trading.

“This close-ended scheme will contain equities in its portfolio, but later we are planning to introduce other schemes that will contain other instruments such as bonds and debentures, but it will depend on the reception of this one,” added Timilsina.

Mutual funds are considered the best tool for investors who have minimum knowledge about shares or have a low-risk appetite. Mutual funds pool money from investors and invest in diversified scrips providing cost-effective, yet, diversified portfolio to investors at a minimum price. Since experts manage the fund's investment, even a layperson who knows nothing about finance can earn substantial returns.

Sebon has already approved Nabil Mutual Fund and NMB Mutual Fund promoted by Nabil Investment Banking and NMB Capital, respectively. But they are yet to receive the licence for fund manager and depository.

Likewise, the tenure of the existing NIDC Capital Markets’ mutual fund will be up by mid-October.