Sandhani Asset Management Limited has launched the country's first-ever no-dividend mutual fund named "Sandhani AML SLIC Fixed Income Fund" in the open-end mutual fund industry.
The fund aims to achieve long-term capital appreciation and will not provide any dividends.
The unitholders can realise their returns through the redemption of the units during the business hour as specified by the asset management company.
Its other features will help investors reduce portfolio risk and at the same time avail of comparatively higher tax concessions.
On Sunday, the tax-efficient mutual fund was officially launched at the auditorium of the Capital Market Journalists' Forum (CMJF).
The Bangladesh Securities and Exchange Commission (BSEC) had earlier approved the draft prospectus of the fund.
The primary target size of the fund is Tk50 crore. The sponsor will provide Tk10 crore and the remaining Tk40 crore will be raised by selling mutual fund units to investors at a face value of Tk10 each.
BSEC Commissioner Mizanur Rahman joined the programme as the chief guest. Tarique Amin Bhuiyan, managing director of the Dhaka Stock Exchange, and Richard D` Rozario, president of DSE Brokers Association of Bangladesh were present as special guests.
Mizanur Rahman said the mutual fund industry plays a major role in the capital market. But it is still absent in the country.
In the last 10 years, mutual funds have failed to meet the expectations of investors, he added.
The commissioner said mutual funds underperform when the market is bearish and it cannot provide consistent returns to investors.
Investors can withdraw their investments at any time and have the opportunity to take capital gains if any, he further said.
Tarique Amin Bhuiyan said there is some embarrassment in the market due to the technological weakness of the Dhaka Stock Exchange.
"We expect the Alternative Trading Board (ATB) to be operational by September this year. Currently, there are 81 open-ended mutual funds. We will be able to bring these to the ATB by the end of September," he added.
Bangladesh General Insurance Company Ltd is the trustee, while Brac Bank Ltd is the custodian of the fund.
The fund's asset manager – Sandhani Asset Management Limited – will focus on mid-and large-cap stocks, while capital protection will get high priority.