NIMB Ace Capital Limited is poised to transform investment possibilities through the introduction of its latest mutual fund, the NIBL Stable Fund. The fund, which will be available for subscription from Magh 2, to Magh 5, is designed as a closed-end mutual fund with the objective of generating consistent and moderate returns through strategic investments in various financial instruments, in accordance with existing rules and regulations.
Among the total of 10 crore unit shares, 1% equivalent to 10 lakh units with a value of Rs. 1 crore has been designated for the scheme manager, NIMB Ace Capital Limited. Additionally, 14%, which is 1.4 crore units amounting to Rs. 14 crore, has been assigned to the fund sponsor, Nepal Investment Mega Bank Limited. The remaining 8.5 crore units, valued at Rs. 85 crore, will be made available for subscription to the general public starting Magh 2.
With an initial public offering (IPO) size of NPR 1 Billion, expandable to NPR 1.25 Billion in case of oversubscription, the NIBL Stable Fund offers a distinctive investment opportunity. Notably, it features a 12-year maturity period, setting a record as the lengthiest among Nepal's present array of closed-end mutual funds. The fund's diversified asset allocation approach encompasses equity, fixed deposits, fixed-income instruments, alternative investments, and cash equivalents, establishing it as a versatile and well-balanced investment option suitable for both experienced and novice investors.
Related: What Is SIP (Systematic Investment Plan) And How Does It Works? - SIP Simplified
This marks the 7th mutual fund scheme managed by NIMB Ace Capital Mutual Fund. The "NIBL Stable Fund" is classified as a Closed-End Mutual Fund Scheme, boasting a corpus size of NPR 1 Billion and a maturity period extending over 12 years. The primary aim of the scheme is to uphold the established trust and legacy of previous Mutual Fund schemes, providing consistent returns to unit-holders throughout the maturity period while mitigating market risks.
The projected effective annual returns stand at 16.18%. NIMB Ace Capital Limited serves as the Fund Manager and depository for the scheme, adhering to a disciplined and process-oriented investment approach to enhance value for its unitholders.
The mutual fund's asset allocation are as listed below;
- A minimum of 20% to a maximum of 40% in equity
- A minimum of 10% to a maximum of 15% in fixed deposits
- A minimum of 20% in fixed income instruments
- A maximum of 50% in fixed income instruments like bonds, debentures, TBs,
- Additionally, there will be a minimum of 5% and a maximum of 10% allocated to alternative investment instruments, while the portion for Cash and Cash Equivalents will be between 2% to 5%.
Presently, "NIBL Mutual Fund" oversees the operation of four Closed-End schemes, namely "NIBL Pragati Fund," "NIBL Samriddhi Fund-II," "NIBL Growth Fund," and "Mega Mutual Fund 1," along with one Open-Ended Mutual Fund Scheme, "NIBL Sahabhagita Fund."
The inaugural scheme of NIBL Mutual Fund, "NIBL Samriddhi Fund-I," has been successfully redeemed following seven years of prosperous operation. It has disbursed a total of 98.50% in cash dividends to its unit-holders, translating to an effective annual rate of approximately 18%.
In a pioneering move, NIBL Mutual Fund has introduced the "NIBL Sahabhagita Fund," marking the first open-ended mutual fund scheme in Nepal since the implementation of the Mutual Fund Regulation 2067.
What Are Mutual Funds?
Mutual funds are like investment pools where many people combine their money to create a diversified portfolio of stocks, bonds, or other assets. A professional manager handles the investments, and people buy shares in the fund to become part-owners. Mutual funds offer benefits such as spreading risk, having a pro manage the money, and being easy to buy or sell. They come in different types, like funds focused on stocks, bonds, or a mix of both, allowing investors to choose based on their preferences. It's important to consider personal goals, risk comfort, and fees before investing in mutual funds.
You can learn more abour Mutual Funds Here: What Are Mutual Funds? - Types And Benefits
