Open Ended Mutual Fund : A Beginner’s Guide for Investors

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An Open Ended Mutual fund allows investors to pool their money together for investment. This money is used to buy stocks, bonds, or other investment assets. 

Open-ended Mutual funds allow investors to enter or exit the fund at their convenience. 

 When investing in an open-ended mutual fund, you get units of the fund. The price of these units is determined by the fund’s net asset value (NAV). We calculate the NAV by dividing the total value of all investments within the fund by the number of units.

 Investors can return to the fund at the prevailing NAV if they want to sell their units. The fund may levy fees upon the sale of units.

 It is important to note that these units (of funds) cannot be bought or sold on stock exchanges. The number of units within the fund can change as investors purchase or sell them. The fund can issue new units when additional investments are made and repurchase units when sold.

List of Open Ended Mutual Fund in Nepal
Name Symbol Fund Size
NIBL Sahabhagita Fund NIBLSF 586,790,630
Siddhartha Systematic Investment Scheme SSIS 496,006,030
NIC Asia Dynamic Debt Fund NADDF 219,819,323
NMB Saral Bachat Fund – E NMBSBF 561,645,303
Shubha Laxmi Kosh SLK 281,459,607
Nabil Flexi Cap Fund NFCF 470,721,360
Kumari Sunaulo Lagani Yojana KSLY 366,809,100
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Benefits of Investing In Open Ended Mutual Funds

  • Investors can purchase or sell units anytime on any business day. It allows you to access your money anytime.
  • Professional managers handle these funds. Their experience in choosing investments can increase returns and manage risks.
  • Mutual funds provide diversification implies that your money is distributed over multiple investments, minimizing the impact of any single investment on the whole portfolio.
  • Many people can invest in open-ended mutual funds, including those with limited financial resources.
  • When we compare these funds to other investment options, their fees are typically lower, indicating that more money is allocated to investments than fees.
  • You may keep up with your investment by regularly checking the performance and holdings information mutual funds provide.
  • Some mutual funds reinvest dividends and profits automatically, expanding your investment.

Risk Factors In Open Ended Mutual Fund

 

open ended mutual fund

 

Open-ended mutual funds have certain risks to be aware of

  • The value of the fund’s investments can fluctuate due to changes in the financial markets, which can result in losses.
  • Borrowers may need help to return the money borrowed by the fund, resulting in significant losses.
  • Fluctuations in interest rates can affect the value of the fund’s bonds, potentially resulting in losses if rates increase.
  • The fund may need help selling investments quickly or at a profit, making it difficult to return your money when needed.
  • The fund manager’s actions determine the fund’s success, and incorrect decisions may influence returns.
  • If the fund invests heavily in one sector or industry, problems in that sector or business could greatly impact the fund.
  • Changes in laws and rules can impact the fund’s operations and costs, generating uncertainty and lowering returns.
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How To Buy Open-Ended Mutual Fund In Nepal?

You can purchase shares of an open-ended mutual fund after the initial allotment by visiting the fund manager’s offices. You can sell these shares at the same places. The net asset value (NAV) computed at the day’s conclusion determines the share price means that the shares’ value is established based on the investments made by the fund and the number of outstanding shares at the end of each day.

Are Mutual funds for everyone?

Open-ended mutual funds are the best investment choice for investors with specific liquidity requirements. They are willing to assume some cash flow and market risk in exchange for potential returns greater than their current portfolio. Investors should invest in mutual funds based on their investment objectives.

About SIP

The Systematic Investment Plan (SIP) is an investment option provided by Mutual Funds that enables investors to invest a specified amount in a Mutual Fund scheme regularly, such as once per month, once a quarter, or annually as opposed to doing so all at once. 

The instalment payment is similar to a regular deposit and could be as small as NPR 1000 per month. At present, four capitals in Nepal provide SIP facilities. They are NIBL Sahabhagita Fund, Siddhartha Systematic Investment Scheme, NIC Asia Dynamic Debt Fund and NMB Saral Bachat Fund – E.

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SIP has grown popular among Nepali investors because it encourages disciplined investing without concern for market fluctuations or timing. The ideal method to enter the world of investing for the long term is definitely through one of the systematic investment plans provided by mutual funds.

Conclusion

As the open-ended mutual fund industry continues to grow and evolve in Nepal, it allows individuals to participate in the country’s economic development while securing their financial future. Whether you are a novice investor or experienced, exploring the options available in the open-ended mutual fund market can help you diversify your portfolio, mitigate risks, and achieve your long-term financial objectives. Before making investment decisions, it is crucial to conduct thorough research and understand the fund’s investment objectives, risk factors, and past performance. For more info, please keep visiting our website Investornepal.com.


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