Dhaka, Bangladesh (BBN) - The public subscription of an open-end fund- ‘Rupali Life Insurance First Mutual Fund’ began on February 1 which will continue till March 18, 2015.
Prime Finance Asset Management Company is managing the fund, sponsored by Rupali Life Insurance Company, reports BBN.
Bangladesh General Insurance Company (BGIC) and BRAC Bank are acting as trustee and custodian of the fund respectively.
The BDT 500 million is the initial size of the fund, and it will increase from time to time, said Moin Al Kashem, managing director of Prime Finance Asset Management Company, the manager of the fund at a press briefing on Tuesday.
An open-end fund is a professionally managed collective investment scheme that has unlimited lifetime and size.
The fund manager pools money from many investors through its selling agents and invests it in stocks, bonds and short-term money market instruments, and pays out dividend to the unit holders annually.
Rupali Life Insurance as the prime sponsor of the fund has subscribed units worth BDT 200 million, which has already been invested in different purposes.
The rest BDT 300 million will be raised from individual and institutional investors, said Mr Kashem.
Anyone can purchase the units from the designated selling agents, who will also issue certificates.
The unit holders can sell their units any time through the selling agents and the fund will buy back the units.
The minimum subscription amount for individual investors is Tk 5,000 or 500 units of Tk 10 each.
The fund, however, will not be listed or traded on the exchanges or secondary market.
“Open-end funds are the future of the country's mutual fund industry since these funds always have to offer sale and repurchase price based on the net asset value rather than the supply and demand-based pricing of close-end funds,” Kashem said. He said the fund was originally a closed-end type that was later converted into an open-end in nature.
Prime Finance Asset Management Company is the pioneer in introducing unit fund from the private sector.
Prime Financial First Unit Fund is the first private sector open-end fund introduced in 2010.
Currently, nine open-end funds are in the market.
BBN/SK/AD-18Feb15-1:00pm (BST)