Portfolio Report

Chapter 1 Introduction
Origin of the Report:

The preparation of this report is a requirement of the course on Security Analysis & Portfolio Management, F-505; Prof. Dr. M. Farid A med, Professor of Finance Department at Faculty of Business Studies, University of Dhaka, who is also the Honora le course teacher of Portfolio ! eory", has asked us to make a term paper re!ardin! to our course of the course" So we determined to make this term paper on a topic named #Investing in Financial Market as a Retail Investor through the Mutual Funds"" This is a !roup assi!nment rather than an individual task" The heart of this paper is why people invest in mutual fund and constructin! optimal portfolio y mutual funds traded in our stock market"
Objectives of the Report:

The primary o $ective of this study is the partial fulfillment of the course requirement" The main o $ectives of this report are as follows% To fulfill the partial requirement of the Security Analysis & Portfolio Management, F505" offered in &B' pro!ram" (t will help the !eneral investors who trade in our stock market y providin! the current information re!ardin! the mutual funds traded in our stock market as well as providin! information a out performance of mutual funds and portfolio risk return of the mutual funds" To make us update re!ardin! our stock market" (t will also ena le us to improve our skills on report writin!" 's corporate e)ecutive put !reat value on report writin! as an important element in mana!ement success, this part of the course will prepare us to face the future challen!es of corporate world" To meet the curiosity in this stated su $ect"
Investing in Financial Market as a Retail Investor through Mutual Funds
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Organization of the Report:

The report consists of five parts" The parts that are included in these reports are followin!% The capital market in Ban!ladesh" *hy retail investors will chose mutual fund" How retail investors will invest in the mutual fund" Performance of mutual funds in Ban!ladesh +onstruction of optimal portfolio y mutual funds"
Scope of the Report:

This report !ives a narrative as well as analytic overview of the &utual Funds and its operation in Ban!ladesh" The scope of the report is hu!e to the discussion of the different present and future analysis of mutual funds traded in our stock market"
+urrent return and risk of the mutual funds" The portfolio constructed y different mutual funds
Methodology & Sources of ata:

The information for the report was collected from secondary sources" Secondary sources# Secondary data have een collected from various sources as The traded monthly data has een collected from the DS," The annual report of different mutual funds" (nformation of our stock market from different $ournals, papers, and internet also"
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The data and information collected from secondary sources have een analy-ed" *e used &icrosoft ,)cel to analy-e data" *e take different theories from our te)t ook" Then we
!asic "actors to be used:

$eturns#
To compare the performance etween private and private sectors mutual funds, return is an important factor that must e used" Fundamentally, return on a portfolio or a fund is%
.
*here, is the return on portfolio" /'0 is /et 'sset 0alue at market price" 1t1 is the time period"
$is%#
&utual Funds diversify our portfolio y investin! in various securities 2 minimi-e the risk ecause &utual funds are not like volatile as other secondary market shares" 3isk of these mutual funds need to e used to do comparative analysis of two sector mutual funds" Total risk can e measured with the help of standard deviation of returns%
.
Page6 *here,
is the total risk of the portfolio"
is the avera!e e)cess return of the portfolio over risk free return" "
S ar&e's $e(ard to )aria*ility#

'dditional portfolio return over risk free return is related with the total risk of the portfolio" The ench mark is additional return of market over risk free return related with market portfolio4s total risk"
. *here,
is Sharpe1s 3eward to varia ility
#i$itations:
The ma$or limitations of this report are% +ac% of ,no(ledge and -.&erience# e
The main limitation of this term paper is that, we are in the learnin! phase, hence no professional e)perience" 'naly-in! the data with theoretical knowled!e only, may not the main limitation of this term paper" !ime constraint# Page6 sufficient" Here, we consider our lack of e)perience and knowled!e re!ardin! real world, is
(f time were more, we would !ive more time and this term paper would e more !ood and useful"
Chapter % "inancial Sector in !angladesh %&1 "inancial Syste$ in !angladesh:

The financial system of an economy provides the medium of e)chan!e, allocates resources, provides a return on and affects the level of savin!s" (t also pools, transforms and distri utes risks as an important locus of implementation of development policy of a country" 3eal economic !rowth !oes hand in hand with an increasin! amount and
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diversity of activity of financial institutions, market and instruments" The financial structure is composed of two sets of elements5 namely, financial instruments and financial institutions" (n the conte)t of Ban!ladesh, an efficient and developed financial system is essential for transferrin! capital from savers to investors and to channeli-e scarce resources to ma)imi-e production, #Financial &arket can e thou!ht of as the rain of the entire economic system, the central locus of decision makin!6" (n fact, the financial system1s contri ution to !rowth lies precisely in its a ility to increase efficiency in financial deepenin! throu!h via le and effective financial market and financial instruments and profita le interaction with the pro!ressive !lo ali-ation" The financial system of Ban!ladesh consists of Ban!ladesh Bank 7BB8 as the central ank, 9 State :wned +ommercial Banks 7S+B8, ; !overnment owned speciali-ed anks, <= private anks, > forei!n anks and ?> non@ ank financial institutions" The financial system also em races &icro credit or!ani-ation, insurance companies, stock e)chan!es and co@operative anks"
%&1a Characteristics of "inancial Sector in !angladesh:

Before li eration of Ban!ladesh, the ankin! and finance industries in erstwhile ,ast Pakistan was owned and controlled y erstwhile *est Pakistani owners" Ban!ladesh inherited a narrow and thin financial sector with si) commercial anks which were nationali-ed, a few forei!n anks and two Aovt" owned speciali-ed financial institutions" The ankin! system was operatin! until the end of B>;Cs with the directives of monetary authorities aimin! at achievin! o $ectives of supplyin! cheap money to the State :wned ,nterprises 7S:,s8 and priority sector like '!riculture, ,)port and Small and +otta!e (ndustries in the private sector" The two important instruments at the armory of monetary authority to e)ecute monetary policy were selective credit control measures and administered interest rate" :ne consequence of +entral Bank1s re!ulated deposit and lendin! rates at that time without consideration of market clearin! rate was that in real terms, interest rates appeared to e ne!ative in view of hi!h rates of inflation durin! the mid DCs and up to the end of B>;Cs" The policy of ar itrarily fi)ed low interest rate rou!ht a out undesira le consequences of distortion in allocation of resources etween different sectors" +onsequently, the financial interrelations ratio 7Aoldsmith, B>E>8 measured in terms of ratio of total financial assets to /ational *ealth remained a ysmally low in Ban!ladesh ran!in! etween BCF@?CF etween B>D<@B>;< compared to 9CF @ E=F in Pakistan, (ndia, Sri Ganka, Thailand, Philippines and &alaysia 7(&F Financial Statistics, B>;C @ B>;98"
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%&1b Recent develop$ents in the financial sector:

The stock market !rew y ;?F in ?CC> compared to the year ?CC;, representin! a total capitali-ation of H?D=m" (n order to encoura!e corporate houses with !ood fundamentals to come forward with new (nitial Pu lic :fferin!s 7(P:s8, the re!ulatory ody introduced the 4 ook uildin! mechanismI" (n the year ?CC>, the Securities and ,)chan!e +ommission also asked Dhaka Stock ,)chan!e to open :rder +onfirmation Transaction 7:+T8 market to facilitate tradin! of de@listed companies from the floor" &oreover, preparations are afoot to set up Ban!ladesh (nstitute of +apital &arket to work for its e)pansion" The scheduled anks in Ban!ladesh will e a le to !et credit reports of their clients online from the +redit (nformation Bureau from mid ?CBC" B3'+ ank plans to open e)chan!e houses in &alaysia, Sin!apore and (taly, in order to attract more remittances throu!h its own channel" The 'sian Development Bank 7'DB8 has si!ned deals with B? local private commercial anks for e)pansion of its trade finance facilitation pro!ram in Ban!ladesh" Under the a!reement, the anks will e a le to offer more trade financin! support to their clients particularly e)porters and importers throu!h international anks" The anks are Bank 'sia Gtd", B'S(+ Bank Gtd", Dhaka Bank Gtd", Dutch Ban!la Bank Gtd", ,astern Bank Gtd", and ,)port (mport Bank of Ban!ladesh Gtd", /ational Bank Gtd", Premier Bank Gtd", Prime Bank Gtd", Southeast Bank Gtd", Standard Bank Gtd", and United +ommercial Bank Gtd"
%&% 'he Macro "inancial (nviron$ent:

%&%a Macro)financial develop$ents:
:verall, ADP !rowth in FJ?CB?@B< is likely to e around E"C< percent and if no drastic shock affects the economy and usiness confidence and investment climate improve further, the economy could !row faster" The B?@month avera!e inflation rose to ;";C percent yearly" (f the current trends are maintained, it is likely that the avera!e inflation would fall to around D"; percent in FJB<@B9" Durin! the first half of FJB<, total revenue
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and total e)penditure as shares of ADP stood at E"?< percent and BB"=Dpercent respectively" :verall fiscal deficit as share of ADP reached 9"CC percent at the end of the first half of FJB< as a!ainst the yearly tar!et of 9"; percent" Pu lic sector credit !rew at >"E percent durin! HB FJB< while the !rowth rate of private sector credit was BC"; percent" Ban!ladesh1s financial sector has shown remarka le resilience to the upholdin! !lo al financial turmoil and slowin! !rowth in hi!h income countries, lar!ely due to the country1s insulation from international capital markets and the ne!li!i le role of forei!n portfolio investors" This resilience also derives partly from stren!thened policy frameworks and macroeconomic fundamentals"
%&* 'he !an+ing Sector:

The num er of anks in all now stands at =E in Ban!ladesh" :ut of the =E anks, four are /ationali-ed +ommercial Banks 7/+Bs8, <= private commercial anks, > forei!n anks and the rest five are Development Financial (nstitutions 7DF(s8" Sonali Bank is the lar!est amon! the /+Bs while Pu ali is leadin! in the private ones" 'mon! the > forei!n anks, Standard +hartered has ecome the lar!est in the country" Besides the scheduled anks, Sama ai 7+ooperative8 Bank, 'nsar@0DP Bank, Karmasansthan 7,mployment8 Bank and Arameen ank are functionin! in the financial sector" The num er of total ranches of all scheduled anks is E,C<; as of Lune ?CB?" :f the ranches, <>">= per cent 7?,9B?8 are located in the ur an areas and EC"C= per cent 7<,E?E8 in the rural areas" :f the ranches /+Bs hold <,EBE, private commercial anks B,?B9, forei!n anks <B and speciali-ed anks B,BDD" Ban!ladesh Bank 7BB8 re!ulates and supervises the activities of all anks" The BB is now carryin! out a reform pro!ram to ensure quality services y the anks"
2.3a Short history of banking:

The ankin! system at independence 7B>DB8 consisted of two ranch offices of the former State Bank of Pakistan and BD lar!e commercial anks, two of which were controlled y Ban!ladeshi interests and three y forei!ners other than west Pakistanis" There were B9 smaller commercial anks" 0irtually all ankin! services were concentrated in ur an areas" The newly independent !overnment immediately desi!nated the Dhaka ranch of the State Bank of Pakistan as the central ank and renamed it Ban!ladesh Bank" The ank was responsi le for re!ulatin! currency, controllin! credit and monetary policy, and administerin! e)chan!e control and the forei!n e)chan!e reserves" The Ban!ladesh !overnment initially nationali-ed the entire
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domestic ankin! system and proceeded to reor!ani-e and rename the various anks" Forei!n@owned anks were permitted to continue doin! usiness in Ban!ladesh" The insurance usiness was also nationali-ed and ecame a source of potential investment funds" +ooperative credit systems and postal savin!s offices handled service to small individual and rural accounts" The new ankin! system succeeded in esta lishin! reasona ly efficient procedures for mana!in! credit and forei!n e)chan!e" The primary function of the credit system throu!hout the B>DCs was to finance trade and the pu lic sector, which to!ether a sor ed D=F of total advances" The !overnmentIs encoura!ement durin! the late B>DCs and early B>;Cs of a!ricultural development and private industry rou!ht chan!es in lendin! strate!ies" &ana!ed y the Ban!ladesh Krishi Bank, a speciali-ed a!ricultural ankin! institution, lendin! to farmers and fishermen dramatically e)panded" The num er of rural ank ranches dou led etween B>DD and B>;=, to more than <,<<C" Denationali-ation and private industrial !rowth led the Ban!ladesh Bank and the *orld Bank to focus their lendin! on the emer!in! private manufacturin! sector"
%&*b Interest Rate Spread:

The interest rate spread 7(3S8 is widely used as a parameter of ank profita ility, intermediation cost, and the de!ree of efficiency of the ankin! sector" The (3S shows the additional cost of orrowin! that ank takes on to perform intermediation activities etween orrowers and fund lenders" The market structure plays an important role in determinin! (3S" From a ankIs perspective, (3S is a premium for the risk that the ank undertakes" Besides, it compensates for loan default, ut also for the risk related to cost of fundin!" Banks usually orrow short term funds from depositors and invest in lon! term loans" Therefore, (3S for anks covers oth spot and future cost of funds" (t may chan!e dependin! on prediction of future short term interest rate" The country1s ankin! structure is se!mented with S+Bs and P+Bs holdin! <<"B percent and =B"9 percent of total assets respectively" The financial system was also repressed in the B>DCs and early B>;Cs in the presence of interest rate and credit ceilin!s" 's part of economic reform pro!rams, credit and other restrictions were phased out from the late B>;Cs" *ithin the structure, hi!h (3S resulted from a num er of factors includin! state control of lendin!, a sence of risk mana!ement practices, accumulation of ad loans due to political interference on commercial lendin! decisions, and limited technical skills particularly in the arena of risk mana!ement"
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(t shows the wei!hted avera!e deposit 7*'D38 and lendin! 7*'G38 rates and the spread 7(3S8 of all anks from end Lune ?CCB to end Septem er ?CC;" The (3S as measured y the difference etween wei!hted avera!e lendin! and deposit rates of commercial anks, shows a !enerally declinin! trend since Lune ?CCB e)cept for few deviations" The spread etween lendin! and deposits rate declined y B"E percenta!e points while deposit rates increased y C"B percenta!e points and lendin! rates decreased y B"9 percenta!e points respectively etween Lune ?CCB to Septem er ?CC; resultin! from persistent efforts of BB to encoura!e the anks to reduce (3S to reasona le level to facilitate investment and !rowth" The IRS in the banking sector of major South Asian countries shows that Sri Lanka has the highest spread followed by Pakistan, angladesh, and India!
!a*le# +ending and De&osits $ates and /$S in Sout Asian 0ountries
Bangladesh India Pa#istan $ri Lan#a
Weighted average Lending rate .0019 12.00-12.50 1"."! 19."1
Deposit Rate 7.17 .00-9.00 5. 5 11.7!
Spread 5.17 !.00-".50 7.!9 7.57
%&, -!"I Industry in !angladesh:

Twenty@nine financial institutions are now operatin! in Ban!ladesh" :f these institutions, B7one8 is !ovt" owned, B= 7fifteen8 are local 7private8 and the other B<7thirteen8 are esta lished under $oint venture with forei!n participation" The total amount of loan 2 lease of these institutions is Tk">>,C>B";C million as on <B Decem er, ?CCD" Ban!ladesh Bank has introduced a policy for loan 2 lease classification and provisionin! for F(s from Decem er ?CCC on half@yearly asis" To ena le the financial institutions to mo ili-e medium and lon!@term resources, Aovernment of Ban!ladesh 7A:B8 si!ned a pro$ect loan with (D', and a pro$ect known as IFinancial (nstitutions Development Pro$ect 7F(DP8I has started its operation from Fe ruary ?CCC" Ban!ladesh Bank is administerin! the pro$ect" The pro$ect has esta lished I+redit, Brid!e and
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Stand y Facility 7+BSF8I to implement the financin! pro!ram with a cost of USH =D"CC million" The leasin! sector, a vital se!ment of financial sector has contri uted si!nificantly over the year, in spite of many constrains like tremendous competition with the ankin! sector of the country, challen!es and re!ulatory chan!es 7withdrawal of depreciation allowance8 which are affectin! adversely on the usiness" *ith the +hallen!es of time, the overall !rowth of the leasin! usiness, achieved throu!h diversification of products and services and a!!ressive marketin! is indicative of the industry1s contri ution to our national economy" The total investment y the financial institutions 7non@ ank8 up to Lune ?CC; was BDT >E"; illion which is E"9BF hi!her than that of previous year" They have e)ecuted leases and dis ursed loan a!!re!atin! Tk"<>"=> illion durin! ?CC; which is around<<F !rowth compared to its previous year" +apital market investment was a ove Tk"E illion" The financial institutions maintained recovery level of >=F which is of an international standard 'mon! ?> /BF(s, one is !overnment owned, B= are local 7private8 and the other B< are esta lished under $oint venture with forei!n participation" Ban!ladesh Bank has introduced a policy for loan and lease classification provisionin! for /BF(s from Decem er ?CCC on a half yearly Basis"
%&,a .erfor$ance of -!"Is:

/BF(s are increasin!ly comin! forward to provide credit facilities for meetin! the diversified demand for investment fund in the countryIs e)pandin! economy" 'ccordin! to the availa le data 7provisional8, private sector credit y /BF(s !rew at the rate of <;"D percent and stood at Tk"BC;"E illion at the end of Decem er ?CC; which was Tk"D;"< illion in Decem er ?CCD 7Fi!ure 9"9"?8" The outstandin! position of industrial lendin! y /BF(s also increased y BC"9 percent to Tk"EB"9 illion at the end of Decem er ?CC; compared with Tk"=="E illion in Decem er ?CCD" However, overdue as a share of outstandin! industrial loans increased to ;"C percent in Decem er ?CC; from E"; percent in Decem er ?CCD" This shows that the /BF(s need to streamline their loan
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dis ursement methods with focus on low risk industrial se!ments and instill monitorin! mechanisms in order to reduce risks associated with their assets"
etter
"e#ertheless, the contribution of " $Is to industrial financing still remains #ery small! %uring
Luly@Decem er ?CC;, the share of the /BF(s in total dis ursed industrial loans was only 9"? percent" &ore than ;C percent of the loans dis ursed y /BF(s were term lendin! as their capital structure provides etter support for term financin! rather than workin! capital financin!" Total classified loan of all /BF(s stood at Tk"D"B illion in Decem er ?CC; a!ainst their total outstandin! loan of Tk"BCE"B illion showin! a classified loan to total outstandin! ratio of E"D percent which was D"B percent at the end of Decem er ?CCD" The return on equity 73:,8, which shows the earnin! capacity of shareholder1s ook value investment, shows si!nificant variation across /BF(s" (n Lune ?CC;, the hi!hest 3:, is o served for (D+:G 7?9"B percent8 followed y Prime Finance 7??"> percent8 and DBH 7?C"> percent8" :n the other hand, 3:,s of several /BF(s were lower than the industry avera!e and the interest rate on deposits indicatin! requirements on the part of these /BF(s to access oth low cost fundin! and ensure etter portfolio mana!ement to improve performance"
%&,b ($ergence of -on)!an+ "inancial Institutions in !angladesh:

(nitially, /BF(s were incorporated in Ban!ladesh under the +ompanies 'ct, B>B< and were re!ulated y the provision relatin! to /on@Bankin! (nstitutions as contained in +hapter 0 of the Ban!ladesh Bank :rder, B>D?" But this re!ulatory framework was not adequate and /BF(s had the scope of carryin! out their usiness in the line of ankin!" Gater, Ban!ladesh Bank promul!ated an order titled 4/on Bankin! Financial (nstitutions :rder, B>;>1 to promote etter re!ulation and also to remove the am i!uity relatin! to the permissi le areas of operation of /BF(s" But the order did not cover the whole ran!e of /BF( activities" (t also did not mention anythin! a out the statutory liquidity requirement to e maintained with the central ank" To remove the re!ulatory deficiency and also to define a wide ran!e of activities to e covered y /BF(s, a new act titled 4Financial (nstitution 'ct, B>><1 was enacted in B>><" (ndustrial Promotion and Development +ompany 7(PD+8 was the first private sector /BF( in Ban!ladesh, which started its operation in B>;B" Since then the num er has een increasin! and in Decem er ?CCE it reached ?>"B" :f these, one is !overnment owned, B= are local 7private8 and the other B< are esta lished under $oint venture with forei!n participation"
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/on@Bank Financial (nstitutions are an important part of financial system in Ban!ladesh" /BF(s operations are re!ulated under the Financial (nstitutions 'ct, B>><" The /BF(s consist of investment, finance, leasin! companies etc" There were ?> financial institutions operatin! in Ban!ladesh as of <B Decem er ?CCE" :f these one is !overnment owned, B= are local 7private8 and the other B< are esta lished under $oint venture with forei!n participation" Ban!ladesh Bank has introduced a policy for loan and lease classification and provisionin! for /BF(s from Decem er ?CCC on a half@yearly asis" 'mon! the ?> financial institutions, B? have een listed in the stock e)chan!es up to <B Decem er ?CCE to stren!then financial capa ility and the rest are under process to e listed in due course"
%&,c Recent evelop$ent and /ctivities of -!"Is:

The ma$or usiness of most /BF(s in Ban!ladesh is leasin!, thou!h some are also diversifyin! into other lines of usiness like term lendin!, housin! finance, merchant ankin!, equity financin!, venture capital financin! etc" Gease financin!, term lendin! and housin! finance constituted >9 percent of the total financin! activities of all /BF(s up to Lune ?CCE" ' reak@up of their financin! activities reveals that the share of leasin! and housin! finance in the total investment portfolio of /BF(s has !radually decreased from => and B= percent, respectively, in ?CC? to 9E and B9 percent in Lune ?CCE" The share of term loans, on the other hand, has increased from ?C percent to <9 percent durin! the same period implyin! increased focus on the former" The evolvement of /BF( usiness activity is o served in Fi!ure B" (t can also e seen from the fi!ure that the portfolio mi) of /BF(s has ecome quite sta le from ?CC9"
%&0 Insurance Industry Overvie1:

'fter independence of Ban!ladesh, insurance industry was nationali-ed" Su sequently throu!h the enactment of (nsurance +orporation 'ct 0(, B>D<, two corporations namely Sadharan Bima +orporation 7SB+8 for !eneral insurance and, Li an Bima +orporation
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for life insurance were esta lished in Ban!ladesh" SB+ was actin! as the sole insurer of !eneral insurance till B>;9" Between B>;= to B>;; first !eneration of private !eneral insurance companies were emer!ed as Ban!ladesh Aovernment allowed the private sector to conduct usiness in all areas of insurance for the first time in B>;9" ' total of BE private !eneral insurance companies were re!istered in that phase" (n B>>E another ; private !eneral insurance companies were re!istered" The third !eneration of private !eneral insurance companies, which included B; companies, came into operation etween B>>> and ?CCB" The !eneral insurance market in Ban!ladesh now consists of 9< private sector insurance companies and B state owned insurance company" (nsurance +orporation 7amendment8 'ct B>>C provides that =CF of all insurance usiness relatin! to any pu lic property or to any risk or lia ility appertainin! to any pu lic property shall e placed with the SB+ and the remainin! =CF of such usiness may e placed with this corporation or with any other insurers in Ban!ladesh" But for practical reason and in a!reement with the (nsurance 'ssociation of Ban!ladesh SB+ underwrites all the pu lic sector usiness and =CF of that usiness is distri uted amon! the e)istin! 9< private !eneral insurance companies equally under /ational +o@ insurance Scheme" (nsurance is not a new idea or proposition to the people of Ban!ladesh" ' out half a century ack, durin! the British re!ime in the then (ndia, some insurance companies started insurance usiness, particularly life, in this part of the world" Thus, (nsurance industry in Ban!ladesh passed throu!h a century@lon! history of evolution, and is still stru!!lin! to achieve maturity" 'fter li eration, as part of the nationali-ation process, the industry was nationali-ed y a Presidential :rder" Su sequently, in the process of denationali-ation, private sector companies were allowed to operate in the industry side y side with two state@owned corporations" +onsequent to that, a !ood num er of insurance companies emer!ed in a small economy which resulted in tou!h and unhealthy competition"
%&2 'he Capital Mar+et:

+apital market is a mechanism to flow fund from the hands of small savers 7individuals and institutions8 at low costs to those entrepreneurs who do need fund to start usiness or to usiness" (n the other words, capital market mechanism !ives a part ownership of i! companiesMcorporations to small savers like you and me" (n simple term, it is a
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!lo ally accepted scheme to share ownership of economic development with !eneral pu lic" The +apital market, an important in!redient of the financial system, plays a si!nificant role in the economy of the country!
Regulatory bodies:
The Securities and ,)chan!e +ommission e)ercises powers under the Securities and ,)chan!e +ommission 'ct B>><" (t re!ulates institutions en!a!ed in capital market activities" Ban!ladesh Bank e)ercises powers under the Financial (nstitutions 'ct B>>< and re!ulates institutions en!a!ed in financin! activities includin! leasin! companies and venture capital companies"
.articipants in the capital $ar+et:

The S,+ has issued licences to ?D institutions to act in the capital market" :f these, B> institutions are &erchant Banker 2 Portfolio &ana!er while D are (ssue &ana!ers and B7one8 acts as (ssue &ana!er and Underwriter" i3 Stoc+ e4changes: There are two stock e)chan!es 7 the Dhaka Stock ,)chan!e 7DS,8 and the +hitta!on! Stock ,)chan!e 7+S,8 8 which deal in the secondary capital market" DS, was esta lished as a pu lic Gimited +ompany in 'pril B>=9 while +S, in 'pril B>>=" 's of <C Lune ?CCC the total num er of enlisted securities with DS, and +S, were ?<> and BE> respectively" :ut of ?<> listed securities with the DS,, ?B> were listed companies, BC mutual funds and BC de entures" ii3 Invest$ent Corporation of !angladesh 5IC!3: The (nvestment +orporation of Ban!ladesh was esta lished in B>DE with the o $ective of encoura!in! and roadenin! the ase of industrial investment" (+B underwrites issues of securities, provides su stantial rid!e financin! pro!rammes, and maintains investment accounts, floats and mana!es closed@end 2 open@end mutual funds 2 closed@end unit funds to ensure supply of securities as well as !enerate demand for securities" (+B also operates in the DS, and +S, as dealers" iii3 Specialized ban+s: Ban!ladesh Shilpa Bank 7BSB8, Ban!ladesh Shilpa 3in San!stha 7BS3S8, B'S(+ Bank Gtd", some Forei!n Banks and /+Bs are en!a!ed in lon! term industrial financin!" Total Number of Listed Securities !"
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Total Number of #ompanies Total Number of %utual &unds Total Number of 'ebentures Total Number of Treasury (onds Total Number of #orporate (onds
23$ 35 ! 2$2 3
The total num er of listed securities is 9;>" Product of capital market in Ban!ladesh consists of a8 Shares, 8 De entures, c8 &utual funds, d8 Bonds" %otal n&'(er o) $hares*+erti)i,ates%otal /&'(er o) $hares 1 2&t&al 3&nd +erti)i,ates o) 4ll Listed $e,&rities %otal /&'(er o) $hares o) 4ll Listed +o'panies %otal /&'(er o) +erti)i,ates o) 4ll Listed 2&t&al 3&nds %otal /&'(er o) 4ll Listed De(ent&res %otal /&'(er o) 4ll Listed 7ov. %-Bonds %otal /&'(er o) 4ll Listed +orporate Bonds ./o. in 'n0 1952!0 165!65 25762 ./o. in 6 0000 !09 55002 75069
(n our Ban!ladeshi +apital market the total num er of shares of all listed companies is BE,9E=mn" Derivatives, Future and options are not traded in our capital market" Total )ssued #apital of : *&igure Tk. in mn+ 7"./$37 4ll Listed $e,&rities 2.2/0"5 4ll +o'panies $hares 25/7$" 4ll 2&t&al 3&nds $ 0 4ll De(ent&res 50$/$$3 4ll Listed 7ovt. %-Bonds 7/0." 4ll Listed +orporate Bonds Ban!ladeshi +apital market consists of only D,CE>mn issued capital for listed corporate onds" So, Bond market in Ban!ladesh is not well esta lished" 'nd +apital &arket consists of only ?=,DB>mn issued capital for mutual funds" "7 ./! 2 2 35$ 3/57" *&igure ,S- in mn+ $0/!70.52
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%otal 2ar#et +apitali8ation o) .3ig&re %#. in 'n0
.3ig&re 9$: in 'n0 "55! 5
4ll Listed $e,&rities 4ll +o'panies $hares 4ll 2&t&al 3&nds 4ll De(ent&res
2559 5 2! 2 5067 2505555 " !79 "55060 576 65 !2 501511" 9 65!92
4ll Listed 7ovt. %-Bonds 4ll Listed +orporate Bonds
%&2a S( Sectoral .erfor$ance ) May %611:

3inan,ial $e,tor 2ar#et +apitalisation .in 'n0 2a< 4pril 57951"0.11 5 5721.11 2775726.07 26!5"1 .5" 1!55"19.72 1"!5 67.!6 "!5"27.11 "55060." 150"6550".0 150225967.! 0 7 ; o) total 2#t +ap 27.9! 12.5! 6.!0 1155!5.5" 1.66 25! ".0" ! .55 !05697.12 6!5201.2! !!.1" 552!!.1" 2.69 16502".! 1056!5.09 %&rnover %#. .in 'n0 ; o) total %&rnover 17." 11.5! 12.52
2a<
Ban#s 3inan,ial Instit&tions Ins&ran,e 2&t&al 3&nds %otal
4pril 195!97.5! 1 56 ".95 205775.6"
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9;"==F of total market capitali-ation is the financial sector in Ban!ladesh" 'mon! those, anks contri ute ?D">9F to the total capitali-ation" &utual funds contri ute only B"EEF to the total capitali-ation of our +apital &arket"
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99"B<F of total turnover is the financial sector in Ban!ladesh" 'mon! those, Banks contri ute hi!hest BD"<;F to the total turnover in our capital market" 'nd mutual funds contri ute only ?"E>F to the total turnover in our capital market amon! the financial sector in Ban!ladesh"
%&2b Sectoral .7( ) May %611:

$e,tor $e,toral Pri,e =arnings Ratio 2ar-11 De,-10 4pr-11 10.75 25.2! 10.27 2!.!7 !7.27 21.1! 10.91 17.5" 10."2 De,-09 16.!6 16."" "2.!5 25.26 29.06 20."7 20.29 6.1" 15.1" 7. De,-0 De,-07 25.99 De,-06 16.2!
Ban# 3inan,ial Instit&tions 2&t&al 3&nds
%&8 #easing Industry Overvie1:

The financial sector in Ban!ladesh comprises the money and capital markets, insurance and pensions, and microfinance" (n addition to the Ban!ladesh BankNthe central ank of Ban!ladeshNthere are 9 state@owned commercial anks 7S+Bs8, = state@owned speciali-ed anks, <C domestic private commercial anks 7P+Bs8, > forei!n commercial anks, and ?> non ank financial institutions 7/BF(s8 as of ?CC;"
There were ?> /BF(s operatin! in Ban!ladesh as of ?CC;" :f these institutions, B is !overnment owned, B= are local 7private8, and the other B< are esta lished under $oint@ venture arran!ements with forei!n institutions" The minimum capital requirement of /BF(s is Tk?=C million" The ma$or usiness of most /BF(s is leasin!, althou!h some are also en!a!ed in merchant ankin! and housin! finance" 's leasin! usiness is the ma$or usiness of /BF(s and most of the /BF(s are multi product financial intermediaries, our industry analysis focus on the performance of /BF(s of Ban!ladesh and throu!h /BF(s we hi!hli!hts leasin! usiness of Ban!ladesh" The operations of /BF(s in Ban!ladesh are re!ulated y the B'/AG'D,SH B'/K" /on ank financial institutions 7/BF(s8 are licensed and controlled y the Financial (nstitutions 'ct of B>><" These institutions
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Aive loans and advances for industry, commerce, a!riculture, or housin!5
+arry on the usiness of underwritin! or acquisition of, or the investment or reinvestment in, shares, stocks, onds, de entures, or securities issued y the !overnment or any local authority5 ,n!a!e in hire@purchase transactions, includin! leasin! of machinery or equipment5 Finance venture capital5 Provide loans for house uildin! and property purchases5 and Use their capital to invest in companies"
%&8a Invest$ent .ortfolio Mi4 of -!"Is 5%66%)%6623:

/n1estment Portfolio 2002 ,nd@ Dec B,E9E"; > =EB"DB 9B9"<< BDC"D BC;"9? and 3 2004 ,nd@ Dec ?,B?D"? 9 ;?C"<< =B<"D9 B;?";B C 3 2005 ,nd@ Dec ?,=<D"9 E B,DB<"= ? EEE";= ?9C"9? BEC"CE 3 2005 ,nd@ Dec <,BB="D < ?,<BC"C ? ;>9"B= BCE"9E <E?"= 3 2006 ,nd@ Lune <,<=E"= > ?,9=D"; C B,C?E"? < B?C"DE <=<"B? 3
+ease !erm +oans 7ousing +oans 8t er Assets /n1estment 9S ares -:uities;
=E" D B>" 9 B9" < ="> <"D
=;" 9 ??" = B9" B = C
9D" D <?" < B?" = 9"= <
9=" > <9 B<" ? B"E ="<
9=" > <<" E B9 B"D 9"; Page6
!otal 8utstanding
?,>C?"C =
BCC
<,E99"B ?
BCC
=,<B;"< B
BCC
E,D;;"; E
BCC
D,<B9"= C
BCC
(n a market with considera le competitive pressures from anks and other financial institutions, the leasin! industry has shown si!nificant resilience" (ts total assets !rew at an annual avera!e rate of <9F durin! ?CC?O?CCE" Gease financin! constitutes =9"=F of the total lon!@term assets in the country1s financial sector, with the rest consistin! mainly of term financin!" Geasin! companies offer their services to industries such as te)tiles, chemicals, services, pharmaceuticals, transport, food and evera!e, leather products, and construction and en!ineerin!"
%&9 !angladesh:s "inancial Sector Ris+s and Stability:

%&9a !angladesh:s "inancial sector Ris+s:
Drawin! on the lessons from the !lo al crisis, sound principles for the !overnance, desi!n, and implementation of stress testin! pro!rams at anks are needed" ' sound stress testin! pro!ram should 7i8 provide forward@lookin! assessments of risk5 7ii8 complement information from models and historical data5 7iii8 e an inte!ral part of capital and liquidity plannin!5 7iv8 support internal and e)ternal communication5 7v8 !uide the settin! of a ankIs risk tolerance5 and 7vi8 facilitate the development of risk miti!ation plans across a ran!e of stressed conditions" The need for ank supervisors to e confident of audit quality has een reinforced y a variety of factors and events" These include% concerns a out the risk of audit failures, !lo al e)pansion of ma$or audit firms, and increased comple)ity of oth accountin!
Page6
standards and financial instruments" (n addition, the challen!es associated with fair value estimation processes, which have een amplified y the current market crisis, underscore the importance of hi!h quality audits" 's such, the Basel +ommitteeIs focus is on the followin! areas% ankers1 and supervisors1 reliance on e)ternal auditors1 e)pertise and $ud!ments5 hi!h@quality audits which enhance market confidence particularly in times of severe market stress5 and increasin! reliance on hi!h@quality ank audits to complement supervisory processes" For Ban!ladesh, policies are needed to maintain international auditin! standard to avoid e)posure to financial risks of different types"
%&9b Overall .olicy Stance:

For minimi-in! credit and liquidity risks in the financial market, the priority is to create a competitive ankin! system 7coverin! non@ ank financial institutions as well8 that has the capacity to overcome maturity@mismatch and classified loan pro lems" (t is important for the anks to effectively identify, measure, monitor, and control credit risk, as well as to understand how credit risk interacts with other types of risk 7includin! market, liquidity, and reputation risks8" The !lo al financial turmoil hi!hli!hts the importance of addressin! une)pected aspects of credit, concentration, market, liquidity, le!al, reputation, and all other types of risks y the local anks" The important a!enda for Ban!ladesh would e to convert the learnin! from the !lo al crisis into an opportunity for developin! risk miti!atin! strate!ies" (t would e important for financial sector policies to encoura!e the anks to use any e)cess liquidity in the ankin! system for providin! credit to productive activities" The Ban!ladesh Bank, on its part, should stren!then its prudential oversi!ht and closely monitor the liquidity situation in the ankin! system" Prudent actions are also required to implement the Basel (( framework of supervision and disclosure principles toward risk mana!ement and capital plannin!" (n this conte)t, further stren!thenin! of the dia!nostic review of the financial health of the anks, currently undertaken y the Ban!ladesh Bank, would contri ute toward improvin! their operational efficiency and financial via ility" (n addition, it would e important for the Ban!ladesh Bank to continue its efforts in ur!in! the anks to reduce their lendin! rates, increase competition amon! the financial intermediaries, and pursue stron! monitorin! and supervision measures so that the financial institutions reduce administrative cost y improvin! efficiency and reducin! the urden of nonperformin! loans"
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Chapter *: ;hy investing in $utual fund<

Mutual "und:
An in#estment instrument that is made up of a pool of funds collected from many in#estors for the purpose of in#esting in securities such as stocks, bonds, money market instruments, and similar assets! &utual funds are operated by money managers, who acti#ely manage a fund's assets in an attempt to produce positi#e returns for the fund's in#estors! A mutual fund's portfolio strategy is structured and maintained to match the in#estment objecti#es stated in its prospectus!
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A &utual $und is a trust $und established with the intention of in#esting a pool of sa#ings in #arious type of securities for the benefit of in#estors! A small in#estor is unable to di#ersify his portfolio simply because of inade(uate amount a#ailable for in#estment! A mutual fund pro#ides a means of di#ersification of in#estment to small in#estors! Initially a mutual fund collects the funds from small in#estors and then they are in#ested into the securities of different types, thus di#ersifying the portfolio! The &utual $und ser#es as a link between the public and the capital market!
=olatile Capital Mar+et:
Page6
?an-11 3e(-11 2ar,h 4pr-11 2a<-11 ?&n-11 ?&l-11 4&g-11 $ep-11 @,t-11 /ov-11
D$= 7eneral Inde> 619 . 2 !"17. 9 5275.1" 50"2.95 !79 ."7 509".19 5" 0.1 5195.6 !9"7.09 !205.07 !!0"."7
's a retail investor, it is not possi le for us to invest in our capital market" The inde) in Lanuary ?CBB was EB>;";?" But in /ovem er ?CBB the DS, !eneral inde) was only 99C<"<D" so the market is more volatile and the portfolio risk is also hi!h"
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=olatile Money Mar+et:
(nd of period
!an+ rate
Call $oney $ar+et>s 1eighted average interest rates on !orro1ing #ending ++!,/!)+*!.) /!)* 0!,+*!/. ++!2+ +2!*. +*!-+ /!11 -!0. -!)+ .!)+ -!.) )!*1 ,!,2 .!.. ,!., ,!/1 ,!+/ ++!,/!)+*!.) /!)* 0!,+*!/. ++!2+ +2!*. +*!-+ /!11 -!0. -!)+ .!)+ -!.) )!*1 ,!,2 .!.. ,!., ,!/1 ,!+/
Schedule ban+s> 1eighted average interest rates on eposits ,!./ ,!),!0+ 1!*, 1!21!21 1!.2 1!-* /dvances ++!.++!-+ ++!/) +2!*2 +2!+1 +2!-2 +2!)) +2!,.
Spread
%611: ?anuary "ebruary March /pril May ?une ?uly /ugust Septe$ber October %616: ?anuary "ebruary March /pril May ?une ?uly /ugust Septe$ber October
)!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!** )!**
-!/) -!01 )!+-!/, -!/. )!+) )!2. )!2.
,!.+ ,!2. ,!*/ ,!*/ ,!*/ ,!*+ ,!** ,!*,!*+ ,!*.
++!)+ ++!-1 ++!.* ++!.2 ++!.+ ++!.+ ++!2++!2. ++!+1 ++!2+
)!2* )!2)!2+ )!2. )!22 )!.* )!2)!+/ )!+, )!+0
@igh Inflation:
$ate of /nflation 9as measured *y 0P/, *ase <==5-=6; Point to &oint Mont ly A1erage9!(el1e Mont ; 8cto*er, 20<< BB"9?F BC"B;F Se&tem*er, 20<< BB">DF >"D>F 8cto*er, 20<0 E";EF ;"B?F
The point to point inflation rate in Ban!ladesh is BB"9?F" (t is relatively hi!h compared to :cto er, ?CBC"
Page6
#o1 Interest rate Co$pared to inflation Rate:

A""34"56% I"T6R6ST RAT6 57ART 3f The S576%4L6% A"8S 9%6P3SIT RAT6: 9P6R56"TA;6 P6R A""4&: is gi#en below< -a$e of the !an+s Savin Special -otice eposit 5S- 3 gs eposit epo = +!** 2)!** )*!** +**!* sit +!** cror crore crore * cror e but but but crore e =2)! =)*! =+**! and ** ** ** abo# cror crore crore e e )!1) -!)* )!** )!2) )!)* ,!** ,!**? 0!** -!** -!** -!** -!2) -!** -!)* -!** -!1) -!)* )!** )!** "i4ed eposit . mont hs but= , mont hs 0!)* 0!)* 0!)* , mont hs but= + year /!** /!** /!** + year but= 2 years /!)* /!)* /!)* 2 years but= . years +*!** ** +*!** ** +*!** ** . years and abo# e n>a n>a
Page6
SO-/#I ?/-/'/ /AR/-I
+*!** **
RB./#I !C! R/CB! !/SIC ! !# .B!/#I B''/R/ /!) !/-C I"IC IS#/MI -!# '@( CI'D BC!# IC! (!# -CC!# .RIM( SOB'@( /S' @/C/ /#) /R/"/@ SI!#
,!** )!**? 1!** )!**? 1!** 1!**? 1!)* )!)* -!)* -!)* ,!** )!** )!.) -!**? /!** .!**? +2!** -!)*? 1!)* )!** ,!**? 0!)* ,!**? 1!** )!)* )!)* ,!)* -!** .!)*
-!** -!** -!** )!-* -!** -!)* -!2) -!** 2!** )!** -!** 2!)* -!** )!** ,!** )!** .!** )!** )!** .!)* 2!1)
-!2) -!** -!2) )!/* -!** )!** -!.* )!** 2!)* )!** 1!** -!** )!** )!** 1!** )!)* )!)* )!2) )!)* .!)* .!**
-!)* -!** -!)* ,!-* -!** 0!** -!-* ,!** -!** )!** 1!)* -!)* ,!)* )!** 1!)* ,!** )!)* )!2) ,!** .!)* .!2)
-!1) -!** -!1) ,!0* -!** 0!)* -!)* 1!** 2!** )!** 1!1) /!2) 1!*) )!** 1!1) 1!** 0!** )!)* /!** .!)* .!)*
)!** -!** )!** 1!2* -!** /!** -!)* 0!** 2!** )!** /!** /!)* 1!.*
0!)*? /!)* 0!)* 0!)* +*!** ** 0!)* ++!** ? +2!** +2!** ** +2!** ** +2!** ** 0!** ++!** ? +2!** +2!** **
/!**? /!)*? +*!** +*!** +*!)* ? ++!** /!** /!)* +*!** ** /!** /!2) /!)* +*!)* ** /!** +2!** ** ++!** ** +2!** ** +2!** ** 0!** ++!** ** /!)* +2!** ** ++!** ** +2!** ** +2!** ** 0!** ++!** ** /!)* n>a
n>a +*!** ** /!)* ++!** ** /!)* n>a
++!** n>a ** +2!** n>a ** n>a n>a 0!)*
Page6
+2!** ** )!** +2!** ** /!2) +2!** ** 0!** +2!** ** ++!** +2!** ** ** /!** +2!** ** +*!** +2!** ** ** .!)* ++!** ? +2!** .!)* +2!**
/!**? +*!** ++!** +2!** +2!** +2!** ? ** ** ** +2!** +2!** 1!**? +*!** 0!)*? ** +2!** ? +2!** ++!2) +2!** +2!** n>a n>a ** ** +2!** +2!** +2!** +2!** ** ** ** ** +2!** +2!** 1!1) 1!1) ** ** +2!** +2!** ++!** n>a ** ** ** +2!** +2!** +2!** +2!** ** ** ** ** +2!** +2!** n>a n>a ** ** +2!** +2!** ++!** +*!** ** ** ** ** ++!** ++!** /!** /!**? ? ? +2!10 +2!** +2!** +2!** +2!** n>a n>a
B'C@) !/-A#/ M(RC/ -'I#( O-( !/-C (EIM .R(MI( R "IRS' S(CB S'/- / R 'RBS' !/-C MB'B/ # 'RBS' !/-C /SI/ !C!#
-!**? )!** ,!** ,!**? /!*) )!** ,!** ,!)* )!** ,!** ,!)*? ,!1) )!)*? /!)* 1!2)? 0!**
-!** 1!** -!** .!** -!** 1!)* -!** -!** )!)* -!)* -!** -!** )!** .!** .!** .!)* .!)* -!** )!** +!)*
-!** 0!** ,!)* -!** )!** 0!** )!** -!)* 1!** 1!)* -!2) -!2) 1!** 1!** .!** .!)* .!1) -!** )!** )!**
?/MB-/ )!** S@/@?/ #/# !R/C -!**
*!**? 0!)* COMM( 2!1)? RCI/# !& 0!** S'/-&C@ 2!**? /R' 0!** @/!I! -!1) S!I -!. )!)* 1!**
** ++!** ** /!** /!2) /!)* +2!** ** 1!** 1!)* /!** +2!** ** -!** -!** -!** +2!** ** )!2) )!)* ,!** +2!** ** 0!** 0!** 0!** +2!** ** +*!** +*!2) +*!)* +2!** ** ** ** ** )!** )!)* )!)* +2!** ** 0!1) 0!1) 0!1) +2!** ** 0!)* /!** /!** +2!** ** -!)* )!** ,!** +2!** ? +.!** ,!** 1!** /!** +*!** ? +2!** 0!** 0!)* /!** +2!** ** 1!1) 0!** 0!)* ,!)*? +2!** 1!** 1!2) 1!)* ++!** ? +2!** )!** 0!1) /!** ,!2)? +2!** -!** -!+* -!2) +*!2) ? ++!** -!** -!** -!** +2!** ** -!** -!** -!** )!** 1!** )!** 1!.* )!** /!*)
** ++!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ? +.!** +*!** ? +2!** +2!** ** ,!)*? +2!** +2!** ** ,!)*? +2!** +*!)* ? ++!** +2!** **
** ++!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +2!** ** +*!** ? +2!** +2!** ** ,!)*? +2!** ++!-* ? +2!** 1!**? +2!** +*!1) ? ++!2) +*!** ? +2!** +2!** ** 1!)*
++!** ** /!01? /!/2 n>a
++!** ** /!/,? +2!,/ n>a
++!** ++!** ** ** n>a n>a n>a +2!** ** +2!** ** n>a ++!** ** +2!** ** n>a n>a )!**? +*!** /!))? +*!)* ,!1)? 1!)* ++!** ? ++!)* +*!** ** n>a +2!** ** +2!** ** n>a ++!** ** +2!** ** n>a n>a )!**? +*!** /!))? +2!** ,!)*? 0!** ++!2) ? +2!** +*!** **
CI'I -&/& -!**
Page6
+2!** +2!** ** ** 0!2) 1!1)
+2!** +2!** ** ** )!)* n>a
;OORI /# "/#/@ @S!C
+!** -!)* +!)*? 1!**
+!** +!)* +!2)
+!** .!** )!2)
+!** .!** 0!+*
+!** .!** 0!+*
+!** .!** 0!+*
)!2) ++!** ? +2!** +!2)? ++!**
,!** ++!** ? +2!** +!1)? +2!**
0!** ++!** ? +2!** 2!**? ++!)*
0!** 0!** +*!** n>a ** 2!**? /!-) n>a
The interest rate !iven y the ank to the customers is not enou!h to compensate the inflation rate of our country" The inflation rate is hi!h" That1s why as a retail investor we are not interested to invest in the ank"
'he reasons behind investing in $utual fund:

:ver the past decades mutual funds have !rown intensely in popularity and have e)perienced a considera le !rowth rate" &utual funds are popular ecause they make it easy for small investors to invest their money in a diversified pool of securities" 's the mutual fund industry has evolved over the years" People who are a less risk taker and a lon!@term investor you can consider investin! on &utual funds" Reduce ris+s: &utual Funds diversify your portfolio y investin! in various securities 2 minimi-e the risk ecause &utual funds are not like volatile as other secondary market shares" Throu!h investin! in various securities they can diversify their portfolio and can minimi-e risk and ma)imum return" &utual funds also lessen e)posure to risk" For e)ample, if one company in the fund went ankrupt, the overall impact on your portfolio would e less than if you had invested everythin! in that one company" Ma4i$ize the security and e4pectation on invest$ent opportunities: &any people don1t have the time, skill or financial resources to research and uy a alanced portfolio of individual stocks and onds" The fund mana!ers with the stron! research take e)plore new investment options make availa le opportunities for your investments to flourish" (nvestments will e secured with a less risk and moderate returns"
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#iFuidity: &ost mutual funds allow shareholders to sell shares at any time, without penalty 7unlike +Ds, for e)ample8" :f course, there are fees associated with sellin! shares, so frequent tradin! can e costly" >uic% access to your money and &utual Funds can e ou!ht and sold on any usiness day" /ffordability: (nvestors don1t need lots of money to invest in mutual fund as the minimum investment in mutual fund starts from B,CCC taka" ' &utual Fund ecause of its lar!e corpus allows even a small investor to take the enefit of its investment strate!y" #o1 Costs: &utual Funds are a relatively less e)pensive way to invest compared to directly investin! in the capital markets ecause the enefits of scale in rokera!e, custodial and other fees translate into lower costs for investors" They can escape themselves from this kind of costs" So they can invest in minimum cost" 3eturn ad$ustment is also easier for them" 'a4 !enefits: The ta) enefits that &utual Funds investors en$oy at the moment are the treatment of lon!@term capital !ains" Dou le ta)ation can e avoided y investin! in &utual funds for lon!@term" Ta) enefit increases their profita ility so they are very interested to invest in mutual fund" 'ransparency: ' mutual fund is operated y a fund mana!er, who makes investment decisions ased on the fund1s prospectus" This is a le!al document filed with the Securities and ,)chan!e +ommission that e)plains the fund1s o $ectives, investment strate!ies, risks, performance, and distri ution policy, fees and e)penses, and fund mana!ement" ' potential investor can read the prospectus to determine if the fund suits his or her own investment needs" The investor !ets re!ular information on the value of his investment in addition to disclosure on the specific investments made y the fund, the proportion invested in each class of assets and the fund mana!erIs investment strate!y and outlook"
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Chapter , .erfor$ance of Mutual "und Industry in !angladesh

Ban!ladesh mutual fund industry has witnessed si!nificant unpredicta ility and !rowth in the past few years driven y several economic and demo!raphic factors" (nvestors have !ained around <=CF of returns on the last si) mutual funds participatin! in their (nitial Pu lic :fferin!s 7(P:8 even if those investors had sold them within the ne)t three months after the first dayIs trade" This situation has motivated many investors to participate in the private placement and (P: of the mutual funds in the recent years" The other reasons are increasin! confidence level of the investors, !rowin! market capitali-ation, risin! income and savin!s level, and the !rowin! asset mana!ement companies in Ban!ladesh"
2&t&al 3&nd Ind&str< in Bangladesh .4s o) De,e'(er5 20100 4ssets 9nder 2&t&al 3&nd .%a#a in 2n0 4ssets 9nder 2&t&al 3&nd in ter's o) 2ar#et +apitali8ation 4ssets 9nder 2&t&al 3&nd to 7DP Ratio "95 7 1.2!; 0.6!;
Until Decem er, ?CBC there are <= mutual funds in Ban!ladesh" These are mana!ed asset mana!ement companies such as '(&S, BDBG, (+B, (+B '&+G, 3'+,, G3 AG:B'G"
Number of %utual &unds No. of 1pen end funds No. of #lose end funds No. of 2sset management companies
"5 ! "1 12
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The !rowth of mutual funds industry did not comply with the market !rowth" 'ssets under mutual funds increased at a +'A3 of ?<F in last = years, ut industry capitali-ation percenta!e total market is !radually decreasin!" The market capitali-ation
of mutual fund industry is only BF of total capitali-ation, whereas in (ndia it is B=F and in Pakistan ;F of total market capitali-ation" So the re!ulatory concern a out more mutual funds in Ban!ladesh was totally illo!ical, rather more mutual funds would lessen more speculative tradin!, which would eventually rin! more sta ility in the market"
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&any anks and financial institutions are in the queue with the proposals for their funds" ' num er of proposals for new mutual funds are awaitin! approval" +urrent performance of the mutual funds in the secondary market of Ban!ladesh has not yet een noteworthy" The return is well elow the annuali-ed market return of appro)imately ?>F in the Dhaka Stock ,)chan!e" 3eali-in! this hi!h demand@supply !ap in the private placement and (P:, in the recent times, there have een many new issuers of mutual funds who have already finished the formalities with the re!ulators, and many others whose proposals are on the oard positively" This is essentially a stron! si!nal for the development of an or!anic capital market, offerin! a safe alternative investment avenue for the investors that really can reduce the e)cessive and a!!ressive dependence on equity stocks" 'lthou!h at the pre@(P: or (P: phase, investors are profitin! well, the secondary market for mutual funds has remained much less profita le" Since investors are not really impressed y the mar!inal performance of the mutual funds5 they feel reluctant to put money in them in the secondary market" &any of the investors have complained of waitin! too lon! for a point difference enefit or facin! forced sale to avoid further loss and recover he opportunity loss" Therefore, the consequence is clear" ' dull secondary market for mutual funds has een restrictin! investors from takin! advanta!e properly, and thus makin! more and more investors
ne!ative towards them" Gess demand in the secondary market is essentially makin! the (P:s or Private placements much less attractive since investors at these sta!es fear losin! money, or even illiquidity of their investment" ' couple of potential fund issuers have recently e)pressed a fear of illiquidity for their potential new fund issues" This is quite rational and almost inevita le"
/sset Manage$ent Co$pany

A/MS /0? /0? AM0+ ?D?+ $A0+$ @+8?A+
-et /sset of 'otal Industry

B;F B<F <EF 9F ?<F EF
There are B? asset mana!ement companies operated in our country" They mana!ed <= mutual funds" (n these B? asset mana!ement companies, the mutual fund industry is dominated y E asset mana!ement companies" There are 9 open end mutual funds in Ban!ladesh, amon! these < mana!ed y (+B and another one is mana!ed y Prime Finance"
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Ban!ladesh mutual fund industry !rew at ?<F as a!ainst the !lo al avera!e of 9F" :ver the period, the mutual fund industry in mature market like the US and France !rew at 9F while some of the emer!in! markets like +hina and (ndia e)ceeded the !rowth witnessed in the Ban!ladeshi market" Ban!ladesh has een amon!st the fast !rowin! markets for the mutual funds since ?CC="
Page6
(nvestment in mutual fund in Ban!ladesh comprised only BF of national savin!s, whereas in (ndia it1s around ;F" 0ountry ?anglades /ndia Percentage of Aational Sa1ings BF ;F
'sset under mutual fund industry !rowth is not a diverse event from the economy" (ts !rowth depends not only in capital market !rowth, ut also in economic !rowth as well" Ban!ladesh1s ADP is !rowin! at a EF" /ational savin!s as a percenta!e of ADP has !rown ?;F to <?F from ?CC=@?CCE to ?CC>@?CBC"
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&ost of the sa#ings goes to bank deposits around )0@!
.erfor$ance /nalysis of Mutual "unds Managed !y /IMS of !angladesh #i$ited:

'(&S of Ban!ladesh Gimited is the first private asset mana!ement company in Ban!ladesh" (t is the first to launch private mutual funds in Ban!ladesh" 'sset 2
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(nvestment &ana!ement Services of Ban!ladesh Gimited 7popularly known as '(&S of Ban!ladesh8 was re!istered in Decem er B>>;, which emer!ed as the first purpose @ uilt private asset mana!ement company of the country" The company was formally inau!urated on 'u!ust ?>, B>>> y the Finance &inister and remained as the only one of its kind for the ne)t decade in Ban!ladesh"
'(&S of Ban!ladesh Gimited mana!es B? mutual funds" These are% '(&S F(3ST AU'3'/T,,D &UTU'G FU/D A3'&,,/ &UTU'G FU/D :/,% o o S+H,&, :/, S+H,&, T*:
3,G('/+, F(3ST &UTU'G FU/D &TB F(3ST &UTU'G FU/D PUB'G( B'/K F(3ST &UTU'G FU/D '/DH'/( G(F, &UTU'G FU/D (DG+ F(3ST &UTU'G FU/D 'A3'/( &UTU'G FU/D B3'+ P3:0(D,/T &UTU'G FU/D '(&S S,+:/D P3:B'SH( &UTU'G FU/D +:/T(/,/T'G &UTU'G FU/D
/IMS "irst Auaranteed Mutual "und

Fund & Sc eme Aame Paid B& 0a&ital Date of +isting
Tenure Capital Guarantee
A/MS First @uaranteed Mutual Fund BE; &illion Taka &ay ?;, ?CCC
Redemption at maturity on June 30, 2015 after original maturity of five years ended in June 2005. Originally the capital of the Fund as under ritten at redemption !y "#$% and &"'( during the initial five years of life. $ater in 2005 the unitholders resolved to reduce the guarantee to 50) under ritten only !y &"'(. *his translates that 50) of the paid+up capital loss ,difference !et een the face value and net asset value hen the latter is lo er- ill !e !orne !y &"'( at the time of redemption.
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Face )alue Mar%et +ot !a. Status

Investment Parameter
Taka B 7:ne Taka :nly8 ?=CC units of B Taka each

"nvestment and income, including capital gain, of the Fund is ta. e.empt /nli0e traditional mutual funds availa!le in 1angladesh, the Fund is investing in !oth e2uity ,stoc0 mar0et- and fi.ed income securities ,F"(-
Manager S&onsors
!rustee 0ustodian
A/MS of ?anglades +imited (PD+ of Ban!ladesh Gimited, Sandhani Gife (nsurance +ompany Gimited, Pan!aea Partners 7BD8 Gimited, (DG+ of Ban!ladesh Gimited, Southeast Bank Gimited, Uttara Finance 2 (nvestments Gimited, Sandhani +redit +ooperative Society Gimited, Ban!ladesh (ndustrial Finance +o" Gtd Ban!ladesh Aeneral (nsurance +ompany Gimited 7BA(+8 Standard +hartered Bank
"inancial .erfor$ance of /IMS "irst Auaranteed Mutual "und:

AA) &er S are at Mar%et Price#
Cear Eune, 2006 Eune, 200F Eune, 200G Eune, 200= Eune, 20<0 AA)DS are B"C? ?"?= ?"D? <"?= =";9 Page6
't the end of Lune, ?CBC its /et 'sset 0alue per share increases to taka =";9" But its /'0 per share at the end of Lune, ?CCE was taka B"C?" (ts face value per share is B taka each"
-arnings Per S are#

'lthou!h its ,PS was @C"CC9 at Lune, ?CCE, it increases later" (ts ,PS increases to C";B taka at the end of Lune, ?CBC"
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Cear Eune, 2006 Eune, 200F Eune, 200G Eune, 200= Eune, 20<0
-PS @C"C9 C"<E C"= C"<< C";B
ividend per Bnit:
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Cear 2005-2006 2006-200F 200F-200G 200G-200= 200=-20<0
Di1idend Per Bnit B;F BCF+, ?CF B nMa nMa D?"=CF+,DC F B,
'lthou!h its reported performance is !ood" But its mutual fund does not !ive re!ular dividend to its shareholder" (n the recent year it !ives to its shareholders D?"=CF cash dividend and DCF onus" This mutual fund !ives the onus share to its shareholders at ?CC=@?CCE and ?CC>@?CBC"
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Ara$een Mutual "und One: Sche$e one:

Fund & Sc eme Aame Paid B& 0a&ital Date of +isting
Tenure Grameen Mutual Fund One: Scheme one
Taka BDC million Septem er C9, ?CC=

Redemption at 'aturity on June 30, 2015

Investment Parameter
Taka BC 7Ten Taka :nly8 =CC units of BC Taka each

"nvestment and income, including capital gain, of the Fund is ta. e.empt /nli0e traditional mutual funds availa!le in 1angladesh, the Fund is investing in !oth e2uity ,stoc0 mar0et- and fi.ed income securities ,F"(-
Manager S&onsor s !rustee 0ustodi an
A/MS of ?anglades +imited Arameen Bank Arameen Fund Standard +hartered Bank
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"inancial .erfor$ance of Ara$een Mutual "und One: Sche$e one:

AA) &er S are at Mar%et Price#
AA)DS are BC ?B"?D ?>"=< <9"E= =9"E<
This mutual fund was listed on Septem er C9, ?CC=" The face value of the mutual fund is ten taka each" This mutual fund1s /et 'sset 0alue per share at market price increases over the year"
(arnings .er Share:

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(n the first year, its earnin!s per share is low" (ts amount was C"CCCEC=DE= taka" 'fter the operation of its first year, its ,PS increases over the year" (ts ,PS increases to B?"B;<D at the end of Lune, ?CBC
-PS C"CCCEC=DE = <"=? 9">E <"9= B?"B;<DDC< =
ividend per Bnit:
Page6
Cear 2005-2006 2006-200F 200F-200G 200G-200= 200=-20<0
Di1idend Per Bnit nMa ?>"CC nMa DB"CC nMa
(t did not !ive any dividend its shareholders at its operation of its B st year" But at ?CC;@ ?CC> it !ives to DBF dividend to its shareholders" This mutual fund does not !ive re!ular dividend to its shareholders"
.erfor$ance /nalysis of Mutual "unds Managed by IC! /sset Manage$ent Co$pany #i$ited:
Page6
(+B 'sset &ana!ement +ompany Gtd" is a su sidiary of (nvestment +orporation of Ban!ladesh 7(+B8" The +ompany was created as a part of the restructurin! pro!ramme of (+B under +apital &arket Development Pro!ramme 7+&DP8 initiated y the Aovernment of Ban!ladesh and the 'sian Development Bank" The +ompany was incorporated as a pu lic limited company with an authorised capital of Tk" B"CC illion and a paid up capital of Tk" =C"CC million under the +ompanies 'ct, B>>9 with the re!istrar of Loint Stock +ompanies and Firms on = Decem er, ?CCC" The +ompany o tained license on B9 :cto er, ?CCB from the Securities and ,)chan!e +ommission under Securities and ,)chan!e +ommission 7&utual Fund8 3ules, ?CCB to carry out the mutual fund activities"
.roducts:
( + B ' & + G : P , /@, / D F U / D% (+B '&+ Unit Fund (+B '&+G Pension HoldersI Unit Fund ( + B ' & + G +G:S,@, / D F U / D%
(+B '&+G First &utual Fund (+B '&+G (slamic &utual Fund (+B '&+G First /3B &utual Fund (+B '&+G Second /3B &utual Fund Prime Finance First &utual Fund
IC! /MC# 1st Mutual "und:

Fund & Sc eme Aame SiHe Bnits (ere alloted
Type o the Fund ICB AMCL 1st Mutual Fund
Taka BC"CC crore Luly ?B, ?CC< Taka BCC 7:ne Hundred Taka :nly8 =C units of BCC Taka each Page6
%lose+end mutual fund of 10 yeara tenure
Face )alue Mar%et +ot
!a. Status
#ividend income is ta. free upto *0. 25000.00. "nvestment in the fund !y an individual assesse ill 2ualify for ta. credit under section 33,2- of the "ncome *a. ordinance, 1453.
Manager S&onsor s !rustee 0ustodi an
/0? AM0+ (+B +apital &ana!ement Gtd, a su sidiary of (+B (nvestment +orporation of Ban!ladesh 7(+B8 (nvestment +orporation of Ban!ladesh 7(+B8
"inancial .erfor$ance of IC! /MC# 1st Mutual "und: -/= per Share at Mar+et .rice:
/'0 per share of (+B '&+G Bst &utual fund increases over the year" 't the end of Lune, ?CBC it increases to tk EB>">;" (ts face value per share is tk BCC each"
Cear Eune, 2006 Eune, 200F
AA)DS are B?<"B9
BDC">> Eune, 200G Eune, 200= Eune, 20<0 ?>="E9 <=E"=C EB>">;
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(arnings .er Share:

Gike its /'0 per share, its ,PS also increases over the year" (ts ,PS was DC"D; taka in the financial year of Luly, ?CC> to Lune, ?CBC"
Cear Eune, 2006 Eune, 200F Eune, 200G Eune, 200= Eune, 20<0 -PS BD"EC ?9">< <B"?9 <D">; DC"D;
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ividend .er Bnit:

's its ,PS increases in the financial year Luly, ?CC> to Lune ?CBC, it !ives =CF dividend to its shareholders at the financial year" (+B '&+G B st &utual Fund does not !ive any onus share to its shareholders like '(&SBST&F"
Cear 2005-2006 2006-200F 200F-200G 200G-200= 200=-20<0
Di1idend Per Bnit BE ?C ?= <= =C
Page6
IC! /MC# Isla$ic Mutual "und:

Fund & Sc eme Aame SiHe Bnits (ere alloted
Type o the Fund ICB AMCL Islam!c Mutual Fund
Taka BC"CC crore /ovem er C;, ?CC=

%lose+end mutual fund of 10 yeara tenure
Taka BCC 7:ne Hundred Taka :nly8 =C units of BCC Taka each
*a. re!ate as per income ta. ordinance, 1453.
Manager S&onsors !rustee 0ustodian
/0? AM0+ (+B +apital &ana!ement Gtd, a su sidiary of (+B (nvestment +orporation of Ban!ladesh 7(+B8 (nvestment +orporation of Ban!ladesh 7(+B8
"inancial .erfor$ance of IC! /MC# Isla$ic Mutual "und: -/= per Share at Mar+et .rice:
/'0 per share of (+B '&+G B st &utual fund increases over the year" 't the end of Lune, ?CBC it increases to tk 9>"DE" (ts face value per share is tk BCC each" (t is performin! lower than (+B '&+G Bst &utual Fund"
Page6
AA)DS are BC?"?< B9?"DC ?CD"<< ?9D"?; <<>"9C
-arnings Per S are#

Gike its /'0 per share, its ,PS also increases over the year" (ts ,PS was DC"D; taka in the financial year of Luly, ?CC> to Lune, ?CBC"
Page6
-PS E"BC B9">9 ??"=C ?E"EC 9>"DE
ividend per Bnit:
's its ,PS increases in the financial year Luly, ?CC> to Lune ?CBC, it !ives <=F dividend to its shareholders at the financial year" Gike (+B '&+G B st &utual Fund, (+B '&+G (slamic &utual Fund does not !ive any onus share to its shareholders"
Page6
Cear 2005-2006 2006-200F 200F-200G 200G-200= 200=-20<0
Di1idend Per Bnit E B? BE ?= <=
Recent #isted Mutual "und .erfor$ance 5%6113:

(n ?CBB the si) mutual fund collect money throu!h (P:" The mutual funds are% 2)(L $st )slamic %utual &und %(L $st %utual &und Southeast (ank $st %utual &und 3(L N4( %utual &und 54eliance 1ne5 the first scheme of 4eliance )nsurance %utual &und L4 6lobal (angladesh %utual &und 1ne
Page6
#R Alobal !angladesh Mutual "und One:

ate 10&6G&%661 %%&6G&%611 %G&6G&%611 60&16&%611 1*&16&%611 %6&16&%611 %8&16&%611 6*&11&%611 18&11&%611 %,&11&%611 61&1%&%611 69&1%&%611 -/=7share +*!-+ +*!2, +*!-. +*!.2 +*!2, +*!2. +*!*1 +*!*) +*!*2 +*!+/ +*!+/ +*
Mean $is% $e(ard to 1aria*ility
-0.0045G4244 C"CCBB??9>D @9"E9;9?;EE>
The return of G3 Alo al &utual fund is ne!ative" That1s why reward to varia ility is also ne!ative" So, we can say that the performance of G3 Alo al &utual fund is not satisfactory"
AReliance 3neA the first scheme of Reliance Insurance &utual $und<

/verage Return Ris+ Re1ard to variability 6&66%*,16* *!*+-0,,2-0 *!*-1)+0*-+
Page6
The return for 3eliance :ne mutual fund is positive and the return is C"CC? 7weekly8" The reward to varia ility is also positive" But this cannot e said that the performance is satisfactory
ate 62&68&%611 68&68&%611 1,&68&%611 %1&68&%611 %9&68&%611 6,&69&%611 11&69&%611 19&69&%611 %0&69&%611 69&6G&%611 10&6G&%661 %%&6G&%611 %G&6G&%611 60&16&%611 1*&16&%611 %6&16&%611 %8&16&%611 6*&11&%611 18&11&%611 %,&11&%611 61&1%&%611 69&1%&%611
-/=7Share +*!)+ +*!)2 +*!)1 +*!12 +*!12 +*!)0 +*!)0 +*!)+*!)) +*!-0 +*!-) +*!-. +*!-0 +*!-+ +*!.1 +*!./ +*!.0 +*!.+.!2. +2!,) ++!+. +*!)1
(!# -R! Mutual "und:

/verage Return Ris+ Re1ard to variability )9&,%920()60 *!**+.0,1+0 ?+!2./)-,.0,
The return for ,BG /3B mutual fund is ne!ative" So we can say that the performance of ,BG mutual fund is not satisfactory"
Page6
ate %*&60&%611 %2&60&%611 6%&62&%611 6G&62&%611 12&62&%611 %*&62&%611 *6&62&%611 68&68&%611 1,&68&%611 %1&68&%611 %9&68&%611 6,&69&%611 11&69&%611 19&69&%611 %0&69&%611 69&6G&%611 10&6G&%661 %%&6G&%611 %G&6G&%611 60&16&%611 1*&16&%611 %6&16&%611 %8&16&%611 16&11&%611 18&11&%611 %,&11&%611 61&1%&%611 69&1%&%611
-/=7Share +*!21 +*!. +*!.+ +*!.2 +*!.2 +*!.+ +*!.0 +*!-2 +*!-, +*!-/ +*!-/ +*!-+ +*!-) +*!-) +*!). +*!). +*!-0 +*!-+*!,) +*!)1 +*!)1 +*!), +*!-+ +*!+*!., +*!-) +*!-+ +*!2-
Page6
Southeast !an+ 1st Mutual "und:

Return Ris+ Re1ard to variability 6&66%669680 *!***).)/1+ *!,/,1/+-)-
The return of Southeast ank Bst mutual fund is positive and the reward to varia ility is also positive" But the performance of Southeast ank mutual fund is not so much satisfactory"
Page6
ate 1G&60&%611 %2&60&%611 6%&62&%611 6G&62&%611 12&62&%611 %*&62&%611 *6&62&%611 68&68&%611 1,&68&%611 %1&68&%611 %9&68&%611 6,&69&%611 11&69&%611 19&69&%611 %0&69&%611 69&6G&%611 10&6G&%661 %%&6G&%611 %G&6G&%611 60&16&%611 1*&16&%611 %6&16&%611 %8&16&%611 16&11&%611 18&11&%611 %,&11&%611 61&1%&%611 69&1%&%611
-/=7Share +*!-+*!-) +*!-0 +*!)+ +*!)+ +*!). +*!)0 +*!1 +*!1. +*!1+ +*!1 +*!1+ +*!1. +*!1+*!1) +*!10 +*!11 +*!1/ +*!0+ +*!02 +*!0+ +*!00 +*!/+ +*!/+*!/1 ++!*. ++!*2 ++!*2
Page6
M!# 1st Mutual "und:
Return Ris+ Re1ard to variability
)6&66%%G966* *!**.2002.?+!+/)/,,-0)
The performance of & L +st &utual fund is not satisfactory because of negati#e return and negati#e reward to #ariability!
Page6
ate %,&6%&%61 1 *1&6*&%61 1 %9&6,&%61 1 %2&60&%61 1 *6&62&%61 1 %9&68&%61 1 %0&69&%61 1 %G&6G&%61 1 %8&16&%61 1 %,&11&%61 1 69&1%&%61 1
-/= /!-) /!//!,/!21 /!10 +*!.0 +*!*+ /!02 /!22 /!.+ 0!/0
/I!# 1st Isla$ic Mutual "und:
Page6
ate %8&61&%61 1 %,&6%&%61 1 *1&6*&%61 1 %9&6,&%61 1 %2&60&%61 1 *6&62&%61 1 %9&68&%61 1 %0&69&%61 1 %G&6G&%61 1 %8&16&%61 1 %,&11&%61 1 69&1%&%61 1
-/=7Share +*!+/!-, +*!*0 /!1. /!-+ /!01 +*!-1 +*!*/ /!/) /!2/ /!.1 /!*0
Return Ris+ Re1ard to variability
)6&66%%G**%9 *!**20/.-20 ?+!.)1)./)*2
Page6
Mutual "und .erfor$ance listed in %616:

7rime (ank $st )#( 2%#L %utual &und '(8 &irst %utual &und )&)# (ank &irst %utual &und 7hoeni9 &inance $st %utual &und )#( 2%#L 3rd N4( %.&. &irst :anata (ank %utual &und 6reen 'elta %utual &und 7opular Life &irst %utual &und )&)L )slamic %utual &und;$ 787 &irst %utual &und P7P First Mutual Fund#
(.S -/= )6&,G /!)+
/F/+ /slamic Mutual Fund-<# 7rice ..5 N2<=Share ;"<E 7rice=N2< D;F
Po&ular +ife First Mutual Fund#

(.S -/= )6&6* /!/1
First Eanata ?an% Mutual Fund# 7rice 7.. Latest N2< ;"D; 7rice=N2< ;DF
(+B '&+G <rd /3B &"F"% 7rice Latest N2< 7." ;"B> 'i>idend ?ield $2..5@ 7rice=N2< >EF Page6
P oeni. Finance <st Mutual Fund# 7rice 7 'i>idend yield $ .2"@ Latest N2< ;";< 7rice=N2< D>F
/F/0 ?an% First Mutual Fund# 7rice !. Latest N2< BC">; 7rice=N2< DDF
D?7 First Mutual Fund# 7rice !.7 Latest N2< >"=E 7rice=N2< >BF
Prime ?an% <st /0? AM0+ Mutual Fund# 7rice 7.5 Latest N2< >"C= 7rice=N2< ;<F
@reen Delta Mutual Fund# 7rice 7.2 Latest N2< ;";> 7rice=N2< ;BF
Mutual "und listed before %616:

$st )#( %.&. 2nd )#( %.&. 3rd )#( %.&. th )#( %.&. 5th )#( %.&. .th )#( %.&. 7th )#( %.&. !th )#( %.&. $st (S4S 2ims $st %.&. )#( 2%#L $st %.&. )#( 2%#L )slamic %.&. Page6
6rameen %.&.one )#( 2%#L $st N4( %.&. )#( 2%#L 2nd N4( %.&. 6rameen 1ne:Scheme TAo 7rime &inance &irst %utual &und 3(L &irst %utual &und )#( 2%#L 2nd %.&. )#( 3mployees 7ro>ident %utual &und 1ne Trust (ank $st %utual &und
$rom the abo#e mutual fund we ha#e selected according to di#idend yield, Price>"AB per unit, "AB change from the pre#ious period etc!
Prime Finance First &utual Fund Trust Bank Bst &utual Fund ,BG First &utual Fund (+B '&+G Bst &"F" (+B '&+G (slamic &"F"
Page6
Chapter 0 Investing through $utual fund

(+B'&+GBST% AA) BB9">D BCE"D? B?<"B9 BDC">> ?>="E9 <=E"=C E?D"9>
2005 2005 2006 200F 200G 200= 20<0
Trust Bank 1st Mutual Fund:
Page6
AA) 20<0 20<< B?"<< B<">=
-PS C"9E B">;
Page6
Investing in Mutual "und by $a+ing Opti$al .ortfolio

(nvestments should have different patterns of return over the time" 'nd portfolio mana!ement refers the process y which an investor or portfolio mana!er can mana!e the relationship amon! the investments to uild an optimum portfolio that will meet investment o $ectives" 'n investor can minimi-e his risk y constructin! optimal portfolio"
4ss&'ptions<
* e assumed the followin! thin!s% *e have collected the weekly ended closin! price of E mutual funds"" *e have taken the data from BC Lanuary ?CBC to ?E Lune ?CBB" *e have taken /'0 for the selected E companies" DS, !eneral inde) has een used as a market return" *e have assumed risk@free rate ;"=CF annually" 's our calculation is weekly we converted this annual rate weekly"
Portfolio construction<
The main o $ective of these portfolios is to optimi-e the ,)cess 3eturn per unit of risk "(n determinin! the optimum portfolio the followin! steps were followed@ B" Unad$usted price of the selected E securities were collected and input" ?" *e have taken /'0 of these E securities"
Page6
<" 'fter calculatin! the inde) the return of each security was calculated y ad$ustin! the price with the inde)" 9" /e)t the e)cess return for each security was calculated ased on the risk free rate of investment" =" Then we calculated the percenta!e of investin! different securities when short@ sale is not allowed"
*hen short@sale is allowed%

The constraints under this scenario are%
*hen short sales are allowed%

(n this scenario short sale is allowed for optimi-ation" The only constraint under this scenario is%
Short sales are not allowed%

Security mean return C"CBBB? 9 C"CCC99 E C"CC?=; D C"CC?;= ? $eturnris% free rate C"CC>9; > @ C"CCBB> C"CCC>= ? C"CCB?B D *eta 1ariance9err or; C"CB; C"CCB?>D C"CCCED< C"CCC9;< e.cess return o1er *eta @C"CC; @C"CB= C"CC9 C"CC= E = < ? Page6
/0?AM0+ <st /0?/S+AM /0 -?+ !$BS!
@ B"B<;D? C"C;C=? B C"?EC9D < C"?<;=E >
/F/0 P$/M-
C"CC?C9 > C"CCC>D >
C"CCC9B = @ C"CCCEE
C"?C=C> < @ C"C99=<
C"CCC9? C"CCB?;?
C"CC? C"CB=
9 B
's the risk free rate of (+B(SG'&(+ and prime mutual fund is !rater we e)cluded these two mutual funds"
From this ta le we sorted the e)cess return over the eta from lar!est to smallest to !et the companies which are !ivin! e)cess return over the eta hi!her to lower and constructed the followin! ta le%
9 Ri RF : 9 Ri RF : i 2 ei I
< T3UST 2 ,BG 4 5 (F(+ (+B'&+G Bst C"CC?C= C"CBBB? C"CC?C?? @C"CC;<<< C"CC?=> C"CC<E=E C"CC?;= C"CC=BC?
i 2 ei
B"9C?B ,@CD B"EDC? ,@CD D"??E,@ BB B"E9>= ,@CE
9 R j R F : J
2 ei
C"CCCBB= C"CCCBD= B"D9,@CD C"CCCBD9
Ci
2 ei
C"CCCCCCCCC? DC C"CCCCCCCCC= >? C"CCCCCCCCC= >C C"CCCCCCCC9E C
C"CCCBB=? C"CCC?>C= > C"CCC?>CD E C"CCC9E9= >
So, the +ut@off rate is C"CCCCCCCCCC=>?" the investment wei!ht is !iven elow% T4,ST 3(L )&)# )#(2%#L$st 0.00 357 C"C?B;9< C"CBD C">=E9;?
Page6
mar%et 1ariance mar%et return &ortfolio return &ortfolio *etaImar%et 1ariance &ortfolio 1ariance
0.00<=2F60 4 C"<>F C"CC<<9D>? BB C"CCCCC;=C E> C"CCE<?D>=
(f we invest in this portfolio we will !et C"C<9DF return weekly assumin! C"CCE<?D>= risk"
Conclusion
The capital market of Ban!ladesh is now very much volatile" &utual funds can make a role in makin! the market well" ' small investor is una le to diversify his portfolio simply ecause of inadequate amount availa le for investment" ' mutual fund provides a means of diversification of investment to small investors" (nitially a mutual fund collects the funds from small investors and then they are invested into the securities of different types, thus diversifyin! the portfolio" *e can invest in mutual fund as it reduces risks , &a)imi-e the security and e)pectation on investment opportunities, provides liquidity in the financial market" /n our stoc% mar%et t ere are 4F mutual funds no(. All of t em are doing (ell. ! ese are &ro1ing good mar%et return to t e general in1estors. Je a1e tried to ma%e a &ortfolio *y mutual funds. 7ere (e selected 6 mutual funds. ! en (e made ( ic securities can &ro1ide ig er return. Je also calculated t e &ortion of in1esting in t ose securities.
Page6
Page6
'ppendi)
Date 5-Ean-<0 <2-Ean-<0 <=-Ean-<0 26-Ean-<0 2-Fe*-<0 =-Fe*-<0 <6-Fe*-<0 24-Fe*-<0 2-Mar-<0 =-Mar-<0 <6-Mar-<0
/0?AM0+<S! /'0 =C9"= D =BD"E B =?C"= = =<>"< 9 ==;"D ; ==D"9 9 ==9"> = ==9"= D =C?"B = 9>;"C ; 9>D"D ? (+B'&+GIs 3eturn C"C?=;9<D;; C"CC=ED>>=? C"C<EC>E9<E C"C<EC99C=9 @C"CC?<>;C;? @C"CC99EE;9; @C"CCCE;9D9E @C"C>9=?<E;= @C"CC;BC=B9; @C"CCCD??DD=
Page6
&arket (nde) 9,ED;" C= 9,D>9" DB 9,>=E" D9 =,?9<" 9= =,=C<" <; =,EC<" B> =,D9=" D; =,ECD" <D =,=EC" =E =,9CC" 9C =,9EC" D=
&arket 3eturn C"C?9><; C"C<<D>? C"C=D;9< C"C9>=D? C"CB;B<E C"C?=9= @C"C?9C> @C"CC;<= @C"C?;; C"CBBBDE
24-Mar-<0 40-Mar-<0 6-A&r-<0 <4-A&r-<0 20-A&r-<0 2F-A&r-<0 5-May-<0 <<-May-<0 <G-May-<0 25-May-<0 <-Eun-<0 G-Eun-<0 <5-Eun-<0 22-Eun-<0 2=-Eun-<0 6-Eul-<0 <4-Eul-<0 20-Eul-<0 2F-Eul-<0 4-Aug-<0 <0-Aug-<0 <F-Aug-<0 25-Aug-<0 40-Aug-<0 5-Se&-<0
=C9"> E =C9"= < =CC"B 9>>"? =C>"= ; =?E"D B =<B"B D =E;"; E =D<"9 D =;E"C ? EC="D = ECD"< ? E<;"C ? EBD"D > EB>"> ; E<>"< = EE9"9 B ED;"; > EDC"? 9 E>E"D E EDC"E 9 ED9"> B E;D"; = EEE"? ; E;D"C >
C"CB9=9E< @C"CCBD>>E9 C"C?CD><?E> C"C<<EB=>B> C"CC;9EDE=; C"CDC>=E=E; C"CC;BC<>?D C"C?B;;9<B; C"C<<EEDD>< C"CC?=>B;?; C"C=C=9>>=D @C"C<BDCD9D C"CC<=99;>9 C"C<B?9?>9< C"C<>B>EC=; C"C?BD><DD? @C"CB?D9B<;D C"C<>=ED>BE @C"C<D9;D;CB C"CCE<EDC=? C"CB>BD?>?D @C"C<B<=;=;B C"C<B?<<BB=
=,=B;" >9 =,=<<" E? =,=C?" D= =,=??" ED =,EC;" >C =,E99" B> =,=<9" E= =,D?;" ?< =,;DE" == =,>;;" >9 E,B=?" <> E,BDE" 9> E,<<?" ?B E,?CD"=E E,BD?"=9 E,<=9"DC E,<;B"C9 E,9E;"?< E,?;D"=< E,9;<">< E,EE?">E E,E<<"9D E,DDD">E E,E?C"<< E,;;>";;
C"CBCE== C"CC?EEB @C"CC==; C"CC<E?B C"CB=EB9 C"CCE?>? @C"CB>9B C"C<9>DE C"C?=;>< C"CB>B?= C"C?D?>B C"CC<>B> C"C?=?BB @C"CB>E; @C"CC=E9 C"C?>=BB C"CC9B9= C"CB<EE9 @C"C?D>9 C"C<B?<E C"C?DEBB @C"CC99< C"C?BD;? @C"C?<?E Page6 C"C9CDB=
G-Se&-<0 2<-Se&-<0 2G-Se&-<0 5-8ct-<0 <2-8ct-<0 <=-8ct-<0 26-8ct-<0 2-Ao1-<0 =-Ao1-<0 <<-Ao1-<0 24-Ao1-<0 40-Ao1-<0 6-Dec-<0 <5-Dec-<0 2<-Dec-<0 02.0<.20<< 0=.0<.20<< <6.0<.20<< 25.0<.20<< 40.0<.20<< 06.02.20<< <4.02.20<< 20.02.20<< 2F.02.20<< 0F.04.20<< <4.04.20<<
EDB"? E E>C"C B DC="? > D<?"? 9 D9C"= D=C"C = D;E"? E D;="; > ;C;"; < ;BB"B ;=B"D = ;=C"? D ;=;"B = ;<E"E ; ;BE"< < ;C>"= < D>;"> B D9>"C D D?<"B E>;"= ; D=; E;C"9 = <CB"C > E?9"; 9 =D<"D = EB="> <
@C"C?<C<>B>9 C"C?D><?=9= C"C??B99ECD C"C<;?BB?<? C"CBB?;C9=9 C"CB?;>EE>B C"C9;?DED;? @C"CCC9DC=;? C"C?>B;>;<E C"CC?;CE=?< C"C=CBBDB?= @C"CCBD<D=>> C"CC>?EDE99 @C"C?=CB;><E @C"C?9<??<?? @C"CC;<?>>E= @C"CB<BB;D?< @C"CE?<;= @C"C<9EE>E=D @C"C<<>C>==E C"C;=C=;?EB @C"BC?<C;DCD @C"==D=B<9B B"CD=?=>;;> @C"C;BDE9><? C"CD<=BE<9
E,;CD"?9 E,>9D"B9 D,C9?"<D D,<?D"9C"?> ;C;<"C? ;B;D"<< ;==9";? ;EC?"99 ;DDB"9B ;<=9";9 ;BE;"D= ;,<C9" => D,B<=" C? D,9<9" => E,;?B" C; D,9;9" ?< E,DB>" C9 E,C=?" 9B E,<;>" E< =,9E<" <= =,DD>" >B E,BD>" =<
@C"CBB>> C"C?C==? C"CB<DC; C"C9C9EB C"CB;=?D C"CCB;9= C"C9==?> C"CB=D9B C"CBD>D= C"CB?>C= C"C99;;= C"CC==EE C"CB>E9? @C"C9D9> @C"C???D C"CBEE?> @C"B9C;< C"C9B>;E @C"C;?=? C"C>D?? @C"BC??9 @C"C>>?? C"C==DBE @C"B99>D C"C=D>9< Page6 C"CE>B<;
20.04.20<< 2F.04.20<< 04.05.20<< <0.05.20<< <F.05.20<< 25.05.20<< 02.05.20<< 0G.05.20<< <5.05.20<< 22.05.20<< 2=.05.20<< 05.06.20<< <2.06.20<< <=.06.20<< 26.06.20<< A1erage $eturn $is% 0o1ariance ?eta
E<C"D E E=="B ; E9C"> B ED="> ; EE<"B 9 E=?"> D EB="> > EC;"> = =DC"E ECB"D ; =DC"C < ECB"9 B E?<"; ? EB9"? 9 EBC"? =
C"C?9CDD9BB C"C<;DB=?CB @C"C?BD;C?D9 C"C=9DB>CDB @C"CB;>>9E9= @C"CB=<<EB?; @C"C=EE<<=<E @C"CBB9?;D=D @C"CE?>DD?=E C"C=9E99?<9 @C"C=?DECB9= C"C==C9>D<9 C"C<D?E?9<< @C"CB=<=E>>9 @C"CCE9>=;<? C"CBBB?<DE= C"B99?;E9?D @C"CC?BEEBB= @B"B?<D<9DB>
E,9E>" >B E,C>9" E9 E,99D" CB E,==E" =? E,<9E" >> E,CDE" <? =,>>B" <; =,EBB" 9D =,D;;" B= =,=B?" ?C =,9;>" ;; =,DE?" ;> =,EDE" ?> =,E;E" D? =,;9B" ?E
C"C9E>>B @C"C=; C"C=D;BE C"CBE>;E @C"CE @C"C9?E= @C"CB<>; @C"CE<9B C"C<B9;= @C"C9DED @C"CC9C= C"C9>D?; @C"CB=C< C"CCB;<; C"C?DBD= C"CC<>B< C"CCB>?;
Date 2F.0<.20<0 0G.02.20<0 <5.02.20<0 22.02.20<0 2G.02.20<0
!rust /'0 BB"<9 <; BB"9? BB"=? BB"D; BB"DB C"CCDC= = C"CC;D= D C"C??=E > @ B>
=,=C<" =,EC<" =,D9=" D; <D =,=EC" Page6 =,ECD" @ C"C?9C> @ C"CB;B< E C"C?=9=
0F.04.20<0 <5.04.20<0 2<.04.20<0 2G.04.20<0 05.05.20<0 <2.05.20<0 <G.05.20<0 26.05.20<0 02.05.20<0 <0.05.20<0 <F.05.20<0 25.05.20<0 4<.05.20<0 0F.06.20<0 <5.06.20<0 2<.06.20<0 2G.06.20<0 06.0F.20<0 <<.0F.20<0 <=.0F.20<0 26.0F.20<0 02.0G.20<0 0G.0G.20<0 <6.0G.20<0 22.0G.20<0
BB"D= BB"=D BB"99 BB"DB BB"D? BB"; BB"E BB"D? BB"D9 BB"D; BB"D> BB";; B?"CB B?" B?"9 B?"; B?";E B<"C= B<"CE B<"= B<";= B<">9
E,DDD">E
Page6
C"CC=>9 C"CC<9B E @ C"CB=<? @ C"CBB?9 C"C?<EC B C"CCC;= 9 C"CCE;? E @ C"CBE>= C"CBC<9 = C"CCBDC E C"CC<9C D C"CCC;9 > C"CCDE< 9 C"CBC>9 < C"C?9>D > C"CB?>> ; C"CB?; B C"C?=>? E C"CCE9>
=E =,9CC" 9C =,9EC" D= =,=B;" >9 =,=<<" E? =,=C?" D= =,=??" ED =,EC;" >C =,E99" B> =,=<9" E= =,D?;" ?< =,;DE" == =,>;;" >9 E,B=?" <> E,BDE" 9> E,<<?" ?B E,?CD"=E E,BD?"=9 E,<=9"DC E,<;B"C9 E,9E;"?< E,?;D"=< E,9;<">< E,EE?">E E,E<<"9D
C"CC;<= @C"C?;; C"CBBBD E C"CBCE= = C"CC?EE B @ C"CC==; C"CC<E? B C"CB=EB 9 C"CCE?> ? @ C"CB>9B C"C<9>D E C"C?=;> < C"CB>B? = C"C?D?> B C"CC<>B > C"C?=?B B @ C"CB>E; @ C"CC=E9 C"C?>=B B C"CC9B9 = C"CB<EE 9 @ C"C?D>9 C"C<B?< E C"C?DEB B @ C"CC99< C"C?BD;
2=.0G.20<0 05.0=.20<0 <5.0=.20<0 20.0=.20<0 2F.0=.20<0 05.<0.20<0 <<.<0.20<0 <=.<0.20<0 25.<0.20<0 4<.<0.20<0 0F.<<.20<0 <5.<<.20<0 2<.<<.20<0 2G.<<.20<0 05.<2.20<0 <2.<2.20<0 <=.<2.20<0 26.<2.20<0 02.0<.20<< 0=.0<.20<< <6.0<.20<< 25.0<.20<< 40.0<.20<< 06.02.20<< <4.02.20<<
B<"D> B9"C= B9"C< B<">= B9"C= B9"<< B9"DE B9">D B="C9 B="< B="99 B="=> B="E9 BE"BB B="> B="DE B="9> B="E9 B9">> B9">> B9";? B<"DE B9"DD B9"9E B<"DD
; @ C"CBCDE C"CB;;= 9 @ C"CCB9? @C"CC=D C"CCDBE ; C"CB>>? > C"C<CCC D C"CB9?? ; C"CC9ED E C"CBD?; D C"CC>B= C"CC>DB = C"CC<?C D C"C<CC= B @ C"CB<C9 @ C"CC;;B @ C"CBDB< C"CC>E; 9 @ C"C9B=E C @ C"CBB<9 @ C"CDB=? C"CD<9C B @ C"C?C>> @
E,E?C"<< E,;;>";; E,;CD"?9 E,>9D"B9 D,C9?"<D D,<?D"9C"?> ;C;<"C? ;B;D"<< ;==9";? ;EC?"99 ;DDB"9B ;<=9";9 ;BE;"D= ;,C>E" B9 ;,<C9" => D,B<=" C? D,9<9" => E,;?B" C; D,9;9" ?< E,DB>" C9 E,C=?"
? @ C"C?<?E C"C9CDB = @ C"CBB>> C"C?C== ? C"CB<DC ; C"C9C9E B C"CB;=? D C"CCB;9 = C"C9==? > C"CB=D9 B C"CBD>D = C"CB?>C = C"C99;; = C"CC==E E C"CB>E9 ? @ C"C9D9> @ C"C???D @ C"CC;;> C"C?=D9 D @ C"B9C;< C"C9B>; E @ C"C;?=? C"C>D?? @ C"BC??9 @
Page6
20.02.20<< 2F.02.20<< 0F.04.20<< <4.04.20<< 20.04.20<< 2F.04.20<< 04.05.20<< <0.05.20<< <F.05.20<< 25.05.20<< 02.05.20<< 0G.05.20<< <5.05.20<< 22.05.20<< 2=.05.20<< 05.06.20<< <2.06.20<< <=.06.20<< 26.06.20<< return 1ariance 0o1ariance ?eta
B<"?; B?">D B?"= B<"; B<"=D B<"9B B<"; B9"C< B9"C< B<";< B<"D B<"=9 B<"9E B<"E9 B<"<= B<"E; B<"D> B<"=D B<"ED
C"C9DD? @ C"C<==; @ C"C?<<9 @ C"C<E?9 C"BC9 @ C"CBEED @ C"CBBD> C"C?>C; < C"CBEEE D C @ C"CB9?E @C"CC>9 @ C"CBBE; @ C"CC=>B C"CB<<D < @ C"C?B?E C"C?9DB > C"CC;C9 B @ C"CB=>= C"CCD<E > C"CC?;= ? C"CCC=> ? C"CCC9= ? C"?<=<C B
9B E,<;>" E< =,9E<" <= =,DD>" >B E,BD>" =< E,9E>" >B E,C>9" E9 E,99D" CB E,==E" =? E,<9E" >> E,CDE" <? =,>>B" <; =,EBB" 9D =,D;;" B= =,=B?" ?C =,9;>" ;; =,DE?" ;> =,EDE" ?> =,E;E" D? =,;9B" ?E
C"C>>?? C"C==DB E @ C"B99>D C"C=D>9 < C"CE>B< ; C"C9E>> B @C"C=; C"C=D;B E C"CBE>; E @ C"CE @ C"C9?E= @ C"CB<>; @ C"CE<9B C"C<B9; = @ C"C9DED @ C"CC9C= C"C9>D? ; @ C"CB=C< C"CCB;< ; C"C?DBD = C"CCB;C B C"CCB>? ?
Page6
(eig t /0?AM0+ <st /0?/S+AM /0 -?+ !$BS! /F/0 P$/MC"BEEEE D C"BEEEE D C"BEEEE D C"BEEEE D C"BEEEE D C"BEEEE D
al& a C"CB==D > C"CCCB
*eta @ B"B<;DB ; C"C;C=? B C"?EC9D < C"?<;=E > C"?C=C> < @ C"C99=< C
&ortfolio al& a C"CC?=>D C"CCCC?? C"CCC?ED C"CCC9C9 C"CCC?D? C"CCCBD; C"CC<D<>
&ortfoli o *eta @ C"B;>D; E C"CB<9? C C"C9<9B ? C"C<>DE ? C"C<9B; ? @ C"CCD9? ? @ C"CEE9< ?
1ariance of error C"CB; C"CCB?> D C"CCCED < C"CCC9; < C"CCC9? C C"CCB?; ? C"CCC=C > C"CCCC< E C"CCCCB > C"CCCCB < C"CCCCB ? C"CCCC< E C"CCCE? 9
Page6

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Chapter 1 Introduction

Origin of the Report:

Objectives of the Report:

Investing in Financial Market as a Retail Investor through Mutual Funds

Organization of the Report:

Scope of the Report:

Methodology & Sources of ata:

Investing in Financial Market as a Retail Investor through Mutual Funds

!asic "actors to be used:

Investing in Financial Market as a Retail Investor through Mutual Funds

is the total risk of the portfolio"

S ar&e's $e(ard to )aria*ility#

Investing in Financial Market as a Retail Investor through Mutual Funds

Chapter % "inancial Sector in !angladesh %&1 "inancial Syste$ in !angladesh:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&1a Characteristics of "inancial Sector in !angladesh:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&1b Recent develop$ents in the financial sector:

%&% 'he Macro "inancial (nviron$ent:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&* 'he !an+ing Sector:

2.3a Short history of banking:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&*b Interest Rate Spread:

Investing in Financial Market as a Retail Investor through Mutual Funds

Bangladesh India Pa#istan $ri Lan#a

Weighted average Lending rate .0019 12.00-12.50 1"."! 19."1

Deposit Rate 7.17 .00-9.00 5. 5 11.7!

Spread 5.17 !.00-".50 7.!9 7.57

%&, -!"I Industry in !angladesh:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&,a .erfor$ance of -!"Is:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&,b ($ergence of -on)!an+ "inancial Institutions in !angladesh:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&,c Recent evelop$ent and /ctivities of -!"Is:

%&0 Insurance Industry Overvie1:

Investing in Financial Market as a Retail Investor through Mutual Funds

%&2 'he Capital Mar+et:

Investing in Financial Market as a Retail Investor through Mutual Funds

.articipants in the capital $ar+et:

Investing in Financial Market as a Retail Investor through Mutual Funds

Investing in Financial Market as a Retail Investor through Mutual Funds

%otal 2ar#et +apitali8ation o) .3ig&re %#. in 'n0

.3ig&re 9$: in 'n0 "55! 5

2559 5 2! 2 5067 2505555 " !79 "55060 576 65 !2 501511" 9 65!92

4ll Listed 7ovt. %-Bonds 4ll Listed +orporate Bonds

%&2a S( Sectoral .erfor$ance ) May %611:

Ban#s 3inan,ial Instit&tions Ins&ran,e 2&t&al 3&nds %otal

4pril 195!97.5! 1 56 ".95 205775.6"

Investing in Financial Market as a Retail Investor through Mutual Funds

Investing in Financial Market as a Retail Investor through Mutual Funds

%&2b Sectoral .7( ) May %611:

Ban# 3inan,ial Instit&tions 2&t&al 3&nds

%&8 #easing Industry Overvie1:

Aive loans and advances for industry, commerce, a!riculture, or housin!5

Investing in Financial Market as a Retail Investor through Mutual Funds

%&8a Invest$ent .ortfolio Mi4 of -!"Is 5%66%)%6623:

+ease !erm +oans 7ousing +oans 8t er Assets /n1estment 9S ares -:uities;

=E" D B>" 9 B9" < ="> <"D

=;" 9 ??" = B9" B = C

9D" D <?" < B?" = 9"= <

9=" > <9 B<" ? B"E ="<

9=" > <<" E B9 B"D 9"; Page6

,!.+ ,!2. ,!/ ,!/ ,!/ ,!+ ,!** ,!,!+ ,!*.

n>a +! /!) ++! /!)* n>a

++! n>a +2! n>a n>a n>a 0!)*

?/MB-/ )! S@/@?/ #/# !R/C -!

++! /!01? /!/2 n>a

++! /!/,? +2!,/ n>a

+2! +2! 0!2) 1!1)

+2! +2! )!)* n>a

+! .! )!2)

+! .! 0!+*

+! .! 0!+*

+! .! 0!+*

)!2) ++! ? +2! +!2)? ++!**

,! ++! ? +2! +!1)? +2!

0! ++! ? +2! 2!? ++!)*

0! 0! +*! n>a 2!**? /!-) n>a