Mutual Fund sector looks promising

Kathmandu, September 16:

Banking experts from Nepal and India have said today that Nepal holds tremendous potentials in mutual fund industry, which is still at a nascent stage. Speaking at interaction programme on ‘Development of Mutual Fund Industry In Nepal’, D V S S V Prasad, executive director of Everest Bank Ltd said, “Mutual fund is an instrument which explores opportunities for investment for common men.” Prasad said that it would help strengthen the financial market and is one of the most important investment areas.

Experts said that development of mutual fund would help in strengthening capital markets, business houses and institutions, which will give higher returns on investment. Ranjan Dhawan, general manager of Punjab National bank, New Delhi, said that mutual fund is a vehicle for pooling money together. He mentioned that the development of mutual fund industry across the global markets is picking up pace. Another expert, Ashok Bhargav, senior manager of Principal Mutual, a part of the Principal Financial Group, said that Nepal needed to develop the mutual fund industry which will ultimately boost the capital market and open the doors for long term saving avenues. Bhargav stressed on the need to develop this sector for encouraging long-term savings.

Banking experts mentioned that mutual fund is simply a financial intermediary that allows a group of investors to pool in their money together with predetermined investment objectives. Mutual funds are one of the best investments ever created because they are very cost-efficient and very easy to invest in. Investors can purchase stocks or bonds at a much lower trading cost by pooling money together in a mutual fund.

The benefits of mutual fund industry are that it provides an option to systematically start planning for one’s retired life and secure a sound financial return in future; gives attractive short term, medium term and long term investment options; gives benefits of free markets to competition that would lead to lower costs to improve overall returns and transparency in operations.

The organiser of the programme, Everest Bank Ltd, also informed that with the view to provide alternative avenues of investments for the benefit of investors and for alternative source of raising funds for the benefit of the corporate, Everest Bank Ltd, Punjab National Bank and the Principal Financial Group aim to work closely with the regulatory authority to help develop a framework for introducing strong long term social security in Nepal.