Kathmandu. In Nepal’s mutual fund market, funds operated by Prabhu Capital have attracted the attention of investors by maintaining high net asset value (NAV). The NAV of Prabhu Smart Fund, Prabhu Select Fund and Prabhu Systematic Investment Scheme (SIS) is higher than most mutual funds operating in the market.

Currently, the NAV of Prabhu Smart Fund is Rs 14.03, that of Prabhu Select Fund is Rs 13.04 and that of Prabhu Systematic Investment Scheme is Rs 10.75. However, in the last financial year, due to market fluctuations and fixed profit for dividend distribution, NAV has fallen a bit, according to Saugat Pant, head of research and mutual funds at Prabhu Capital.

There are two mutual funds with more than 12 percent NAV during this period. There are seven mutual fund companies with a NAV of more than 11 percent while the rest of the mutual funds have a NAV of more than 10 percent and less than 11 percent.

According to Panta, mutual fund is an arrangement to commercially invest the money collected from many investors in various financial instruments like shares, bonds, treasury bills, fixed deposits and so on. Since all the investment decisions of the fund are made by experienced fund managers, investors who do not have enough knowledge or time of the market can easily participate in the capital market.

According to him, when investing directly by selecting shares, one should analyze the company, evaluate the market condition and risks. However, in mutual funds, the risk is automatically diversified as the purchase of the same unit involves investing in different companies and financial instruments at the same time. This will increase the chances of investors getting relatively safe returns, Pant said.

Currently, banks, merchant banks and capital companies are operating both closed-end and open-end mutual funds in Nepal. In recent years, with the expansion of institutional investment, the scope of mutual funds has also increased.

Net asset value (NAV) is the key basis for valuing a mutual fund. Because the per-unit value is calculated by subtracting liabilities from the total assets held by the fund, NAV will provide information on the fund’s asset value and financial position, according to Punt.