Southeast Bank 1st Mutual Fund gets BSEC nod for conversion into open-end
Open-ended funds cannot be listed and their units cannot be traded between investors. Unit holders instead buy units from the asset managers concerned or their authorised agents
After the completion of its 10-year tenure, Southeast Bank 1st Mutual Fund has now got the nod from the securities regulator for conversion into open-end form, as the unit holders have decided to run the fund instead of its liquidation.
The close-end fund completed its 10-year tenure on 15 May this year.
More than 99% unit holders voted in favour of the conversion proposal of the fund at a virtual meeting held on 25 May.
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In this context, the Bangladesh Securities and Exchange Commission (BSEC) on 30 June approved the conversion of Southeast Bank 1st Mutual Fund from a closed-end into open-end.
VIPB Asset Management is the manager of the fund while the Investment Corporation of Bangladesh (ICB) is acting as the custodian and the trustee.
This is the first instance that an asset manager voluntarily has preferred conversion despite the opportunity to extend the fund's tenure for another 10-year term.
Open-ended funds cannot be listed and their units cannot be traded between investors. Unit holders instead buy units from the asset managers concerned or their authorised agents.
Investors can also surrender the fund units to the asset manager and get refunds of their money based on the units' current net asset value.
The fund was listed on the stock exchanges on 16 May 2011 with an initial size of Tk90.7 crore. The fund has so far paid cash dividends amounting to Tk88.8 crore.
As of 31 March this year, its investment portfolio in the stock market was Tk105.18 crore as on market value. Out of the total investment, above 50% was made in only five companies – Brac Bank, Square Pharma, Singer, Grameenphone, and Marico.
At the end of the first three quarters of the 2020-21 fiscal year, the fund's total asset at the market value of the investment portfolio was Tk133 crore and the shareholders' equity was Tk132 crore.
Out of the total units of the fund, 27.56% are held by sponsors and directors, while institutional investors and general investors own 57.93% and 14.51%, respectively.
