Mutual fund in Bangladesh

Abstract

The mutual fund industry in Bangladesh was thrown open to the private sector in 1999. Since then the AMCs with mutual funds has grown in excess of Tk. 3500 core with over 80% of the fund being managed by private sector AMCs. To protect the interest of the investors, SEC prescribed a structure to be followed by the financial institutions and mutual funds alike. The structure depends upon independent directors and statutory auditors. In order to safeguard investors’ money in the current unstable situation of Bangladesh stock market, corporate governance guidelines have been institutionalized. This report attempts to critically review the requirements of mutual fund regulations in Bangladesh and their implementation by the various AMCs. Mutual Fund is a Capital Market Investment Vehicle. In Bangladesh there are 48 Mutual Funds under 17 Asset Management Companies. However, most of the mutual funds are diversified and have reduced its unique risk. The growth oriented funds have performed better in terms of total risk and the funds are offering advantages of diversification and professionalism to the investors. So, mutual funds perform better with their expertise. Keywords: Mutual Fund, Asset Management Company, Corporate Governance, Merchant Banks