Mutual funds fare better amid market surge

Mostafizur Rahman | Published: 00:05, Nov 11,2017


Most of the mutual funds listed with the country’s capital market have declared higher dividends for the year ended on June 30, 2017 compared with what they gave in the previous year and cash dividend got preference in declaring dividend in the wake of widespread criticisms of declaration of only re-investment units (stock dividend) by the funds.
Of the 30 funds that announced dividends so far for the year 2017, 19 of them declared higher dividends, seven maintained their last year’s rates and four declared less dividends. 
Of them, 17 announced dividends at the rate of 10 per cent or more and the rest 13 declared dividends at the rate of less than 10 per cent for the year 2017.
Of the 35 listed mutual funds, five did not declare dividend recently as they maintain different accounting year.
Asset & Investment Management Services managing director Yawer Sayeed told New Age that mutual funds provided better dividends this year due mainly to an upward movement of the stock prices from January this year.
The mutual funds that could not gain profit during the bullish period at the market and declared no dividend for more than two years need to be monitored by the stock market regulator, he said.
He also said that widespread criticisms of declaration of only re-investment units as dividend were another reason for the increase in the number of cash-dividend declaring mutual funds this year.
The declaration of cash dividend increased as all the mutual funds declared cash dividends while 10 mutual funds under RACE Asset Management Company declared re-investment units along with cash dividends.
The number of only RIU issuing MFs was 12 in the previous year.
CAPM BDBL Mutual fund 01, which was listed with the Dhaka and Chittagong bourses in January this year, declared dividend for the first time after its listing.
Market operators said that as the market started to move upward from November, 2016 and the bullishness got strength with the time amid several record-breaking sessions, the mutual funds made better profits this year compared with what they made in last year.
The prices of the units of mutual funds also increased to the edge of their issue prices recently while those were traded far below their issue prices before December, 2016.
All the mutual funds under RACE Asset Management Company declared higher dividends.
A number of mutual funds under ICB Asset Management Company maintained the same dividend rates they gave last year.
ICB 2nd NRB, ICB AMCL 2nd and ICB Employees Provident mutual funds declared higher dividends while the rests maintained the last year’s rates.
Green Delta Mutual Fund and DBH First Mutual Fund under LR Global Bangladesh Management and Reliance One under Asset & Investment Management Services declared dividends at the same rates they gave in the previous year.
Of the 30 mutual funds, Asian Tiger Sandhani Life Growth Fund Two announced the highest dividend among the funds for its investors. The trustee of the MF announced 15.50 per cent cash dividend for the year ended on June 30, 2017 against 13 per cent cash dividend given in the previous year.
Grameen One: Scheme Two and Southeast Bank 1st Mutual Fund issued second and third highest dividends for the year as the funds announced 14 per cent dividend (11 per cent cash and 4 per cent re-investment unit) and 13.5 per cent cash dividend respectively.
Better dividend announcements also helped the mutual funds see a rise in their unit prices as cash dividends pulled investments to the funds. 

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