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The stock market regulator has approved the draft prospectus of an open-end mutual fund named PLI AML 1st Unit Fund -- with an initial target size of Tk 500 million.
The approval came on Wednesday at a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC), presided over by Chairman Prof. Shibli Rubayat Ul Islam, according to a press release.
Of the total target size, the sponsor of the fund -- Popular Life Insurance Company Ltd -- provided Tk 250 million while the remaining Tk 250 million will be collected from general investors by selling its units.
The face value of each unit of the fund is Tk 10.
The PLI Asset Management will act as the asset manager while ICB Capital Management and BRAC Bank are acting as trustee and custodian of the open-end mutual fund.
A mutual fund is a professionally-managed investment scheme usually run by an asset management company that pools money from investors and invests their money in stocks, bonds and other assets. Depending on the profits earned, investors are then paid back in the form of dividends.
An open-end MF having no specific tenure is floated with an initial size which is then expanded over time through the issuance of new units.
Open-ended mutual funds are not listed on the stock market but one can buy units of such funds from a fund managers' office on the basis of its net asset value. Similarly, investors can sell off fund units at any time at prices based on its current net asset value.
There are 36 closed-end mutual funds listed on the Dhaka Stock Exchange and 85 open-end mutual funds in Bangladesh.