Star Business Report

Mutual fund is an underrated sector as it gets very little publicity despite offering higher dividends, according to various experts.

“The mutual fund industry in Bangladesh is currently worth about Tk 15,000 crore, which is insignificant compared to the country’s gross domestic product and overall stock market value,” said Prof Shibli Rubayat Ul Islam, chairman of Bangladesh Securities and Exchange Commission (BSEC).

These comments came during a webinar on the “Institutional role in sustainable financing”, organised by the Association of Asset Management Companies and Mutual Funds (AAMCMF) as a part of World Investor Week-2021.

Mutual funds pool money from investors to channel it into securities such as stocks, bonds, and other assets. Depending on the profits earned, investors are paid a share as dividends.

Mutual funds in Bangladesh have been unable to reach their full potential as many people do not know about the high-performing sector due to a lack of publicity by local asset management companies, Islam said.

However, the BSEC chairman went on to say that they are pleased by the industry’s recent performance, which resulted in fund managers providing better dividends for fiscal 2020-21.

People are looking for options to invest in as bank deposit rates are mostly lower than the country’s inflation rate.

“But many people don’t know about the mutual fund sector, which provided good dividends this year. The main problem is a lack of publicity of the industry’s performance,” he said.

If fund managers cannot bear the cost of publicity measures, then the association could help in this regard.