Dhaka:The Bangladesh Securities and Exchange Commission (BSEC) has advised investors to carefully evaluate the latest disclosed Net Asset Value (NAV) per unit of a mutual fund before deciding to invest in its units.
According to Bangladesh Sangbad Sangstha, the BSEC emphasized that a mutual fund is a structured and regulated investment vehicle designed to pool investors' money for investment in various financial instruments and assets. The total value of these investments is determined by their market value, and after deducting liabilities, the remaining amount constitutes the fund's NAV.
The commission explained that the NAV per unit is calculated by dividing the fund's total NAV by the number of units. Asset managers regularly disclose the NAV and other relevant information of mutual funds in compliance with applicable regulations.
The BSEC noted that some mutual funds' units might trade at prices exceeding their NAV per unit. They warned that investors should be cautious if there is a significant and abnormal discrepancy between a unit's market price and its NAV.
In the event of a fund's encashment or liquidation, unit holders would not receive more than the fund's NAV. Therefore, the BSEC advised investors to verify the latest disclosed NAV and other pertinent information before investing.
The commission also cautioned against basing investment decisions solely on a unit's price rise, rumors, social media information, or inducements. Instead, it recommended that investors make informed decisions by considering the fund's actual asset value, financial condition, tenure, investment pattern, and disclosed information.
Investors were urged to thoroughly understand all relevant information before investing in mutual funds.