BSEC advises investing in mutual funds considering asset value

In a press release on Monday, BSEC said that recently units of some mutual funds are being traded at abnormally high prices compared to the net asset value per unit of the respective fund. If there is a large gap between market price and underlying asset value, investors need to be especially cautious.

According to DSE data, five mutual funds are currently trading at prices higher than their asset value. Among them, units of First Prime Mutual Fund are trading at a price nearly 250 percent higher. Although the asset value per unit is about Tk 9, the market price is more than Tk 31.

In addition, Prime Finance Mutual Fund and CAPMIBBL Mutual Fund are trading at nearly 100 percent higher than asset value, Reliance-1 at more than 20 percent higher, and ICB Employees Second Mutual Fund at more than 5 percent higher.

BSEC said that before investing, decisions must be made by verifying the fund's actual net asset value, financial condition, term, type of investment or portfolio, and other published information.

It said that in mutual funds, investors' money is pooled and invested in various financial instruments and assets. The net asset value of the fund is obtained after deducting liabilities from the market value of these assets. The net asset value per unit is determined by dividing the total net asset value by the number of units.