Unilever is the most expensive company in the NEPSE. The latest price of the "Unilever" per unit is Rs. 18600.
That means...
We need to buy at least 10 units.
The amount required to purchase ten units is...one lakh and eighty-six thousand rupees.
Likewise, which is the second most expensive company in NEPSE?
- Rastriya Beema Company Ltd.
The latest price of the "Rastriya Beema Company Ltd." per unit is Rs. 14,251.
The amount that we need to purchase this stock is... one lakh forty-two thousand five hundred and ten rupees.
Similarly, which is the third most expensive company in NEPSE?
- Bottlers Nepal Limited.
In order to purchase a unit of this stock, you need to pay... Thirteen thousand nine hundred and ninety.
That means...
In order to buy 10 units of this stock, you need to pay...
One lakh forty thousand. This is the amount required to invest in the top three companies in Nepal.
Does everyone have this capital?
And. If not, is there any opportunity for them to invest in such good and expensive companies?
So. This is problem no. 1.
And. the problem no. 2 is...
If you are aware of the wealth generation process through the stock market, but. you have absolutely no knowledge about the stock market.
you have the capital to invest. but. If you have absolutely no knowledge about the stock market, what is the option available for you?
The alternative for those people is. to get someone to manage their money. This type of professional system is called the "Portfolio Management Service" (PMS).
but again, the problem is... you need to invest at least 3 lakh rupees to. get your PMS. What if you don't have 3 lakh rupees?
But. you still want to invest in the share market. Ordinary people with salaries ranging from 30K to 50K.
Who want to invest 5k to10k monthly in the stock market, or the individual has less than 3 lakh rupees. but still want to invest.
What are the options available for those people?
Let's talk about few data.
Let's talk about few data.
As of now, 53,37,770 Demat accounts are opened in Nepal. We have the data of 26 lakh people who are directly or indirectly applying for an IPO.
That means.
26 lakh people have knowledge of the share market directly or indirectly. Among them, either 12 lakh or 13 lakhs have opened broker accounts.
But. Why are there less transactions?
This may be due to risk, a lack of knowledge, or a time constraint.
These might be the reasons for people not being invested.
There are solutions to all the "problems I have talked about" in the market. To which we call as "Mutual Fund". People are either unaware of it,
or people have no proper knowledge, or interest among people is declining.
But...
Mutual Funds are the best way to enter the secondary market for the first time. So, this article is dedicated to mutual funds.
If we observe developed countries, 46% of the population of the US invests in mutual funds.
Similarly, 13.5% in UK, 11.6% in Germany. but it is extremely negligible in the case of Nepal.
Why is it so?
Do people really think mutual funds are very risky?
Are mutual funds really risky?
Is there no good return in mutual fund investments?
Instead of me, you will answer these questions yourself. Because we will be talking few points. After that, you will find those answers on your own.
So,
When we apply IPO, Nowadays, only 10 units are being allotted through a lottery system. But. If we are allotted the same 10 units,
What is the risk-reward ratio in selling an IPO?
You say it yourself. If any company is going for an IPO,
it must give dedicated 5% for the mutual fund.
So, every mutual fund gets a few percentages.
That means. The mutual fund will receive a substantial amount of the company's IPO first. That's why the mutual funds are first and foremost safety guaranteed.
That is.
The chances of sinking mutual fund investments are low
and the chance of profitability is more. Mutual funds are being managed by fund managers.
and the chance of profitability is more. Mutual funds are being managed by fund managers.
Billions of amounts are being managed. Your funds are being managed by experienced people.
What differences in risk exist between the expert and the beginner management?
We can guarantee complete profitability. But in case of loss, the professionals minimize the loss of your mutual fund investment via diversification.
This professionally managed fund is "mutual funds". To either believe or not in the fund being managed by the experts,
The choice is yours.
Instead of questioning whether to invest in the mutual fund,
we should ask about the best mutual fund to be invested in.
And. how is that determined?
By analyzing the previous data being managed by the manager,
the mutual fund brought by the capital is good because, they managed it well.
They have given a good dividend in a bull or bear market.
Everyone earns in a bull market. They have given a specific return in the bearish market too.
Generally, when the market falls, everyone's portfolio suffers a loss.
The portfolio of people falls more than that of the falling percentage of the market.
But. in case of mutual fund, by comparing the mutual that is being managed well by the capital, then if we invest in the mutual fund of that capital,
we will be making good and wise decision.
Once people decide to buy "MF", they understand to buy either the shares of that "MF" or the stock bought by that "MF".
What is to be bought in the mutual fund?
- Buy mutual funds' units.
Each mutual fund issues units. We buy those units.
And.
In the exchange of those units, our money gets accumulated in mutual funds. And. those accumulated funds are invested by the mutual fund in different companies.
So. mutual funds buy the shares of various companies on our behalf.
Investing in mutual funds is one of the necessities.
If you are only a beginner, in fact, you can start the journey of the secondary market through mutual funds. This is my suggestion to all.
Let's see the data of Mutual Fund.
How did the mutual fund perform when the NEPSE was down?
So. Let's see the data.
How did the different mutual funds perform when the NEPSE was down?
Here is the name of every mutual fund.
How was the NAV at the market peak?
The mutual funds publish the NAV every week and month.
"NAV" changes every day.
It's "Net Asset Value."
It means...
NAV is equal to "Assets - Liabilities" divided by "no. of units."
So.. We have already talked about this.
So.. the thing that we need to observe is ...
when the NEPSE was declining at 35.83%,
Look at the declination of this mutual fund here.
The NIC ASIA mutual fund declined by 1.3%.
Okay!!
The KEF mutual fund declined by 6.38%.
Even with a 35% decline in the market,
the declination rates of the different mutual funds are shown here when the market declines.
That means,
How is this determined?
Some mutual funds enter in the bullish market, some mutual funds enter in the bearish market. So.. if the mutual fund was started at the higher peak of 3000+,
Obviously, its price declines more when the market falls.
But... If not...
If the mutual fund was started before bullish phase, Even if it has increased during the bullish phase, it does not bear further loss.
Overall, the mutual fund has comparatively declined less than the market. It means, Because of the balanced portfolio managed by the professionals in every mutual fund,
it doesn't fall steeply in the bearish market too.
So. this is the declining phase of the market.
And... in the declining phase if any mutual fund arises,
then that mutual fund will get good opportunity to invest
Because more units of the company can be bought at a lower price with huge investments,
And. when the market turns into a bullish market, and if the market begins to rise steadily, Just think of the good return that can be achieved.
That's why,
If we don't know anything about the market, The thing that we do to see the upcoming mutual fund is. We need to browse the website of SEBON.
After browsing the SEBON's website, to see the upcoming mutual funds, Let's see "mutual fund approved" in "mutual fund schemes" from "security issues."
So, in this way we can see the upcoming mutual funds
The last remark that I want to make is
We need to encourage mutual funds too, because Mutual Funds are the big investors in the market. Whenever the market fluctuates, mutual funds also play a very stable role.
Professionally managing funds doesn't allow for more fluctuation in the market.
So, I think Nepal should have more mutual funds too. People should also have trust in mutual funds. Mutual funds have also provided good returns on investment.
So yes... if you belong to the beginner category in the share market,
If you do not understand anything in the share market, or.
If you want your fund to be managed by a good fund manager, I think this is the right time to invest in mutual fund also.
So, through all these investments in mutual funds, SIP,
it helps you to be a wealthy person in time by making the investment safer through diversification.
If you start making your portfolio more like a risk-free, you will start understanding, and won't lose your money either.
And there is the probability of being a good investor and trader as well in the future.
This is the message I have tried to bring through our today's lesson.
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