Southeast Bank 1st Mutual Fund to be open-ended

The trustee committee of the Southeast Bank 1st Mutual Fund has decided to convert the listed closed-end fund into an open-ended one.

To materialise the plan, the committee has approved the modality of conversion of the fund as per a directive of the Bangladesh Securities and Exchange Commission dated July 8, 2015.

The Dhaka Stock Exchange shared this info in its website on Monday.

Mutual funds are investment tools that gather a fixed pool of money from many investors and re-invest them into stocks, bonds and other assets.

Closed-end mutual funds have tenure of 10 years when investors cannot get back funds from the fund manager but the open-ended ones are allowed to be liquidated anytime.

The fund will complete its 10-year tenure on May 15 this year, its trade at the stock exchanges will be suspended on May 16 and a unitholders' meeting will be held on May 25.

The conversion will take place only if at least 75 per cent unitholders present at the meeting approve the conversion proposal. Otherwise, the fund will be liquidated.

If converted, the investors will have options to remain invested in the fund or exit from it, said Shahidul Islam, CEO of VIPB Asset Management Company Limited, manager of the fund.

"The fund has had an extraordinary performance track record so we believe that if converted into an open-ended fund, many existing investors will keep their money invested in the fund and it will attract many new," he added.

The fund was listed with the stock exchanges on May 16 in 2011 with an initial size of Tk 90.7 crore.

The fund has paid cash dividend amounting to Tk 88.8 crore. Currently, the fund's size in terms of total net asset value at market value is Tk 137 crore.

Yesterday, the fund was traded at Tk 12.50.