IDLC Finance Ltd has announced an index-based open-ended unit fund, the first of its kind in Bangladesh's capital market.
The company's board of directors took the decision at a meeting on Thursday.
An open-ended unit fund is a professionally managed collective investment scheme that has unlimited lifetime and size.
The fund -- IDLC-50 Unit Fund -- with an initial size of Tk 25 crore, will track and invest in securities that are tagged with an independent stock index styled IDLC-50.
The index, also created by IDLC, shows the daily performance of the 50 big cap companies with the Dhaka and Chittagong stock exchanges.
"Usually, closed-end mutual funds and open-ended unit funds can invest on any scrip. But the IDLC-50 unit fund will proportionately invest in the 50 securities that are marked in the IDLC-50 index," said Arif Khan, deputy managing director of the financial institution.
"IDLC always wants to introduce new products in the country's financial market," he said, adding that the new product will increase the brand image of IDLC, also a listed company.
IDLC will subscribe to units worth Tk 5 crore as a sponsor, while the remaining units worth Tk 20 crore will be sold to individual investors and institutions.
Alif Assets Management will be the fund's manager, subject to approval of the regulator.

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