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ICB Mutual Fund

Introduction

It is a recognized principle that diversification of investment reduces risk. An individual may not have the time, expertise and resources to undertake such diversification. Here arises the advantage of a Mutual Fund. Mutual Funds pool the savings of a great number of investors and make investments in a wide array of securities. In Bangladesh ICB has pioneered Mutual Funds for the sake of investors and of the capital market.

ICB Mutual Funds

Mutual Funds are also known as close ended Mutual Funds. The issued capital of a Mutual Fund is limited, that is, a Mutual Fund offers a limited number of certificates for sale to the public. The amount of capital and the number of certificates of each Mutual Fund remains unchanged. ICB Mutual Funds are independent of one another. A Mutual Fund being listed is traded on the Stock Exchanges. Price of Mutual Fund certificates after IPO is determined on the Stock Exchanges through interaction of supply and demand. The market price of a Mutual Fund certificates is available in Stock exchange quotations and in newspapers.

How to Buy existing Mutual Funds

An investor can purchase any of the existing eight ICB Mutual Funds certificates through the Stock Exchanges at the prevailing Market Price. However, if an investor buys Mutual Fund certificates through the Stock Exchanges he/she must be careful to submit the certificates along with duly filled-in transfer deed at ICB Head Office to ensure that the certificates are registered in his/her name.

Management of the Funds

The Mutual Funds are managed by ICB as fund manager for which receives commission @1% .

Assets of ICB Mutual Funds

ICB Mutual Funds Certificates holders shall have unfettered ownership in the assets of the Fund to which they are related. In case of winding up of the Corporation the assets belonging to any ICB Mutual Fund shall not be treated as the assets of the Corporation.

Management Fee, Charge etc.

At present management fee @ 1% on the paid up capital of the Fund is charged annually. No amount is charged on account of custodial and trust services. Part of operating expenses are charged to the respective Mutual Funds on pro rata basis.

Declaration of Dividend

The net income received on investments of Funds on account of dividend, bonus, interest, capital gain etc. are distributed amongst the Certificate Holders as per decision of the Board of Directors of ICB. Board declares such income in the form of dividend at the end of July each year. Dividends declared by ICB in the past on the Mutual Funds were very attractive. The year-wise per certificate dividend performance of the Funds is given below.

Rate of the Dividend per Certificate (Taka)

FY

ICB Mutual Funds

1 st

2 nd

3 rd

4 th

5 th

6 th

7 th

8 th

1980-1981

20

 

 

 

 

 

 

 

1981-1982

20

 

 

 

 

 

 

 

1982-1983

20

 

 

 

 

 

 

 

1983-1984

25

 

 

 

 

 

 

 

1984-1985

35

21

 

 

 

 

 

 

1985-1986

38

23

21

 

 

 

 

 

1986-1987

41

25.5

22.5

21.5

 

 

 

 

1987-1988

48

28

25.5

23

 

 

 

 

1988-1989

49

29

26

23.5

20.5

15.5

 

 

1989-1990

49

29

26

23.5

20.5

13.25

 

 

1990-1991

35

22

19

17

10

6

 

 

1991-1992

31

22

19

18

11

6

 

 

1992-1993

31.5

21

18

17

12

-

 

 

1993-1994

45

27

22

40

25

16

 

 

1994-1995

50

40

27

41

28

18

 

 

1995-1996

60

42

28

41

30

20

18

 

1996-1997

70

45

38

45

35

24

21

18

1997-1998

70

30

35

32

22

18

14

12

1998-1999

100

32

38

35

20

15

13

12

1999-2000

125

35

40

36

21

16

13.5

12.5

2000-2001

170

40

45

38

23

17

14

13

2001-2002

175

42

50

40

24

17.50

14.50

13.50

2002-2003

180

45

50

40

24

17.50

14.50

13.50

2003-2004

200

50

50

45

24

17.50

15

14

2004-2005

210

55

52

48

27

18.50

16

15

2005-2006

210

55

52

48

27

18.50

16

15

2006-2007

190(1B:2,240)

62

56

52

33

23

22.50

18

2007-2008

265

75

65

60

45

30

30

25

2008-2009

310

95

85

80

56

37

35

32

2009-2010

400

200

140

125

100

75

70

65

2010-2011

500

250

185

165

135

90

95

90

2011-2012

600

300

200

185

170

100

110

100

2012-2013

700

375

240

240

200

105

120

110

Tax Concessions

(a) Investment in Certificates provides the same tax exemptions as an investment qualifying under Section 44 of the Income Tax Ordinance, 1984.

(b) Capital gains received on investment in the Fund Certificates shall not be included in the total income of a Certificate holder within the limits specified in the Income Tax Ordinance, 1984.

(c) Dividends received on investment in the Fund will be treated as dividend income under Income Tax Act, and will be exempted from tax with the limits specified in the Act.

(d) The Fund incomes are to be exempted from all taxes as granted by the Government as per SRO No 80-L/80 dated April, 1980.

 



 
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