Report on ICB Mutual Fund Deparment
Subject: Finance | Topics:

FUNCTIONS OF ICB MUTUAL FUNDS DEPARTMENT:

Mutual portfolio formation and floating decision taken by ICB with the approval of the management EBR department decides holding category considering capital, portfolio risk, income trend, and risk diversified uniform income and growth. After all these decision security to be held are collected from IPO, Debenture issue, Secondary market etc. ICB helps sometime giving security at discount rate or at face value. Then the Fund is registered with SEC and listed with DSE and CSE. However after public issue, the fund portfolio is handed over to funds division for management operation. For purpose the Mutual Fund department has to perform the following activities mainly:

  • Renunciation and issue of certificate.
  • Maintain the register of the certificate holders.
  • Transfer certificate if applied for after verifying transferee signature.
  • Register the name of the transferee after getting approval from competent authority.
  • Prepare dividend list and issue and mail dividend warrant as decided by the board.
  • Record/ correct changes of address if applied.
  • Reissue certificate after confirming loss and mark transfer restriction of the lost certificate, if applied for and also inform DSE & CSE on revision of the following document submitted by the loser.

REGULATORY SET-UP OF ICB’S MUTUAL FUNDS:

When ICB took the initiative of floating mutual fund in Bangladesh, there was no organized and recognized regulatory set-up for managing of mutual funds in Bangladesh. ICB had to formulate the necessary regulatory set-up and rules for the management of mutual funds. The regulatory set-up for ICB mutual funds is explicitly explained in the ICB Regulation-1977. The main features of this regulatory set-up are mentioned below:

  • The Corporation may from constitute of ICB mutual funds of such denominations and securities in such each case as the board may determine.
  • ICB mutual fund certificates will be listed and quoted in the stock exchange in Bangladesh and the board may determine subject to the permission of the stock exchange.
  • ICB mutual funds certificate shall be movable property and freely transferable.
  • ICB Mutual Fund certificate will be sold or offered for subscription with the prior consent of the government.

MANAGEMENT OF THE FUNDS:

There is a decision making board in order to manage different Mutual Funds. As per board’s decision securities are bought under different Mutual Funds. At the same way securities are sold. In case of new Mutual Fund subscribes for public issue.

ICB authority is made portfolio earlier by its own finance and given it name. After that it is published on any newspaper as prospectus. By studying this prospectus public response whether they will buy the Mutual Fund or not.

FLOATATION OF NEW MUTUAL FUNDS:

When ICB floats a new mutual fund, it is announced through publication of prospectus in two widely circulated newspapers. An investor has to apply for the shares of new mutual fund by filling in prescribed application form that can be collected from ICB officers and other attorney banks. Sometimes allotment is done by lottery draw.10% of any new mutual fund is served for non-Bangladeshi. Any Bangladeshi living abroad can collect from Bangladesh mission abroad or from authorized bank branches or from web site.

 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.

ADVANCES AGAINST MUTUAL FUND CERTIFICATES SCHEME:

Advance against ICB Mutual Fund certificates Scheme was introduced in 2003, designed for the ICB Mutual Fund Certificate holders to meet their emergency fund requirement. One can borrow maximum of 50% value of last one year’s weighted average market price of certificates at time of borrowing by depositing his/her certificates under lien arrangement from any of the ICB offices. The rate of interest on the loan is reasonable and also competitive.

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

 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.

TAX CONCESSIONS:

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

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)

 Year                                   Eight Mutual Funds
1 st 2 nd 3 rd 4 th 5 th 6 th 7 th 8 th
1980-8120
1981-8220
1982-8320
1983-8425
1984-853521
1985-86382321
1986-874125.522.521.5
1987-88482825.52320
1988-8949292623.520.515.5
1989-904929262320.513.25
1990-9135221917106
1991-9231221918116
1992-933121181712
1993-94452722402516
1994-95504027412818
1995-9660422841302018
1996-977045384535242118
1997-987030353222181412
1998-9910032383520151312
1999-2000125354036211613.512.5
2000-200117040453823171413
2001-20021754250402417.5014.5013.50
2002-20031804550402417.5014.5013.50
2003-20042005050452417.501514
2004-20052105552482718.501615
2005-20062105552482718.501615
2006-2007190625652332322.5018
2007-200826575656045303025
2008-200931095858056373532
2009-2010400200140125100757065

Dividend Performance:                                                              (Tk. per Certificate)

Mutual Funds

Financial Year

2007-08

2008-09

2009-10

First ICB mutual fund

265.00

310.00

400.00

Second ICB mutual fund

75.00

95.00

200.00

Third ICB mutual fund

65.00

85.00

140.00

Fourth ICB mutual fund

60.00

80.00

125.00

Fifth ICB mutual fund

45.00

56.00

100.00

Sixth ICB mutual fund

30.00

37.00

75.00

Seventh ICB mutual fund

30.00

32.00

70.00

Eighth ICB mutual fund

25.00

32.00

65.00

Dividend Performance

Here we see that, all Mutual Funds’ in every year increases the dividend. It is a good sign for a company and may be growth day by day. It’s very important things for investors. Sometimes it shows the future growth, and the investors are confident on the fund. In every year 1st ICB Mutual Fund declared the maximum dividend for the share holders.

 DETAILS DESCRIPTION OF ICB’S EIGHT MUTUAL FUND:

First ICB Mutual Fund:

The 1st ICB Mutual Fund was floated at 25th April, 1980. It is the most attractive mutual fund among the others.

Dividend and Interest income:

The Fund had earned dividend of Tk. 85.70 lac from 47 securities during 2009-2010 of which a sum of Tk. 74.69 lac (87.15 percent) was received in cash within 30June 2010.

Capital Gains on Sale of Investments:

During 2009-10, the Fund earned Tk. 375.65 lac as capital gains by securities of 78 companies as shown in the following table:

Sl. NoName of the company No. of Securities soldCapital gain(taka)
1Bangladesh Finance & Inv. Co. Ltd.

1650

1101475.18

2Bangladesh Industrial Fin. Co. Ltd.

100

67413.22

3Bay Leasing & Investment Ltd.

200

266800.00

4Delta Brac Housing Fin. Cor. Ltd.

400

683987.48

5Fidelity Assets & Securities Co. Ltd.

1400

298376.93

6First Leasing International Ltd.

100

118762.63

7IPDC

400

68357.24

8IDLC

700

775449.99

9ILFSL

200

230701.88

10National Housing Fin & Investment Ltd

200

198600.00

11PLFSL

1200

413874.98

12Phoenix Fin. & Inv. Ltd.

1950

697621.39

13Premier Leasing & Fin. Ltd.

1700

356453.44

14Union Capital Ld

4000

505879.20

15United Leasing Co. Ltd

480

534669.63

16Al-Arafah Islami Bank Ltd

1500

192477.40

17Bank Asia Ltd

100

43174.41

18Brac Bank Ltd

500

284379.37

19Dhaka Bank Ltd

400

177954.68

20EXIM Bank Ltd

1800

322914.64

21Mercantile Bank Ltd

800

139668.34

22Mutual Trust Bank Ltd

2300

579263.10

23One Bank Ltd

50

22821.58

24Premier Bank Ltd

3400

995594.33

25Shahjalal Islami Bank Ltd

1400

407949.43

26Social Islami Bank Ltd

300

87963.37

27Southeast Bank Ltd

1600

308880.64

28Standard Bank Ltd

300

48704.82

29First Security Islami Bank Ltd

2600

286869.94

30EBL First MF

56000

1029550.00

31Grameen One: Scheme Two

2000

87100.00

32Trust Bank Ltd

500

182614.70

33ICB AMCL Second MF

150

25000.00

34ICB AMCL Second NRB MF

200

23600.00

35Prime Bank First ICB AMCL MF

2500

36250.00

36Prime Finance First MF

1000

34000.00

37Trust Bank First MF

5000

85500.00

38BSRM Steel Ltd

1500

1149037.50

39Golden Son Ltd

7000

324150.00

40Apex Foods Ltd

945

874937.49

41BATBC

500

167902.45

42Rahima Food

3500

402436.25

43BOC

1700

573786.59

44DESCO

400

314453.88

45Jamuna Oil

17100

3093632.74

46Meghna Petroleum

7500

867665.56

47Padma Oil

200

304900.00

48Power Grid

200

114209.86

49Titas Gas

100

50524.10

50AlltexInd.

1150

72253.38

51Makson Spinning

1000

88458.80

52Metro Spinning

3500

236232.40

53Monno Fabrics

2000

50231.70

54Prime Textile Spinning Mills

3500

742123.75

55RN Spinning

300

125800.00

56The Dhaka Dyeing

14000

675500.00

57Beximco Pharma

1200

200646.32

58Glaxo Smithkline BD

4800

3270620.00

59Imam Button

350

201512.50

60Marico BD

3400

767300.00

61Reckitt Benckiser

2700

3176476.37

62Square Pharma

100

89323.65

63Lafarge Surma Cement

1000

69019.90

64Bangladesh Online

1000

103254.30

65RAK Ceramics BD

400

68300.00

66Shinepukur Ceramics

600

8479.98

67Agrani Insurance

2800

265021.44

68Aisa Insurance

1000

393400.00

69Asia Pacific General Insurance

1200

427146.00

70Continental Insurance

1200

368995.72

71Dhaka Insurance

150

127600.00

72Green Delta Insurance

100

35900.00

73Islami Insurance Bd

350

138600.00

74Mercantile Insurance

100

22712.50

75Nitol Insurance

450

108985.72

76Provati Insurance

150

77450.00

77Rupali Life Insurance

250

378962.50

78Grameen Phone

19400

3274820.00

79Bangladesh Shipping Corporation

400

2141750.00

                                Total

37565167.38

Here we see that, the maximum capital gain came from the company of Grameen Phone Ltd. Total no. of securities 19400 and the amount is Tk. 3,274,820.00

Income, Expenses and Distributable Income:

ParticularsTaka(Lac)Taka(Lac)
Dividend  IncomeInterest  income on Bank depositsCapital gain & other income

Gross Income……

                                                Total expense……

(commission and brokerage, printing and stationery, postage, Bank charges, provision against investments and others)

                              Net income…………

Previous year’s undistributed income

Net distributable income

Distributable income per certificate

85.707.99375.65

 

 

   

469.34

(423.33)

46.01331.57
754.901006.53

Dividend:

The Fund declared dividend at the rate of 400 percent per certificate including 310 percent for the previous year. After making provision of Tk. 300 lac for payment of dividend the Fund had an undistributed income of Tk 454.90 lac. The Year –wise dividend performance of the Fund is shown in the following table:

Year –wise dividend Performance

Financial YearDividend Per CertificateFinancial YearDividend Per Certificate
1980-81201995-9655
1981-82201996-9760
1982-83201995-9660
1983-84251996-9770
1984-85351997-9870
1985-86381998-99100
1986-87411999-00125
1987-88482000-01170
1988-89492001-02175
1989-90492002-03180
1990-91352003-04200
1991-92312004-05210
1992-93312005-06210
1993-94452006-07190 (1B:2)
1994-95502007-08265
2008-09310
2009-10400

Portfolio:

During 2009-10, the fund made investments of Tk. 168.43 lac in securities of 24 companies. As on 30 June 2010 the Fund had securities of 122 companies in its portfolio with a total cost of Tk. 887.70 lac, the market value of which was Tk. 7791.87 lac. Details of the portfolio of the Fund as on 30 June 2009 were Tk. 770,047,230.70

The ex-dividend net asset value per certificate of Tk. 100.00 each of First Mutual Fund stood at Tk. 9877.68 as on 30 June 2010.

The opening and closing market price per certificate of First ICB Mutual Fund of Tk. 100.00 each of the fund was Tk.5783.00 and Tk. 8701.00 as respectively in 2009-10.

The number of certificate holders of the fund was 1105 as on 30 June 2010.

  Second ICB Mutual Fund:

The 2nd ICB Mutual Fund was floated at 17 June 1984.

Dividend and Interest income:

The Fund had earned an amount of Tk. 29.67 lac as dividend and interest from 44 securities during 2009-2010 of which, Tk. 26.81 lac (90.50 percent) was received in cash within 30June 2010.

Capital Gains on Sale of Investments:

During 2009-10, the Fund earned Tk. 247.65 lac as capital gains by securities of 79 companies and total capital gain is Tk. 24,765,105.64.

Here, the maximum capital gain came from the company of Grameen Phone Ltd. Total no. of securities 14600 and the amount is Tk. 2,494,140.00

Income, Expenses and Distributable Income:

ParticularsTaka(Lac)Taka(Lac)
Dividend  IncomeInterest  income on Bank depositsCapital gains  & Other income

Gross Income………

                                                Total expense………

(commission and brokerage, printing and stationery, postage, Bank charges, provision against investments and others)

                                          Net income…………

 

Previous year’s undistributed income

Net distributable income

Distributable income per certificate

29.675.21247.65

 

   

282.56

(155.10)

 127.43 

132.46

259.89519.78

Dividend:

The Fund declared dividend at the rate of Tk. 200 per certificate of Tk. 100.00 each for the year 2009-10, which was Tk. 95.00 per certificate in the previous year. After making provision of Tk. 100.00 lac for payment of dividend the Fund had an undistributed income of Tk. 159.89 lac .The Year –wise dividend performance of the Fund is shown in the following table

Year –wise dividend Performance

Financial YearDividend Per CertificateFinancial YearDividend Per Certificate
1984-85211997-9830
1985-86231998-9932
1986-87251999-200035
1987-88282000-0140
1988-89292001-0242
1989-90292002-0345
1990-91222003-0450
1991-92222004-0555
1992-93212005-0655
1993-94272006-0762
1994-95402007-0875
1995-96422008-0995
1996-97452009-10200

Portfolio:

During 2009-10, the fund made investments of Tk. 119.06 lac in securities of 24 companies. As on 30 June 2010 the Fund had securities of 120 companies in its portfolio with a total cost of Tk. 612.98 lac, the market value of which was Tk. 1782.44 lac. Details of the portfolio of the Fund as on 30 June 2010 were Tk. 174510768.45

The ex-dividend net asset value per certificate of Tk. 100.00 each of First Mutual Fund stood at Tk. 2788.41 as on 30 June 2010.

The opening and closing market price per certificate of First ICB Mutual Fund of Tk. 100.00 each of the fund was Tk.2244.75 and Tk. 2578.75 as respectively in 2009-10.

The number of certificate holders of the fund was 1093 as on 30 June 2010.

Third ICB Mutual Fund:

The 3rd ICB Mutual Fund was floated at 19 May 1985.

Dividend and Interest income:

The Fund had earned dividend of Tk. 36.41 lac from 53 securities during 2009-2010 of which a sum of Tk. 32.46 lac (89.15 percent) was received in cash within 30June 2010.

Capital Gains on Sale of Investments:

During 2009-10, the Fund earned Tk. 261.02 lac as capital gains by securities of 76 companies and total capital gain is Tk. 26,102,001.85

Here, the maximum capital gain came from the company of Jamuna Oil Co. Ltd. Total no. of securities 15800 and the amount is Tk. 2,544,718.3

Income, Expenses and Distributable Income:

ParticularsTaka (Lac)Taka (Lac)
Dividend  IncomeInterest  income on Bank depositsCapital gains

Gross Income……..

                                               Total expense……..

(commission and brokera9ge, printing and stationery, postage, Bank charges, provision against investments and others)

                                               Net income………

 

Previous year’s undistributed income

Net distributable income

Distributable income per certificate

36.415.38261.02   

302.81

(118.43)

184.38192.51
376.89376.89

Dividend:

The Fund declared dividend at the rate of Tk. 114.00 per certificate of Tk. 100.00 each for the year 2009-10, which was Tk. 85.00 per certificate in the previous year. After making provision of Tk 140.00 lac for payment of dividend the Fund had an undistributed income of Tk. 236.89 .The Year –wise dividend performance of the Fund is shown in the following table

Year –wise dividend Performance

Financial YearDividend Per CertificateFinancial YearDividend Per Certificate
1985-86211997-9835
1986-8722.501998-9938

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