The money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager. It is a trust that collects money from a number of investors who share a common investment objective. Then, it invests the money in equities, bonds, money market instruments and/or other securities. Each investor owns units, which represent a portion of the holdings of the fund. The income/gains generated from this collective investment is distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s Net Asset Value or NAV.

• Open-end – A type of mutual fund that does not have a maturity period so investors can buy and sell units through the asset manager on a continuous basis. There are also no restrictions on the amount of shares the fund can issue.
• Close-end – A type of mutual fund that has a fixed maturity period and issues a fixed number of shares during a certain period at the time of launch. Investors can invest in the fund at the time of the IPO and thereafter, they can only buy and sell units in the capital market.

Access to professional asset managers – Investors’ money is managed by experienced and knowledgeable asset managers using fundamental and technical analysis.

Diversification – Diversification allows investors to invest in a number of companies across a wide range of industries and sectors, which in turn minimizes risks. Individual investors with a small surplus can diversify their funds only through mutual funds, which would not have been possible otherwise.

Liquidity – For open-ended funds, investors can buy and sell units on a continuous basis so they can liquidate their investments at any time.

Tax Efficiency – Investors are eligible for tax rebate depending on the amount invested. Asset Management Companies are required to distribute a percentage of the earning (refer to fund-specific prospectus for exact %) as dividends to investors, out of which up to TK 25,000 is tax-free. In addition, profits generated by the mutual fund are also tax exempted.

Low transaction costs – By investing in a Mutual fund, investors invest in a wide range of instruments – various securities, bonds, debentures and other money-market instruments such as FDR, etc. all at once. Therefore, as they are investing collectively, they do not need to pay taxes or other fees/charges separately for each instrument which leads to overall lower transaction fees.

Investors have access to the value of their investment on a weekly basis. The portfolio is also disclosed quarterly with the asset manager’s investment strategy and outlook. In addition, the prospectus discloses all other necessary information in details.

• What is the return that I can expect?

There is no guaranteed percentage of return. Empirically, it has been observed that mutual funds can generate higher return than all other asset classes in the long run.

• Who is regulatory body for Mutual Fund?

Bangladesh Securities and Exchange Commission (BSEC) is the regulatory body of Mutual Funds in Bangladesh.

• Is there any Entry or Exit fee?

There is no entry or exit fee.

• How often will the NAV of Mutual Funds of Zenith be declared?

The NAV of all mutual funds of Zenith is declared on Sunday every week on our website, via SMS and in Financial Express.

Investment in this Fund by individual investors will enjoy tax exemption benefits under Section 44(2) of the Income tax Ordinance, 1984. Country’s Finance Act and Government’s tax policies will always determine the tax benefits from investment in mutual funds. However, investors in mutual funds are entitled to the following tax benefits under the current tax policies:

1. Tax advantage on Income:

Income from a mutual fund or a unit fund up to BDT 25,000.00 (Twenty Five Thousand Taka only) is exempted from tax as per clause 22A of 6th Schedule (Part A) under Income Tax Ordinance, 1984.

2. Investment Tax Credit:

According to the Section 44(2)(c) under Income Tax Ordinance, 1984, the amount of allowable investment is actual investment or 25% of total taxable income or BDT 1,50,00,000.00 (Taka One crore & Fifty Lac only), whichever is lower.

According to the Section 44(2)(b) under Income Tax Ordinance, 1984, the tax rebate rate is from 15% to 10% as per following schedule:

Total Taxable Income	Rate of Tax Rebate
Up to BDT 10,00,000.00	15% of eligible amount
From BDT 10,00,001.00 to BDT 30,00,000.00	i.       BDT 2,50,000.00 of eligible amount at the rate of 15% ii.      Remaining of the eligible amount at 12%
Above BDT 30,00,000.00	i.      BDT 2,50,000.00 of eligible amount at the rate of 15% ii.      Next BDT 5,00,000.00 of eligible amount at the rate of 12% iii.      Remaining of the eligible amount at 10%

Example:

An individual’s total taxable income is BDT 32,00,000.00 (Taka Thirty Two Lac only) in a year and actual investment is BDT 20,00,000.00 (Taka Twenty Lac only). His eligible investment for tax rebate will be the lowest amount of the following figures:

i.	Actual Investment:	BDT 20,00,000.00
ii.	25% of total taxable income:	BDT 8,00,000.00 (25% x BDT 32,00,000.00)
iii.	Maximum eligible investment:	BDT 1,50,00,000.00

Considering the above three figures, the eligible investment will be BDT 8,00,000.00 (Taka Eight Lac only).

As his total taxable income is above BDT 30,00,000.00, so the total tax rebate for the individual will be calculated as follows:

First BDT 2,50,000.00 of eligible amount at the rate of 15%	= BDT 37,500.00 (15% x BDT 2,50,000.00)
Next BDT 5,00,000.00 of eligible amount at the rate of 12%	= BDT 60,000.00 (12% x BDT 5,00,000.00)
Remaining of the eligible amount (BDT 50,000.00) at the rate of 10%	= BDT 5,000 (10% x BDT 50,000.00)
Total Rebate	BDT 1,02,500.00

The investor can reduce his tax liability of BDT 1,02,500.00 (Taka One Lac Two Thousand & Five Hundred only) by investing in the mutual fund.

This is a simple illustration. The amount can vary and will depend on individual circumstances. Also, please note that the tax rebates may change as per government’s decision in any year. Investors are advised to consult with the tax advisory, if required.