Mutual funds have become a popular investment choice in Nepal, offering individuals a way to invest in a diversified portfolio without directly buying stocks or bonds. Currently, the Nepal Stock Exchange (NEPSE) lists 35 closed-end mutual funds, which trade like regular stocks. Additionally, there are 8 open-end mutual fund schemes, but these are bought and sold directly through fund managers rather than on the exchange.
Two new funds MBL Equity Fund (MBLEF) and Garima Samriddhi Yojana (GSY) have recently opened for public investment. Once they get listed on NEPSE, the total number of mutual fund schemes will increase to 45, giving investors more options.
Where Are Mutual Funds Investing?
In Chaitra 2081, mutual funds in Nepal had a total investment of Rs. 43.37 Arba in listed and unlisted companies. This is slightly lower than the previous month (Falgun 2081), when the investment stood at Rs. 44.02 Arba.
Hereās a closer look at their investment breakdown:
- Bank Deposits: Mutual funds held Rs. 8.49 Arba in bank balances in Chaitra, down from Rs. 9.17 Arba in Falgun.
- Debentures & Bonds: Investments in debentures and bonds amounted to Rs. 2.72 Arba.
- Primary Shares & Rights: Mutual funds allocated 2.49% of their investments (around Rs. 1.46 Arba) in primary shares and rights issues.
This data highlights how mutual funds spread their investments to balance risk and returns. While they mainly invest in stocks, they also keep funds in safer options like bank deposits and bonds.
Mutual Funds Top Investments in the Month of Chaitra, Irrespective of Sectors
Most Bought Stocks By Mutual Funds in Chaitra
Most Sold Stocks By the Mutual Fund Sector in Chaitra
Sector-Wise Investment Trends of Mutual Funds in Nepal
Mutual funds in Nepal have strategically allocated their investments across various sectors, with clear preferences emerging in their portfolio holdings. As ofĀ Chaitra 2081, their investments reveal which industries are attracting the most capital and how fund managers are diversifying risk.
Top Sector Investments
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Commercial Banking (20.70%)Ā ā Mutual funds have the highest exposure to commercial banks, investingĀ Rs. 9.11 ArbaĀ in this sector. This dominance reflects the stability and growth potential of Nepalās banking industry.
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Non-Life Insurance (13.91%)Ā ā The second-largest allocation is in non-life insurance companies, with investments worthĀ Rs. 6.12 Arba. This sector has been gaining traction due to increasing insurance penetration in Nepal.
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Microfinance (13.53%)Ā ā Close behind is the microfinance sector, where mutual funds have deployedĀ Rs. 5.95 Arba. Microfinance institutions remain attractive due to their high-interest margins and rural market reach.
Other Sector Allocations
While the above three sectors dominate, mutual funds have also invested smaller amounts in:
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Manufacturing & Products
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Promoter Shares
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Other Emerging Sectors
These allocations indicate a balanced approach prioritizing high-growth industries while maintaining some exposure to niche markets.
Top Commercial Bank Investments by Mutual Funds in Nepal
Mutual funds in Nepal are heavily invested in commercial banks of Nepal, with Everest Bank (EBL) leading at Rs. 1.15 Arba, followed closely by Sanima Bank (SANIMA) at Rs. 1.13 Arba and NIC Asia Bank (NICA) at Rs. 76.52 crores. These allocations reflect fund managers’ preference for stable, high-performing banks with strong market positions and growth potential. The substantial investments in these top banks highlight their importance in Nepal’s financial sector and mutual funds’ strategy of balancing security with returns.
Mutual Fund Investments in Development Banks
Among development banks,Ā Garima Bikas Bank (GBBL)Ā leads with mutual fund investments worthĀ Rs. 92.87 crores, reflecting strong institutional confidence.Ā Shine Resunga Development Bank (SHINE)Ā follows closely withĀ Rs. 61.77 crores, whileĀ Muktinath Bikas Bank (MNBBL)Ā ranks third atĀ Rs. 60.73 crores. These allocations highlight mutual funds’ focus on stable, high-growth development banks in Nepal’s evolving financial sector.
Mutual Fund Investments in Finance Companies
In Nepal’s finance sector,Ā Manjushree Finance Limited (MFIL)Ā leads with mutual fund investments worthĀ Rs. 14.05 crores, followed byĀ ICFC Finance Limited (ICFC)Ā atĀ Rs. 11.26 crores. These allocations demonstrate mutual funds’ strategic focus on established finance companies in Nepal with strong market presence and growth potential.
Mutual Funds’ Hotel Sector Investments
Within Nepal’s tourism sector,Ā Soaltee Hotel Limited (SHL)Ā leads mutual fund investments withĀ Rs. 34.58 croresĀ allocated – the highest among six listed hospitality companies. This substantial investment highlights institutional confidence in SHL’s market leadership and the recovery potential of Nepal’s tourism industry.
Hydropower Sector: Mutual Fund Investment Trends
Mutual funds have shown strong interest in Nepal’s hydropower sector, withĀ Mountain Energy Nepal Limited (MEN)Ā attracting the highest investment atĀ Rs. 67.78 crores. Following closely areĀ Sanima Mai Hydropower (SHPC)Ā withĀ Rs. 46.91 croresĀ andĀ Api Power Company (API)Ā withĀ Rs. 39.54 croresĀ in mutual fund allocations.
These strategic investments highlight:
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Confidence in MEN’s growth potential and project pipeline
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Significant exposure to established players like SHPC
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Balanced portfolio approach with API’s inclusion
The allocations reflect mutual funds’ long-term outlook on Nepal’s energy sector and its role in the nation’s economic development.
Mutual Fund Investments in the Life Insurance Sector
Nepal’s life insurance sector has attracted significant mutual fund investments, withĀ National Life Insurance Company (NLICL)Ā leading atĀ Rs. 1.24 Arba. Close behind are industry stalwartsĀ Nepal Life Insurance (NLIC)Ā withĀ Rs. 95.77 croresĀ andĀ Asian Life Insurance (ALICL)Ā withĀ Rs. 68.90 croresĀ in mutual fund allocations.
Mutual Funds’ Investment in ManufacturingĀ and Products:
Nepal’s manufacturing sector has attracted notable mutual fund investments, withĀ Shivam Cements (SHIVM)Ā leading atĀ Rs. 81.17 crore, followed byĀ Himalayan Distillery (HDL)Ā atĀ Rs. 31.64 croreĀ andĀ Unilever Nepal (UNL)Ā atĀ Rs. 26.91 croreĀ as of Chaitra 2081.
Mutual Funds’ Microfinance Sector Investments (Chaitra 2081)
Microfinance Companies in Nepal are the key sectors in investment for mutual funds, with Chhimek Laghubitta (CBBL)Ā leading investments atĀ Rs. 1.15 Arba, followed byĀ Sana Kisan Laghubitta (SKBBL)Ā atĀ Rs. 94.49 CroresĀ andĀ Nirdhan Utthan Laghubitta (NUBL)Ā atĀ Rs. 83.32 Crores.
Sector Breakdown:
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CBBL Dominance:Ā Commands 39% of the top three MFI investments
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Rural Focus:Ā SKBBL and NUBL allocations show strong rural penetration strategies
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Total Exposure:Ā Combined Rs. 2.93 Arba in top three reflects sector importance
Mutual Funds Investing in Other Mutual Funds
Nepal’s mutual funds show strategic cross-investments, withĀ NIBL Stable Fund (NIBLSTF)Ā leading atĀ Rs. 19.4 crore, followed byĀ Sunrise Focused Equity Fund (SFEF)Ā atĀ Rs. 17.38 croreĀ andĀ NIC Asia Growth Fund 2 (NICGF2)Ā atĀ Rs. 16.99 crore. These allocations reflect professional fund managers’ preference for stable debt (NIBLSTF), focused equity (SFEF), and growth-oriented (NICGF2) strategies, demonstrating portfolio diversification and confidence in peer schemes.
Mutual Funds’ Top Non-Life Insurance Picks
Nepal’s non-life insurance sector has attracted substantial mutual fund investments, withĀ Siddhartha Premier Insurance (SPIL)Ā leading atĀ Rs. 1.19 Arba, closely followed byĀ Neco Insurance (NIL)Ā atĀ Rs. 1.18 ArbaĀ andĀ Sagarmatha Lumbini Insurance (SALICO)Ā atĀ Rs. 1.14 Arba. These near-identical allocations to the top three insurers reveal:
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Intense Competition:Ā Mere Rs. 5 crore separates SPIL (1st) and NIL (2nd)
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Sector Concentration:Ā Combined Rs. 3.51 Arba in top 3 shows heavy institutional focus
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Growth Potential:Ā Reflects confidence in non-life insurance market expansion
The minimal gaps between these investments suggest that mutual funds view Nepal’s non-life insurers as relatively comparable in terms of risk-reward profiles.
Mutual Fund Investments in Promoter Shares
Nepal’s mutual funds have strategically invested in promoter shares of select companies, demonstrating confidence in their long-term growth potential. The top investments include:
Mutual Fund Investments in Other Sectors
Mutual funds have investedĀ Rs. 89.46 croreĀ in Himalayan Reinsurance (HRL) andĀ Rs. 41.25 croreĀ in Nepal Telecom (NTC), showing confidence in Nepal’s insurance and telecom growth. These niche investments help diversify portfolios beyond traditional sectors.
Mutual Fund Investments in the Investment Sector
Nepal’s mutual funds have allocatedĀ Rs. 72.90 croresĀ toĀ Citizen Investment Trust (CIT), making it their top pick in the investment sector, followed byĀ CEDB Hydropower Development Company (CHDC)Ā withĀ Rs. 41.44 crores. These investments reflect confidence in CIT’s stable returns and CHDC’s hydropower growth potential.
NAV Performance of Mutual Funds in Chaitra 2081
NAV fluctuations varied significantly across funds last month.Ā NMB Saral Bachat Fund-EĀ led withĀ +4.01%Ā growth, reflecting its stable debt focus, whileĀ NMB Hybrid Fund L-IIĀ droppedĀ -15.46%Ā due to equity market volatility. ThisĀ 19.47% performance gapĀ highlights how asset allocation drives returns, with debt funds generally offering more stability than equity-oriented schemes during market swings.
