Most Mutual Funds Announce Dividends Below 10 Percent

Most of the 14 mutual fund schemes in  the country that have declared dividends so far have distributed cash dividends of less than 10 percent.  Based on the profit of the last fiscal year 2023/24, five of these schemes have declared dividends of 10 percent or more.

Among 7 open-ended and 36 closed-end mutual funds in operation, 14 mutual fund schemes, including 3 open-ended schemes, have announced dividends so far. NIC Asia Select 30 declared the highest dividend of 14 percent, while Sunrise Focused Equity Fund and Laxmi Value Fund 2 announced the lowest dividend of 4.5 percent.

Five schemes, including one open-ended scheme managed by NIC Asia Capital Limited, have announced their dividends. The open-ended NIC Asia Dynamic Debt Fund, managed by NIC Asia Capital, has proposed a 10 percent cash dividend, including tax, this year. This scheme distributed a 10 percent dividend last year as well.

Similarly, NIC Asia Select 30 and NIC Asia Flexi Cap Fund have started distributing dividends this year. From last year's profit, NIC Asia Select 30 proposed a 14 percent cash dividend, and NIC Asia Flexi Cap Fund proposed a 10.5 percent cash dividend distribution.

Apart from this, NIC Asia Balanced Fund distributed a 10 percent cash dividend last year, and this year it plans to distribute a 9.25 percent cash dividend, which is 0.75 percentage points less. NIC Asia Growth Fund, managed by NIC Asia Capital, distributed a 10.5 percent cash dividend last year, but this year it will distribute a 9.5 percent cash dividend, 1 percentage point less.

The dividends of these two schemes, which operate with the main objective of investing in the securities market, are lower this year than last year. The secondary market of securities began to grow from July 1. Damodar Rayamajhi, head of merchant banking at NIC Asia Capital, explained that the dividends must be distributed based on the profit until the end of last fiscal year.

Rayamajhi mentioned that except for one scheme, the unit holders of all schemes under NIC Asia Capital have received dividends. He also expressed his commitment to ensuring the future operation of the schemes in a way that will not disappoint the unit holders. NIC Asia Growth Fund 2, which operates under NIC Asia Capital's management, issued units after mid-December 2023.

All three schemes under Laxmi Capital Limited have announced their dividends. The open-ended Shubalakshmi Fund plans to distribute a 7.5 percent cash dividend. This scheme has started distributing dividends this year. Similarly, Laxmi Unnati Kosh distributed a 9.5 percent dividend last year, but this year it plans to distribute 7.5 percent, which is 2 percentage points less. Laxmi Value Fund has also started distributing cash dividends this year, proposing a 4.5 percent dividend.

The Siddharth Investment Growth Scheme-3, operated under Siddharth Capital, has started distributing dividends this year, proposing a 7 percent dividend. Chief Executive Officer of Siddharth Capital, Sandeep Karki, noted that the scheme, which has been operating since April 29, 2023, succeeded in providing dividends in its first year.

Karki added that Siddharth Capital plans to offer better dividends in the coming year. He emphasized the need for diversity in the investments made by schemes primarily focused on investing in securities, especially as the number of mutual funds increases. Siddharth Capital currently manages four schemes, including one open-ended scheme.

In addition to these, three schemes, including one open-ended scheme managed by Kumari Capital, have also declared their dividends. Both Kumari Equity Fund and Kumari Dhanvriddhi Yojana have proposed a 9.5 percent cash dividend, and the open-ended Kumari Sunaulo Lagani Yojana has proposed a 10.5 percent cash dividend. Last year, Kumari Equity Fund distributed a 10 percent dividend, and Kumari Dhanvriddhi Yojana distributed a 6 percent dividend. This year, the dividends of both schemes have decreased. Kumari Sunaulo Yojana is set to distribute dividends in its first year. Sunrise Focused Equity Fund plans to distribute a 4.5 percent dividend in its first year, while Sunrise First distributed a 16 percent dividend last year and will distribute a 12 percent dividend this year.