Performance of Mutual Fund Management of Bangladesh-Evidence from close end mutual Fund in Dhaka Stock Exchange Limited

Abstract

The mutual fund market in Bangladesh is still small though the concept of the mutual fund was introduced in the year of 1980.Mutual fund sector is lucrative at all over the world where it has much impact on GDP and total market capitalization but Bangladesh is lagging behind in this sector and unable to make proper use of this sector. Open end mutual fund performance is quite good rather than close end mutual fund in Bangladesh. Weekly NAV data of 10 close end mutual fund has been taken in this paper. Not all the funds are doing bad, still few funds‟ performance are extraordinary. Management‟s inefficiency, lack of trust of investors and poor governance by regulator are the main reasons behind the poor performance of mutual fund sector in Bangladesh. Moreover, the recent unusual upsurge in the stock markets, the redemption of the matured funds, unstable margin rule, unskilled investors, asymmetric information, declaration of re-investment units as dividend have made the mutual fund industry much tougher than ever before. To bring back the confidence of the investors in the mutual fund sector this paper is bringing some recommendations to reduce the stressors up to a certain level