The unitholders of the Southeast Bank 1st Mutual Fund (SEBL1STMF) – a closed-end listed mutual fund – will decide regarding the conversion to open-end or liquidating the fund at a virtual meeting on 25 May 2021.
At the meeting, the unitholders will also approve the appointment of an auditor for conducting valuation of the fund.
The fund will complete its 10-year tenure on 15 May 2021. As per the trustee's decision, the fund's trade on stock exchanges will be suspended on 16 May and the effective date is 17 May.
Effective date means immediate next working day of the trade suspension date when the trustee of the fund shall take control over the fund.
VIPB Asset Management is the manager of the fund, while the Investment Corporation of Bangladesh (ICB) acts as the custodian and the trustee.
This is the first instance where an asset manager voluntarily prefers conversion despite the opportunity to extend the fund's tenure for another 10-year term.
The planned conversion will only occur if at least 75% of the unitholders approve the conversion proposal at the meeting. Otherwise, the fund will be liquidated.
Open-ended funds cannot be listed, their units cannot be traded between investors. Unitholders instead buy units from the asset managers concerned or their authorised agents.
Investors can also surrender the fund units to the asset manager and get refunds of their money based on the units' current net asset value.
The fund was listed on the stock exchanges on 16 May 2011 with an initial size of Tk90.7 crore. The fund has so far paid cash dividends amounting to Tk88.8 crore.
As on 31 December last year, its investment portfolio in the stock market was Tk109.50 crore. Out of the total investment, 51.62% made in only five companies – Brac Bank, Square Pharma, British American Tobacco, Grameen Phone, and Marico.
At the end of last year, the fund's total asset at the market value of the investment portfolio was Tk130.51 crore and the shareholders equity was Tk129.02 crore.
In the first half of this fiscal year, the fund posted a 288% growth in net profit of Tk17.52 crore.
Out of the total units of the fund, sponsors and directors hold 27.56%, institutional investors 57.05% and general investors 15.39%.