The regulator warns that unit holders may not recover more than a fund’s actual net asset value if it is liquidated, making purchases at inflated prices risky.
Logo of BSEC. Photo: Collected
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Logo of BSEC. Photo: Collected
The Bangladesh Securities and Exchange Commission (BSEC) has urged retail investors to assess a mutual fund’s net asset value (NAV) per unit and overall financial health before investing, warning against buying units at prices significantly above their underlying asset values.
In a press release issued today (5 October), the capital market regulator said units of some mutual funds are trading on the bourse at prices significantly higher than their NAV per unit.
Describing the gap as an unusual price disparity, the commission said NAV per unit is a key indicator of a fund’s intrinsic value. It is calculated by dividing the fund’s total net assets by its total outstanding units.
The regulator also cautioned that in the event of a mutual fund liquidation, unit holders have no scope to receive payout beyond the fund’s actual net asset value, making purchases at inflated market prices inherently risky.
In light of these developments, the BSEC advised general investors to verify the latest published NAV per unit and other relevant financial disclosures before investing.
The commission strongly cautioned investors against making purchase decisions based solely on price surges, market rumours, social media speculation or persuasive advice from individuals or groups.
Reiterating its commitment to investor protection, the securities regulator urged market participants to make informed decisions by assessing a fund’s actual asset value, financial health, tenure, portfolio composition and published regulatory reports.
