Formation Of EBL First Mutual Fund:

Mutual Fund is one of the oldest and most widely used investment vehicles in the world. Conceptualized almost 300 years ago, the Mutual Fund structure has not only survived the test of time and the many ups‐and downs of the world financial markets, but it has flourished. Today the global Mutual Fund industry is gigantic, comprising of more than 80,000 individual funds with over US$26 trillion in assets under management. In terms of reach, over 300 million retail investors across a hundred countries invest in capital markets through Mutual Funds. Why has this industry been so successful? Three main reasons:

  • Through the pooling of assets, Mutual Funds offer small investors access to professional management at a minimal cost
  • Mutual Funds help small investors reduce their investment risks through diversification
  • Due to strict regulatory oversight and separation of the investment, custodial and oversight functions, Mutual Funds offer one of

the most transparent and safe investment vehicles

Eastern Bank Limited (EBL) has decided to be the first Bangladeshi commercial bank to sponsor a Mutual Fund to manage its capital market investments in a safe and professional manner. EBL’s senior management believes that returns from the mutual fund are expected to help diversify EBL’s revenue stream. In addition, by launching the EBL First Mutual Fund, EBL also looks to do its part to improve the efficiency of the Bangladeshi capital markets. In this endeavor, EBL has chosen two highly capable partners: RACE Management PCL as the Fund Manager and the Investment Corporation of Bangladesh (ICB) as the Trustee and Custodian of the Fund.

Formation Of Ebl First Mutual Fund In The Context Of Present Market


In Bangladesh, the Mutual Fund industry is still in its infancy. With less than 20 individual mutual funds to choose from, with combined assets of less than Tk. 2,000 crores, and comprising only a small percentage of the domestic market capitalization, mutual funds have a lot of room to grow. In addition, mutual funds can play a critical role in the development and proper functioning of the capital markets: (i) By soaking up liquidity from retail investors and channeling it through professional investment managers, thereby reducing rumor driven volatility; (ii) By attracting new sources of domestic and foreign institutional funds into the local capital markets; (iii) By eliminating the excessive costs associated with creating internal asset management groups at institutions whose core business is not investments; (iv) By creating a cadre of financial analysts who are necessary for the next phase of evolution of Bangladesh’s capital markets. Due to these reasons, regulators such as SEC and industry experts have been urging the expansion of the mutual fund industry for many years. EBL First Mutual Fund is an endeavor to fulfilling the requirement of expansion in the mutual fund industry.

The Constitution Of The Fund:

EBL First Mutual Fund has been constituted through a Trust Deed entered into between Eastern Bank Limited and Investment Corporation of Bangladesh on April 5, 2009 under the Trust Act, 1882 and Registration Act, 1908. The Fund was registered by the SEC on April 19, 2009 under the সিকিউরিটিজ ও এক্সচেঞ্জ কমিশন (মিউচ্যুয়াল ফান্ড) বিধিমালা, ২০০১।

Life Of The Fund:

The Fund is a closed‐end mutual fund of 10 (Ten) years. As per BSEC’s Directive No BSEC/CMRRCD/2006-157/210/Admin/83, dated October 02, 2018, the tenure of the fund may be increased up to another 10 years, established with a view to broaden the base of investment and develop the capital market.

The Trust Deed also provides the flexibility to the unit‐holders to extend the tenure of the fund beyond the initial 10 years.

Size, Face Value And Market Lot Of The Fund:

  • The initial Fund size is fixed at 10,00,00,000 (ten crore) units of Tk. 10 each totaling Tk. 100,00,00,000 (Taka one hundred crore).
  • The Sponsor’s portion of the Fund is 2,00,00,000 (two crore) units of Tk. 10 each totaling Tk.20,00,00,000 (Taka twenty crore).
  • Size of the Pre‐IPO Private Placement is 6,00,00,000 (six crore) units of Tk. 10 each totaling Tk.60,00,00,000 (Taka sixty crore)
  • Size of the Initial Public Offering (IPO) is 2,00,00,000 (two crore) units, each worth Tk. 10, totaling Tk.20,00,00,000 (Taka twenty crore) available as public offering to general public, NRBs, Mutual Funds and collective investment schemes.