Frequently Asked Questions (FAQs)

  • Qus : What does an Asset Management Company do?
    • Ans : An Asset Management Company (AMC) is a legal entity licensed and regulated under supervision of a nation’s Securities and Exchange Commission (SEC),that trades and invests assets - like stocks, bonds etc through pooled funds, on behalf of clients so that they can meet their investment goals. Asset management companies provide investors with more diversification and investing options than they would have by themselves.


  • Qus : What does Universal Financial Solutions Limited (UFS) do?
    • Ans : Universal Financial Solutions (UFS) is an Asset Management Company (AMC) regulated by the Bangladesh Securities and Exchange Commission (BSEC).  As an AMC, UFS is mainly responsible for investing the pooled money into diversified asset classes through mutual fund investment. Besides its core business, UFS also provides financial advisory and fund raising services for structuring and funding projects to facilitate and execute financial solutions for varied (individual/institutional) clients.


  • Qus : Why consider investing with Universal Financial Solutions Limited (UFS)?
    • Ans : UFS provides high level of expertise regarding investing fund. The core objective of introducing the unit funds by UFS is to achieve superior risk adjusted return in forms of capital appreciation, dividend, interest income and to provide attractive dividend payments to the unit holders.


  • Qus : What is a 'Mutual Fund' ?
    • Ans : A mutual fund is just the linking bridge that allows a group of investors to pool their money together with a predetermined investment objective that provides them with more diversification and investing options than they would have by themselves.


  • Qus : What are the most common types of mutual fund?
    • Ans : There are two most common types of mutual funds, i.e.,(i) Open-end Mutual Fund or Unit Fund and (ii) Closed-end Mutual Fund.

      i. Open-end Mutual Fund or Unit Fund: An open-end fund is one that can be subscribed all through the year. These do not have a fixed maturity. Investors can accessibly buy and sell units at prices around the fund’s Net Asset Value (“NAV”). The key feature of open-end mutual fund is liquidity.

      ii.Close-end Mutual Fund: These funds have a stipulated maturity period. Closed-end funds generally issue shares to the public only once, when they are created through an Initial Public Offering (IPO). Their shares are then listed for trading on stock exchange. Investors who no longer wish to invest in the fund cannot sell their shares back to the fund (as they can with an open-end fund). Instead, they must sell their shares to another investor in the market at the prevailing market price of the fund.


  • Qus : What is 'Face Value' of Mutual Fund?
    • Ans : Face value refers to the base value of the units in the mutual fund and this is the value at which the fund started out when it commenced operations. 


  • Qus : What is 'Net Asset Value' of Mutual Fund?
    • Ans : Net asset value (NAV) is the value of a fund's assets less the value of its liabilities.


  • Qus : What is an Islamic Fund?
    • Ans : The Fund invests in Shariah compliant companies, in response to the needs of Muslim investors, who not only want to have a financially rewarding investment, but a Shariah compatible one as well.


  • Qus : Who are the Key Parties involved in mutual fund operation in Bangladesh?
    • Ans : Following are the key parties involved in mutual fund operation:

      1. Sponsor - Any bank or financial institution or any other limited company who initiates the fund by subscribing minimum 10% of total fund size.

      Key role - The Sponsor constitutes the fund by virtue of Trust Deed.

      2. Trustee - Any bank or financial institution or any other limited company registered by the Bangladesh Securities and Exchange Commission (BSEC) to act as ‘the Trustee’.

      Key role - The Trustee is the guardian of the fund and holds all capital assets of schemes of the Fund in trust on behalf of the unit holders.

      3. Asset Management Company (AMC) - Any bank or financial institution or any other limited company registered by the BSEC to act as ‘the Asset Management Company’.

      Key role - The Asset Management Company structures, operates and manages the schemes of the Fund approved by the Trustee and the Commission (BSEC) and in accordance with the provisions of the Trust Deed and the Rules.

      4. Custodian - Any bank or financial institution or depository or any other limited company registered by the BSEC to act as ‘the Custodian’.

      Key role - The Custodian keeps the securities of the Fund in safe custody.

      5. Selling Agent - Any bank or financial institution or insurance company or merchant banker or stock broker or a person designated by the Asset Management Company (AMC) for accepting transaction/ service requests from the investors who will buy the units of the fund.

      Key role - Selling Agent is appointed by AMC especially for open-end fund and act on behalf of the AMC.


  • Qus : What is the formula for UFS to calculate the unit fund's net asset value?
    • Ans : UFS uses the following formula to derive Net Asset Value (NAV):

          Total NAV                 = VA - LT

          NAV per unit             = Total NAV / No. of units outstanding

          VA                           = Value of all securities in vault + Value of all securities placed in lien + Cash in hand and at bank + Value of all securities receivables + Receivables of proceeds of sale of investments + Dividend receivables net of tax + Interest receivables net of tax + Issue expenses amortized as on date + Printing, publication and stationery expenses amortized as on date

          LT                            = Value of all securities payable + Payable against purchase of investments + Payable as brokerage and custodial charges + Payable as Trustee fees + All other payable related to printing, publication and stationery + Accrued deferred expenses with regard to management fee, annual fee, audit fee and safe keeping fee.


  • Qus : What is 'Purchase/Subscription' Price for unit fund?
    • Ans :It is the price/amount per unit at which the units of the fund can be purchased from the asset management company.


  • Qus : What is 'Repurchase/Redemption' Price for unit fund?
    • Ans :It is the price/amount per unit at which the units of the fund can be redeemed/repurchased from the unit holders.


  • Qus : Who are the Eligible Investors for Unit Fund?
    • Ans : Following includes the eligible investors of unit fund in Bangladesh:

      1. Individuals - Both resident and non-resident Bangladeshi;

      2. Institutions - Both local and foreign, open ended unit funds and collective investment schemes are eligible to subscribe the units of the Fund.