Vanguard specializes in mutual funds and our priority is to promote and launch new to newer funds. Bangladesh has a thriving mutual fund industry and although it is still at a nascent stage, we have both expertise and potential to ride through the ongoing mutual fund wave. Right now 41 funds are listed on both the Dhaka Stock Exchange and the Chittagong Stock Exchange and all these funds are close-ended funds. There are a couple of open-ended funds, known as unit funds and these are not listed on the exchanges. Vanguard is committed to realizing the potential of the market to help investors diversify their portfolio and meet their specific investment objectives.
Our clients’ interests always come first, if we serve our clients well, our own success will follow. We have an uncompromising determination to achieve excellence in everything we undertake. Though we may be involved in a wide variety and heavy volume of activity, we would, if it came to a choice, rather be best than biggest.
Considering the market potentialities, Vanguard believes its mandate in the following funds:
Mutual Fund(Basic):
Basic mutual fund provides investors with a portfolio of a fixed or variable mix of the three main asset classes, e.g. - stocks, bonds and cash equivalents, in a variety of securities. This fund maintains a specific proportion of asset classes over time, while others vary the proportional composition in response to changes in the economy and investment markets. Some investors tend to use this ‘Fund of Funds’ as structure and invest in other mutual funds rather than individual securities. This is suitable for investors looking for the advantages of investing in a single portfolio with broad diversification.
Balanced Fund:
Balanced fund is a fund that combines a stock component, a bond component and sometimes a money market component in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation. A balanced fund is geared toward investors who are looking for a mixture of safety, income and modest capital appreciation. The amounts that such a mutual fund invests into each asset class usually must remain within a set minimum and maximum.
Special Purpose Fund (SPF):
Special Purpose Funds (SPF) are established by the Legislature for specific purposes. Special Purpose Funds are used when it is appropriate to segregate revenues and expenditures from the General Revenue Fund (GRF). Enabling legislation outlines the purpose of the fund and who is to administer the fund, it outlines the type of revenue that can be credited to the fund, the type of expenditures that can be made from the fund, and it provides for investments.
Due to the new development in the mutual fund industry SPF will be the upcoming big success. Vanguard is trying to accommodate this opportunity to create SPF in a variety of sectors like Real Estate, Commodities and Specific Project Investment.
Islamic Fund:
Islamic Fundsinvest inShariahcompliant companies and in equities which comply with the Islamic laws and values investors who believe strongly in Islamic prohibition of RIBA (interest) are encouraged to invest in Islamic Mutual funds. These funds are reputed for good governance and transparency.
Growth Fund:
Growth Fund is a diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts. Portfolio companies would mainly consist of companies with above-average growth in earnings that reinvest their earnings into expansion, acquisitions, and/or research and development. Most growth funds offer higher potential capital appreciation but usually at above-average risk. Growth funds are more volatile than funds in the value and blend categories. The companies in a growth fund portfolio are in an expansion phase and they are not expected to pay dividends. Investing in growth funds requires a tolerance for risk and a holding period with a time horizon of five to 10 years.
Value Fund:
Value Fund is a stock mutual fund that primarily holds stocks that are deemed to be undervalued in price and that are likely to pay dividends. Value funds are one of three main mutual fund types; the other two are growth and blend (a mix of value and growth stocks) funds. Every large mutual fund family has a value fund component in which funds are often broken down by size. For example, a fund family may include small-, mid- and large-cap value funds for investors to choose from. The premise of value investing is that the market has inherent inefficiencies that enable companies to trade at levels below what they are actually worth. In theory, once the market corrects these inefficiencies, the value investor will see the share price rise.
Islamic Fund:
Islamic Fundsinvest inShariahcompliant companies and in equities which comply with the Islamic laws and values Investors who believe strongly in Islamic prohibition of RIBA (interest) are encouraged to invest in Islamic Mutual funds. These funds are reputed for good governance and transparency.
Index Fund:
An index fund (also index tracker) is a collective investment scheme that aims to replicate the movements of an index of a specific financial market, or a set of rules of ownership that are held constant, regardless of market conditions. This type of mutual fund with a portfolio constructed to match or track the components of a market index to provide broad market exposure, low operating expenses and low portfolio turnover. Tracking can be achieved by trying to hold all of the securities in the index. Other methods include statistically sampling the market and holding "representative" securities.
Most index funds around the world work by identifying an already well-known index, usually maintained by a respected third party, then building a fund that either owns every asset in the index or achieves the same end by holding similar securities. Since an index fund owns all of the investments in the index, there are no picking winners and losers. As result, there’s also much less work in maintaining an index fund. That results, normally, in much lower costs for the investor.
Hedge Fund:
Hedge Fundis acollective investment scheme, often structured as alimited partnership that invests private capital speculatively to maximize capital appreciation. Hedge funds tend to invest in a diverse range of markets, investment instruments and strategies. Today the term ‘Hedge Fund’ refers more to the structure of the investment vehicle than the investment techniques. Though they are privately owned and operated, Hedge Funds are subject to the regulatory restrictions of their respective countries.
Hedge Funds aim at high return and therefore automatically involve high risk. Unlike public mutual funds, hedge funds cater to the needs of sophisticated and high net worth investors. These funds are far more flexible than mutual funds in terms of investment strategies and suitable for high risk undertakers.
Hedge Funds are oftenopen-endedand allow additions or withdrawals by their investors. A Hedge Fund's value is calculated as a share of the fund'snet asset value, meaning that increases and decreases in the value of the fund's investment assets are directly reflected in the amount an investor can later withdraw.