Investment Banking

An investment bank is a financial intermediary that

mediates between companies that issue securities
and the individuals or entities wishing to purchase
them.
In this respect, investment banks operate along two
main lines: a "buy" side and a "sell" side.
"Buy" side operations include services such as
securities trading and portfolio management.

"Sell" side activities include underwriting new

lines of stock, marketing financial products, and
publishing financial research.
Services provided by Investment Bank
2. Financial
Advisor

1. Capital 3. Corporate
Raising Lending
Services

4. Portfolio
5. Research Management
Investment Bank: Services
 Investment bank helps a company to set
everything and list IPO (Initial Public Offerings) in
a stock exchange. IPO is one of the major
investment banking functions. This bank in return
charges commission from a company.
 There are two types of roles in M&A (Mergers
and Acquisition) of investment bank they are
seller representation or buyer representation. A
critical role in M&A is the valuation of a company.
The bank calculates the actual value of a company.
Investment bank also builds its strategy for M&A
of two companies and does financial provisioning
which helps a company in raising funds for M&A.
Investment Bank: Services (cont….)
 Corporate lending is essentially the same thing as a
personal loan, except instead of being made from a bank
to an individual, it is made from a bank to a company. As
a result, the amounts of money being dealt with tend to
be substantially larger.
 This investment banking function is a core job of an
investment bank to guide the investor to purchase,
manage his portfolio and to trade various securities.
Investment bank prepares reports based on company
performance and through this it investment bank makes
a decision on financial securities. An investment bank
manages a portfolio of customers and also provides tips
to investors whether to sell stocks or to buy stocks or
to hold stocks.
Investment Bank: Services (cont….)
 One of the most important investment banking function
is research. This research helps provide a rating to the
company to help investors to take a decision of
investment.
Corporate Finance
Corporate Finance
 Corporate finance departments are charged with
managing their companies' financial activities and
capital investment decisions. Such decisions include
whether to pursue a proposed investment and
whether to pay for the investment with equity, debt,
or both.

 They also include whether shareholders should

receive dividends, and if so, at what dividend yield.
Additionally, the finance department manages current
assets, current liabilities, and inventory control.

 A company's corporate finance activities are often

overseen by its chief financial officer (CFO).
Investment Advisory Services
a. New Issues

b. Merger and Acquisitions

c. Security Trading

d. Custodian

e. Corporate Restructuring

f. Asset Management
Business combination
 Business Combination is a type of
transaction in which businesses aim to
grow in size using one organization
acquiring the other organization and,
therefore, taking control of the business
activities and the employees of the other
organization. In simple terms, it is a
consolidation of two or more businesses
to achieve a common goal by eliminating
competition.
Types of Business combination
#1 – Horizontal Combination
 This type of consolidation is done with the objectives
of business combination of two or more organizations
operating in the same line of business. This combination
results in a reduction of competition and larger market
capitalization.
#2 – Vertical Combination
 The vertical combination is a combination of different stages
of the same business. For example, many businesses operate
independent businesses at different stages. This is also known
as sequence combination or process combination. It
combines different departments under one single control
point. The key objective is to reduce the per-unit cost of
production.
#3 – Lateral Combination
 This type of business combination is the combination of two businesses that deal in
a different line of business; however, they are connected in some way or another.
a) Convergent
 A convergent combination is the combination of different business units, say
suppliers of raw material to a major firm. In this type of combination, the larger
firm benefits from supplying raw materials and its inventory under its control.
b) Divergent
 A divergent combination is the combination of major firms that operate in related
businesses that use the major firm’s products as raw material.
c) Diagonal
 Diagonal combination refers to a combination of the manufacturing companies with
a service-related business. The objectives of business combination in this case
is to provide service for the products that have been sold and creates a sense of
customer satisfaction and trust since the customer can expect after-sales service at
the hands of the organization itself.
d) Mixed
 Mixed business combination agreement are also termed Circular
combinations. These unrelated businesses combine to form a new business called a
mixed combination. The new business form will have insights from the management
of both the organizations, which will help create an organizational and functional
structure that creates the most efficient way to operate the business.
Business combination examples
 Example #1
A combination of two major sugar manufacturers, ‘Sugar bell’
and ‘Crystal Sweeteners’, operating in the same line of business
is an apt example of a horizontal business combination. This
would result in the termination of the competition.
 Example#2
‘Mountain Mist,’ a packaged water manufacturer, combines with
a PET bottle manufacturer ‘Beige Plasto.’ This type of
combination will bring two different processes under single
management. In addition, the inclusion of the bottle
manufacturing unit under the same management will reduce
per-unit cost.
 Example#3
Supplier A deals in printer ink, papers, and folders, and Supplier
B deals in the same business. ‘Pressfit’ is a leading printing press.
Supplier A and B with Press Fit will be a concurrent
combination.
Advantages of business combination
 Managing the business becomes efficient since
decisions can be made based on a full view of the key
areas of business.
 The major advantage of a business combination is the
economies of scale, which refers to reducing the
per-unit cost of production.
 Reduced competition, in other words, refers to
increased market capitalization and a relative spike in
the profits gained.
 The businesses’ customers would benefit from the
combination since the new organization will engage in
activities to enhance the current procedures to
deliver a better product to the customers is one of
the reasons for business combination
Disadvantages of business combination
 Loss of employment – Since processes will be
combined, the workforce required for certain tasks
will be reduced.
 It can result in a disparity of the economy since the
economic power would be transferred to a few
people managing the industry. Thereby creating
differences in the income distribution in the economy.
 At the initial phase, communicating effectively and
bringing each department or business unit on the
same page is a mammoth task since there can be
cultural differences among the employees of the
organizations. This can result in inefficient
coordination and require rework for a simple task.
Financial Sponsors
 A financial sponsors group is an in-house team that operates within
an investment banking division of an investment bank. Financial
sponsors are investors in the private equity sector. They raise funds
from institutional investors (pension funds, insurance companies,
etc.) and then invest in the capital of companies.
 In addition to providing capital, financial sponsors frequently play a
role in supporting the management of the companies in which they
invest. Some of the areas where sponsors get involved include
financial structuring (Financial structuring is the process of selecting
the optimal mix of debt and equity), digital transformation (Digital
transformation is the process of adoption and implementation of digital
technology by an organization in order to create new or modify existing
products and services), internationalization or external growth.
 A financial sponsors group acts as an industry group for entities
that raise capital from investors, use this capital to invest in assets
and companies.
Foreign Exchange
 A sector in an investment bank is referred to as a trading
desk. Depending on the investment bank, trading
desks (trading desk is a physical location where transactions for
buying and selling securities occur) are likely to be divided by
market. The four main sectors are foreign exchange
or FOREX, fixed income (Government and corporate
bonds), equities, and commodities (gold, oil etc.).
 The foreign exchange (forex or FX) market is a global
marketplace for exchanging national currencies.
 Because of the worldwide reach of trade, commerce, and
finance, forex markets tend to be the world's largest and
most liquid asset markets.
 Currencies trade against each other as exchange rate pairs.
Foreign Exchange
 The three types are:
a) fully convertible, in which a country's
currency can easily be converted into
gold or another currency;
b) partially convertible, in which the
currency can be traded but tends to be
traded in low volumes; and
c) non-convertible, in which it is almost
impossible to convert the currency into
another legal tender.
Feature of FOREX Market
The foreign exchange market has several key features that set it apart
from other financial markets.
1. No Centralized market: It is a decentralized market that
operates 24 hours a day, 5 days a week, across multiple time
zones.
2. Liquidity: It is the largest and most liquid market in the world,
with high trading volumes and low transaction costs.
3. Accessibility: The forex market is open 24 hours a day, 5 days a
week, and can be accessed by anyone with an internet
connection. The market is accessible to a wide range of
participants, including individuals, financial institutions, and
governments.
4. Global market: The forex market is a global market, making it a
valuable tool for international businesses to manage their
currency risk.
5. Low transaction costs: The cost of trading in the forex market
is relatively low compared to other financial markets.
 Merger & Acquisitions (M & A)
 Mergers and acquisitions (M&A) are collaborations between two
or more firms. In a merger, two or more companies functioning at
the same level combine to create a new business entity. In an
acquisition, a larger organization buys a smaller business entity for
expansion. The collaboration between merger and acquisition
companies is to eliminate competition, improve operations, or
gain a larger market share.
 Merger & Acquisitions (M & A)
 Mergers and acquisitions (M&A) are strategic alliances (a
strategic alliance is a type of agreement between two companies
to mutually reap the benefits of a particular project) between
two or more companies.
 In mergers, companies join hands to create a new firm by
pooling their assets and resources.
 In acquisitions, however, one organization buys more than
51% shares of the other business entity.
 They are carried out for various reasons that are allowed
under the mergers and acquisitions law. Its other
benefits include elimination of excess workforce, growth
acceleration, technology, and the procurement of new talent.
By merging or acquiring firms, companies overcome
competition, attain economies of scale, acquire
a monopoly, and multiply profits.
Merger & Acquisitions (M & A)
Merger & Acquisitions (M & A)
 Vertical: Such a merger occurs between companies operating at
different supply chain stages.
 Horizontal: It is a merger between firms operating in the same
industry.
 Conglomerate: When a company functioning in one industry
collaborates with a firm operating in another sector, it is called
a conglomerate merger. This is done for diversification.
 Congeneric: Companies catering to the needs of the same
consumer base often come together to form a new congeneric
firm.
The various forms of acquisition are as follows:
 Friendly: When the acquirer and the target mutually agree on the
acquisition, the transition is friendly.
 Hostile: If the acquirer forcefully takes over the target without the
latter’s consent, it becomes a hostile takeover.
 Buyout: Alternatively, the acquirer purchases 51% or more stocks,
i.e., a controlling share in the target.
Valuation
 Valuation is a quantitative process of
determining the fair value of an asset,
investment, or firm. In general, a company
can be valued on its own on an absolute
basis, or else on a relative basis compared
to other similar companies or assets.
Types of Valuation Methods
Comparable Method
The comparable company analysis is a method
that looks at similar companies, in size and
industry, and how they trade to determine a fair
value for a company or asset. The past transaction
method looks at past transactions of similar
companies to determine an appropriate value.
Asset-based valuation
There's also the method, which adds up all the
company's asset values, assuming they were sold at
fair market value, to get the intrinsic value (Intrinsic
value is a measure of what an asset is worth).
Types of Valuation Methods
Discounted Cash Flow Method
Analysts also place a value on an asset or investment
using the cash inflows and outflows generated by the
asset, called a discounted cash flow (DCF) analysis.
These cash flows are discounted into a current value
using a discount rate, which is an assumption about a
minimum rate of return assumed by the investor.
Precedent Transactions Method
The precedent transaction method compares the
company being valued to other similar companies that
have recently been sold. The comparison works best if
the companies are in the same industry. The precedent
transaction method is often employed in mergers and
acquisition transactions.
Financial Strategy
 A financial strategy refers to a business or
individual’s approach to managing and
using financial resources to achieve goals.
It is an important part of the overall
business strategy. It involves planning and
decision-making related to investment,
budgeting, fundraising, cost management,
forecasting future financial scenarios, and
managing financial risks.
Key components of a financial strategy
 Investment strategy: Deciding what to invest in (equipment,
personnel, research, development, etc.), when, and how much to invest.
 Financing strategy: Determining how to raise the capital needed for
investment, whether through equity (like selling company shares), debt
(like loans or bonds), or internally generated cash flow.
 Risk management strategy: Identifying financial risks that the
Company faces (like exchange rate risk, interest rate risk, or credit
risk) and deciding how to mitigate them
 Cash flow management strategy: Managing the Company’s cash
flow to ensure there is always enough cash available to meet its
immediate needs, like payroll or debt payments.
 Capital structure strategy: Deciding what mix of equity and debt
the company should have. This affects the risk and return of the
Company and its valuation.
 Dividend policy: Determining how much of the Company’s earnings
should be paid out to shareholders as dividends and how much should
be retained for reinvestment in the Company.
Management of Capital Issue
 The management of issues for raising funds though various types of
instruments by companies is known as Issue management. Issue
management can be defined as managing the issues of corporate
securities like equity shares, preference shares and debentures or
bonds.
 The function of capital issues management in Nepal is carried out
by merchant bankers who have the requisite professional skill and
competence. One of their functions, in fact, is issue management.
Factors such as the tremendous growth in the number and size of
public listed companies, and the complexity arising due to the ever
increasing Securities Board of Nepal (SEBON) requirements have
all attributed to the increasingly significant role played by merchant
bankers in the recent past.
 The management of securities of the corporate sector offered to
the public on a regular basis, and existing shareholders on a rights
basis, is known as public issue management. Issue management is an
important function if merchant bankers and lead managers.
Book Building
Book building is the process by which an underwriter attempts
to determine the price at which an initial public offering
(IPO) will be offered

Criteria for IPO through book building process

Securities Board of Nepal (SEBON) has listed certain guidelines
for companies to be eligible to offer share through book
building, and those guidelines are;
 Company should operate at a profit for the last 3 years.
 Approval from the AGM of the company to issue IPO
through ‘Book Building’
 Net worth per share should be 150 percent of the per share
capital
 The company should have average or above average ratings
from the rating agencies.
Book building IPO Process

Company Obtain approval from company’s AGM for

decision issuance of IPO through book building system.

Appointment As per the provision in Company Act,

of 2006, company must take services of
issue manager licensed by Securities
Investment Board of Nepal (SEBON) for public
Banking offering of securities.

Prospectus is the important legal

Preliminary document to provide information about
Prospectus issuing company and the securities. The
Preparation prospectus should be approved from
Securities Board of Nepal.
Book building IPO Process (cont..)
Determine the average value of the IPO based
on the company's valuation and the demand of
Discussion the IPO being issued. Also, the company shall
program prepare an initial prospectus and conduct a
roadshow involving the interested qualified
institutional investors (QII)

After discussion program, the issuing company will

Obtain intent
receive the intent price from the qualified
price institutional investors.

Filing with While filing registration statement, the issuer has

to submit the prospectus with due diligence
SEBON certificate of issue manager and other documents
approval prescribed by SEBON.
Book building IPO Process (cont..)

The issuing company shall ask at least 10

Collecting
interested institutional investor to submit
bid from QII their bids.

Determine After collecting the bids, allotment of the

issue shall be made from high price to
Cut off low price. Based on the bids received, the
price cut off price shall be determined.

Issue The general public must apply at least 50

securities units at a discount of 10% of the cut-off
to public price.
Private Equity
 Private equity (PE) is a form of financing where
money, or capital, is invested into a company.
Typically, PE investments are made into mature
businesses in traditional industries in exchange
for equity, or ownership stake. PE is a major
subset of a larger, more complex piece of the
financial landscape known as the private markets.
 To invest in a company, private equity investors
raise pools of capital from limited partners (LPs)
to form a fund. Once they’ve hit their fundraising
goal, they close the fund and invest that capital
into promising companies. PE investors may invest
in a company that’s stagnant or distressed, but still
shows signs for growth potential.
Features of Private equity fund
Value add
operation
Longer High Risk
Strategic
Horizon High reward

Features
of PE
Low Market Low Regulatory
Efficiency Oversight

High Active
Involvement
Features of Private equity fund
Value-Add Operation
PE involves the stake of the company therefore, smooth operation of the
company is equally important for both the parties. Cost reduction,
technological improvement, capacity building etc. are some activities for value
creation.
Higher Risk and Higher Return
Generally PE firms invest in companies with high growth potential. Companies
and PE firms operate large research and diligence operations to make
business perform well. All the efforts made is to make business work. In such
an uncertain environment, efforts either will lead to higher returns or will
stand as a higher threat.
Low Regulatory Oversight
Investment by PE firms in a company is a strategic decision of that firm. If a
company who seeks investment must satisfy the need and demand of firms for
private equity. There is no hidden agenda and required obligation. A firm
considers all the return and risk before investing and accepts all the
outcomes, positive or negative whatsoever.
There are no stiff standard reporting regulations, submissions or any other
requirements.
Features of Private equity fund
High Active Involvement
PE firms actively participate in the building of the company. As PE investors
hold stake in the company, they not only enjoy the ownership but they take
the responsibility to make the company work and earn profit. Such equity
firms support the company by providing their expertise and using their
network to build the company.
Low Market Efficiency
Such equity funds are invested during the early or growth stage of a business.
In such early stages, the business is very volatile and relatively illiquid. The
product and services are in the development stage, the business structure is
in progress, strategies are formed and dissolved, no creation of revenue
stream, R&D controlling the major funds, fragmentation in operations etc.
Longer Strategic Horizon
The main goal of PE investment is not ownership, rather the goal is value
growth and development of the company. The company and investors seek
long term sustainability rather than quick gains. Due to this, private equity has
a longer strategic horizon. Generally, PE firms exit the company in five to ten
years after getting good return but such firms can lengthen the time horizon
by reinvesting it and pursuing better results of the company.
Debt Capital Markets Origination
 Debt origination is the process of raising debt in the capital markets for
larger borrowers. Origination includes bridging the gap between the needs
of debt issuers and investors, in addition to assessing the interest rate
environment.
The total process of raising debt includes:
 Marketing – Generating interest and gauging potential demand from
prospective investors through marketing materials
 Origination – Finding enough suitable investors at the borrower’s desired
borrowing rate to fulfill their debt-raising needs
 Syndication – The group of investment banks and investors needed to fill
a debt offering are assembled
 Structuring – If required, using lucrative derivatives, such as interest rate
swaps, to tailor-make the cashflows of the bond raising to meet the specific
needs of both the borrower and investor
 Execution – Finalizing process and working with external lawyers to
ensure the debt capital is properly documented, registered with the
required regulators, and funds received and disbursed.
Equity Capital Markets Origination
 Origination (originating deals) is more
closely aligned with classic investment
banking and is responsible for pitching for
equity issuance. This team will speak to
why it makes sense to issue equity based
on market multiples for valuation, investor
appetite and general strategy.
Represent companies for sale
The Investment Bankers represent a diverse range of
companies including multinational public but also
represent private equity firms and family
businesses. The Investment Bankers play a very important
role, when providing advice in the
a) analysis of the selling company,
b) design of a sales process,
c) preparation of the sale process ,
d) contact with potential buyers,
e) execution of the sale process,
f) audit of the business and negotiation of purchase
agreements and
g) coordination of closing the transaction.
Represent companies for sale
The benefits of working with Investment
Bankers experienced are mainly reflected in
1) maximization of value, terms and conditions of
the transaction,
2) efficiency of time and resources of the company
and its shareholders and
3) greater certainty of closing the transaction.
All this is achieved by designing and executing a
customized process taking into account the
situation of the selling company, the markets in
which it participates, the macroeconomic
environment of the countries where it operates,
among many other factors.
Represent Companies buying
another companies
 The Investment bank 's role in mergers and
acquisitions falls into one of either two
buckets: seller representation or buyer
representation.
 One of the main roles of investment banking
in mergers and acquisitions is to establish
fair value for the companies involved in the
transaction.
 Banks will also source deals by studying the
market themselves and approaching
companies with their own strategic ideas.
Manage a diversified portfolio
 Diversification is a risk management strategy
that creates a mix of various investments
within a portfolio. A diversified portfolio
contains a mix of distinct asset types and
investment vehicles in an attempt to limit
exposure to any single asset or risk.
 The rationale behind this technique is that a
portfolio constructed of different kinds of
assets will, on average, yield higher long-term
returns and lower the risk of any individual
holding or security.
Manage a diversified portfolio (cont…)
Manage a diversified portfolio (cont…)
Fund managers and investors often diversify their investments across asset
classes and determine what percentages of the portfolio to allocate to each.
Each asset class has a different, unique set of risks and opportunities. Classes
can include:
 Stocks: Shares or equity in a publicly traded company
 Bonds: Government and corporate fixed-income debt instruments
 Real estate: Land, buildings, natural resources, agriculture, livestock, and
water and mineral deposits
 Commodities: Basic goods necessary for the production of other
products or services
 Cash and short-term cash-equivalents (CCE): Treasury bills,
certificate of deposit (CD), money market vehicles, and other short-term,
low-risk investments
The theory holds that what may negatively impact one asset class may benefit
another. For example, rising interest rates usually negatively impact bond
prices as yield must increase to make fixed income securities more attractive.
On the other hand, rising interest rates may result in increases in rent for real
estate or increases in prices for commodities.
Making prudent use of firm capital
A prudent investment refers to the recognized use of financial assets
that are suitable for an investor’s goals and objectives. A prudent
investment considers the risk/return profile and the time horizon of
an investor.
Fiduciaries (such as financial advisors, attorneys, CPAs and retirement
plan sponsors), whom an investor entrusts to make prudent
investments, should make certain that a chosen investment makes
sense within their client's overall portfolio and that fees will not
detract significantly from the investment's returns.
 A prudent investment refers to the recognized use of financial
assets that are suitable for an investor’s goals and objectives.
 Good fiduciaries monitor the performance of the investments they
have selected for their clients to make sure they are achieving their
stated goals.
 The Prudent Investor Rule specifies that fiduciaries must make
sound money-management decisions for their clients based on the
information available.
Investment banking in Nepal
In Nepal, the governing regulation {Securities Businessperson (Merchant
Banker) Regulation, 2064} defines Merchant banker as securities
businessperson which has obtained license to perform one or more function
pursuant to Regulation 16.
The Regulation 16 lists the following as the functions of Merchant Banker:
 All the functions related to issue and sales management of securities
including drafting of prospectus, offer documents and other related
documents.
 Underwriting by entering into agreement with body corporate and
undertake to purchase the unsubscribed portion of securities offered by
body corporate.
 provide share registration related services such as maintaining register of
ownership of securities and execute name transfer on behalf of the body
corporate
 Provide portfolio management services to the clients by entering into an
agreement.
Securities Board of Nepal (SEBON) is the regulatory body looking after the
licensing and supervision of Merchant Banking in Nepal.
Investment banking in Nepal (cont…)
 Merchant banks play an important role in economic and
financial development of the country. In the context of Nepal
where lots of financial systems are being slowed down due
to insufficient capital, technical and financial support,
merchant banks encourages them by its versatile services like
project counseling, corporate counseling, portfolio
management, venture capital, issue management, etc.
 Though merchant banking has emerged in developing
countries long before, it has got new dimension only after
issue of finance company act 1989. Thus we are not having a
long history of merchant banking in Nepal. As a result most
of the Nepalese are still unknown about the meaning of
merchant banking, services provided by merchant banks and
difference between commercial banking and merchant
banking. Thus, people are unaware regarding the importance
of merchant banking in the development of Nepalese Capital
Market and overall Nepal.
Investment banking in Nepal (cont…)
 Citizen Investment Trust (CIT) is a pioneer
merchant banker of the country followed by
other finance companies viz. National Finance Co.,
Nepal Share Market, etc. At present, many
financial institutions are involved in different
merchant banking activities. Out of wide range of
various services provided by merchant bankers,
Nepali merchant bankers provide very few of
them like issue management, underwriting,
underwriting syndication, registrar to share etc.
Other merchant banking activities still have to be
developed with the development of merchant
banking in Nepal.
Functions of Merchant Bankers
Issue
Underwriting Mutual fund
Management

Registrar to Corporate
Portfolio
the share advisory
management
(RTS) Services

Qualified
Merger and
institutional
acquisition
buyer
Process of IPO/ Further PO

Company Approval by
Decision Clarification
SEBON

Appointment Review by Issue open and

of Issue SEBON close
Manager

Listing
Allotment
and released in
Filing of NEPSE
Prospectus SEBON
Preparation
Investor education and awareness in Nepal
Investor education focuses on issues relevant to the education
and information needs of individuals who participate, or are
considering participating, in the financial markets. In addition,
investor education can also help investors better assess the
relevance and suitability of investment advice.

Objectives of Investor Education Program

 Enable investors to understand and manage risk
 Expanding outreach of financial services and products
 Participation in financial markets with esteemed confidence
 Reduce investors vulnerability to fraudulent schemes
 Informed financial and retirement planning
 Protecting investors by educating them on their rights
Investor education and awareness in Nepal
(cont…)
SEBON Education
Investor Education has always been a prioritized area of SEBON.
SEBON has been conducting investor awareness programs
throughout the country through the Investor Education and Financial
Literacy Section under the Research Department. Earlier, weekly
investor education programs were conducted in SEBON premises
regularly. But, due to the COVID restrictions, the programs were
conducted in virtual mode. However, SEBON has been continuously
providing the resource persons for different investor awareness
programs conducted by various market participants and is working to
develop a proper framework for financial literacy and investor
awareness programs to increase their effectiveness.
The activities of SEBON related to investor education are not limited
to certain weeks or events. This is a top priority area of SEBON on
continuous basis. Accordingly, SEBON has been publishing various
booklets, brochures, and the literacy documents to continuously
improve financial literacy in the country.
 MUTUAL FUND V/S PORTFOLIO MANAGEMENT SYSTEM

Mutual Funds Portfolio mgmt system (PMS)

 Mutual Funds are investment  PMS are services offered by
funds that pool the money of investment banks to individuals
various investors to collectively who want to invest their money
put it in stocks, bonds, and other in a variety of assets but do not
types of investments. wish to manage the funds
themselves.
 May be of short as well as long term.  They are of long term in nature.

 Less risky  High risk high reward

 Investors can invest at minimum  Minimum investment amount as

of one unit of the scheme prescribed by SEBON
 Nepal Government has benefited  Individual capital gain tax are not
MFs with capital gain tax waiver waived
in their transactions
 Tailored and beneficial for small  Appropriate for active investors
investors willing to make fairly large
investments